The Abbott Government

[sydboy007]

On these two points at least, I am in agreeance with you Syd. I was very disappointed with the coalition's attitude on house prices and middle class welfare has been a burr under my saddle blanket for the longest time.

Then can people start judging the current Government by their actions, not by some rose tinted belief they are better than Labor?

If Hockey Ponzinomics was hinting at reasonable reform on middle class welfare and taxation, I'd be quite happy and willing to believe we've had a change for the better, but on the current words of wisdom coming from them, it feels like they're hoping for another debt binge similar to 2000-2005 to lift the economy, but the household sector is still too indebted to take on much more. Australian households have barely deleveraged over the last 5 years, and that's with the savings rate back to 10% after being negative for a few years under Howard .

It's going to be VERY hard to fill in the 6% GDP drop of the mining CAPEX cliff over the next 2.5 years, and there's still a decent level of overcapacity in the economy, so why invest when what we have isn't fully utilised? We have an over valued dollar, a central bank that thinks macro prudential policy is toxic, financial repression that is probably causing a bigger lose of income since only 1 in 3 households have a mortgage so the rest of us suffer lower incomes to support the over indebted.

 

[Whiskers]

If the Rudd/ Gillard government including Swan/ Wong had not wasted so much in the past 6 years we would not be in the predicament we now face.

Geez I hope the Coalition have put a stop to the $900 cheques that Labor were sending out up to the election.




http://www.theaustralian.com.au/nat...ffer-for-economy/story-fn59nsif-1226745607274

noco, it would be helpful if you copy the text or do a screen shot so I don't have to subscribe to Ruperts biased paper... ohh hang on... that's probably the idea.

Are you are you a stooge for the Big L top end of town, discretely trying to redistribute the wealth from the masses to the few?

For what it's worth Swan was not a great treasurer... and who's still getting $900 cheques?

 

[wayneL]

Syd, I am going to give them some time, as such I find your picking unreasonable at this stage.

 

[Whiskers]

ALP get in, spend like buggery on useless muck, and near nigh bankrupt the country.

Hang on gg, didn't you study the data charts I posted earlier... or do your own search if you don't believe them.

True, there was some wasteful spending that distracted from some reasonable social welfare reforms, but certainly not bankrupt the country.

The main issue is our wildly fluctuating balance and terms of trade, not so much the amount of spending, which gets back to my (and Palmers) belief that:

1. we need to do more to support a wider variety of manufacturing than just the motor industry and not sell out our manufacturers with poor so called free trade deals.
3. The other is the more restrictive role of our RBA compared to the FED which gives us a hiding when the US goes protectionist. Our RBA should have gone too the limit with rate cuts, (cut more sooner) rather than conservatively.

True, we don't have the clout to dictate to the world, BUT if not for pandering to the corporate interest we should be looking at wider economic reform again such as refurbishing the RBA to better protect us from international currency wars.

Then the Coalition get caned for trying to balance the books.

Australia's budget is like a home budget.

Spend more than you earn and trouble is on the horizon.

Very few households have zero debt. Quite the contrary they borrow for worthwhile purposes from time to time and enjoy less debt or net savings at others.

Again gg, what's the great need to always balance the books a-la Howard?

The data and easy visualisation in the charts from earlier clearly shows the main issue that the wider population will revolt against Abbott over... reduced disposable income.

That's where this is all heading now. A massive redistribution of wealth from the masses to the few in the top end of town.

gg

 

[noco]

noco, it would be helpful if you copy the text or do a screen shot so I don't have to subscribe to Ruperts biased paper... ohh hang on... that's probably the idea.

Are you are you a stooge for the Big L top end of town, discretely trying to redistribute the wealth from the masses to the few?

For what it's worth Swan was not a great treasurer... and who's still getting $900 cheques?

ALARM over the rising Australian dollar has spurred the Abbott government to develop contingency plans for a global shock amid fears the US will fail to settle its damaging political row on economic policy.
Cabinet ministers have set on the strategy after being warned that US authorities could continue their monetary stimulus for longer than first thought, renewing the upward pressure on the Australian currency.

The policies will deepen the budget deficit to $40 billion this year and possibly more after Joe Hockey yesterday poured cash into the Reserve Bank to give it the "ammunition" to deal with any shockwaves.

The Australian can reveal the government initially planned to inject roughly $6bn into the central bank and add more over time but changed this to an immediate $8.8bn payment after briefings on the threats to the global economic outlook.

The changes came after the Treasurer and Reserve Bank governor Glenn Stevens returned from a global summit in Washington DC earlier this month that deepened government concerns about a hit to economic growth.

Start of sidebar. Skip to end of sidebar.
Recommended Coverage Joe should dampen meltdown fears JOE Hockey has returned from Washington deeply worried that continued instability in the US may precipitate a new global crisis. Medibank wants to cut red tape MEDIBANK Private has aggressively lobbied the Commonwealth for a series of health insurance reforms. Environment axings as budget slashed THE Environment Department will cut 150 jobs over the next two months. End of sidebar. Return to start of sidebar.
Tony Abbott acknowledged the pressure on the budget yesterday as he called for "bold" recommendations from a new Commission of Audit aimed at cutting expenses, conceding there would be changes that people did not like.

The Reserve Bank warned last year of the need for "rebuilding capital" and will reveal in its annual report today that its reserve fund stands at $2.5bn compared with $6.9bn before the global financial crisis. Mr Hockey blamed Labor for taking dividends out of the central bank in recent years when it should have been shoring up its reserves, as he acknowledged his move would widen this year's deficit. "Our institutions must be at their absolute strongest to deal with the challenges in the days, the weeks and the months ahead," the Treasurer said.

"And the Coalition government will not allow our institutions to be in any way weakened - we need all the ammunition in the guns for what's before us, and this is part of that equation."

Former treasurer Wayne Swan lashed out at the comments by insisting he would have transferred funds to the Reserve Bank if it had sought the help, suggesting it had not asked for the cash.

Correspondence released in April under Freedom of Information laws showed the Reserve Bank urged the government to let it keep all its earnings, saying the money was needed to build up the reserve fund.

Mr Swan said it was "not unreasonable" to conclude that Mr Hockey was deliberately increasing this year's deficit to make future budget improvements look more dramatic.

Combined with the federal cabinet decision to lift the commonwealth debt limit to $500bn, the payment to the RBA is aimed at building up the capacity to deal with slower growth and a rising currency.

If nominal growth is slower than expected next year, tax revenue will fall short of forecasts and the deficit will deepen further, forcing the government to borrow more and take gross debt to as much as $450bn over time, according to market analysts.

The government's contingency plans are aimed at preparing for continued monetary stimulus in the world's largest economy as the US Federal Reserve delays the "tapering" of its policies to increase money supply.

The meetings in the US earlier this month, where Mr Hockey and Mr Stevens spoke to finance ministers and central bank governors from the Group of 20 nations, confirmed expectations the monetary stimulus would continue longer than previously thought. A rising currency would hurt local exporters, curb economic growth and increase the budget deficit.

The Australian dollar hit US97.6c yesterday, its highest level since May, following the release of a larger than expected increase in inflation in the June quarter. However, in a day of highly volatile trading, it dropped back to US96.4c following a big fall in the Japanese sharemarket.

Mr Hockey said the Australian economy was "growing as it should be" and emphasised the commonwealth's AAA credit rating, but also expressed concern the US would be unable to fix its domestic dispute over economic policy. While the US congress struck a provisional deal on the debt ceiling to ease fears of a default, it is expected to enter another round of brinksmanship next year ahead of the nation's mid-term elections in November.

"The United States has not resolved its structural issues, it has not resolved them," Mr Hockey said. "They've kicked the can along the road closer to the mid-term elections. I don't see a way forward out of that. We are not going to allow Australia to become in any way as vulnerable as the United States or some other jurisdictions may be over the months and years ahead."

Economists backed the move to increase the Reserve Bank's capacity. "It seems fairly routine, but it does give the RBA more firepower if there was an unexpected event - that's one of the reasons the reserve fund exists," said JP Morgan chief economist Stephen Walters.

Mr Walters noted that his US colleagues had pushed back their estimate of the timing of the first "taper" of the US monetary policy until April, meaning the US dollar would be weaker for longer and there would be more support for the Australian dollar. "Parity against the (US dollar) is possible, but is not our base case," he said.

Westpac chief currency strategist Robert Rennie said the injection would give the Reserve Bank the strongest capital position it has had since the 1970s.

"It looks a lot more like a rainy day fund than it has for much of its last two and a bit years," he said.

Coalition and Labor governments have taken huge dividends from the RBA over the past decade, making it harder to build up the reserves.
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BTW. the subscription is only about $11 per month

 

[Julia]

Agree noco, didn't see 730 tonight.

It's worth a look. Professor Warwick McKibbin was a member of the Reserve Bank Board for ten years, including during the GFC. During that time he made clear his poor opinion of the Labor government. As a result, Wayne Swan did not offer him a further term. He is a plainly spoken, rational person whose comments about Mr Swan and the then government on 7.30 this evening are enlightening indeed.

 

[Whiskers]

noco, thanks for doing that... but there is little new for me in there and nothing that changes my view of the economy, what the gov knew from reasonable market analysis and forecasts as opposed to the over exaggeration they didn't need to make in the election campaign, that will haunt them because they will not be able to do the Howard recipe with the same popular response initially.

People will be much better informed now, than then and will revolt at the first sign of widening the disposable personal income gap as soon as they see a viable Labor or PUP alternative.

On the NSW fires the army has apologised for starting the big one a week ago. As a firey Abbott should have been very aware of the risk and jumped up and down to get more done sooner there instead of being the 'rescuer' posing for photo shoots. He should have been a 'good' PM fully on duty ripping it into the army for more action on the day and leave his 'good' citizen escapades for when he's lost government.

Will he offer the people who lost their homes as a result of the army started fire compensation like the compensation for overseas terrorists victims?

 

[IFocus]

I'm asking why Joe Hockey is requesting a 66% in the debt ceiling? IF the Liberals are such great economic managers why would they need this HUGE increase?

They cannot even manage their expense accounts or the excuses what hope the budget emergency?

MP's expense scandal: Don Randall's account of his expenditure differs from Tony Abbott's

Read more: http://www.smh.com.au/federal-polit...ony-abbotts-20131024-2w49b.html#ixzz2ifsta01Q

 

[waza1960]

Careful Whiskers you may become even more critical of the Abbott government than the resident left wingers here.
Imagine that ..

 

[Knobby22]

No mention of Greg Hunt?
I believe he is a laughing stock in Britain right now in all the newspapers for selectively quoting Wikipedia to the BBC. it's not like he hasn't got a huge department that can give him advice. It reminds me Hacker in Yes Minister.
Where's Garpel saying the BBC should be shut down for asking questions the ABC wouldn't dare ask?

I think its a case of "nothing happening here, look away".

On another track , Randall is at long last, finally paying back the money for his Cairns escapade, but now there is another rort, going to Melbourne to watch the footy with his wife on the taxpayers credit card. He smells like Mal Colston to me.

My question is why is Tony Abbott not acting and cleaning up this rorting?

Is there any wonder trust in our politicians is so low and so many people voted for Palmer?

 

[waza1960]

My question is why is Tony Abbott not acting and cleaning up this rorting?

Probably too busy running the country

Although I agree something should be done

 

[Whiskers]

Careful Whiskers you may become even more critical of the Abbott government than the resident left wingers here.
Imagine that ..

Well I'm glad someone sees which part of the fence I sit on.

But, none the less I might become more critical, akin to hell hath no fury like a woman, errr I mean policy supporter, scorned... for delivering up a sausage when I bought into a beef roast.

No mention of Greg Hunt?
I think its a case of "nothing happening here, look away".

I heard that interview and it seems to me that some smart asses are over playing that he mentioned looking up Wikipedia (which I thought was a bit in jest) rather than there is no solid support for climate change being responsible for bushfires.

I'm not surprised and I don't think he's too concerned because it's par for the political course, that it's often easier to shoot the messenger if you don't have a reasonable argument against the message.

My question is why is Tony Abbott not acting and cleaning up this rorting?

While both sides of politics are guilty... this is a golden opportunity for him to practice what he preaches. He made so much noise about waste and endlessly uses the word 'good' as a prefix to just about everything he does, eg good citizen (firey), good PM, good for the country etc.

He has dug himself into quite a potentially devastating popularity hole and needs to do a lot more 'action' in support of the talk pretty soon to dig himself out of it.

Is there any wonder trust in our politicians is so low and so many people voted for Palmer?

I actually had a few laughs, like many others, at PUP and KAP before the election, not taking them too seriously. But, I did take Palmers feud with the LNP and his want to become PM seriously.

I suppose in retrospective psychoanalysis it's not surprising that he got his foray to power in the senate, where he cannot do any harm directly by administrative decisions, but people can get a look at his style and commitment before next election.

PS: The Lib fed directorate has bitten the hook and stirred the minnows into action. Will the political wing act?

On Wednesday, Liberal Party federal director Brian Loughnane called for a parliamentary review of the voting system, saying the rise of the micros ''did not reflect the will of the people''.

Read more: http://www.smh.com.au/federal-polit...enate-havoc-20131024-2w4dv.html#ixzz2ihTVvSfM​

Unfortunately, I think they're damned if the do and damned if they don't because of the hypocritical over exaggerated political campaigning.

 

[Whiskers]

The survey from above post supports my 'psychoanalysis' that Tony is likely as they say... praying to god, but he desperately needs to start rowing pretty hard towards the shore... pretty soon, cos the tide of public opinion is damn hard to turn once you piss them off with deceit.

In this case that the corruptible voting system they exploited for so long to run Australia like a dual party dictatorship is in fact corruptible... ie they got beaten at their own game and like a sore looser are now crying foul.

 

[IFocus]

It's worth a look. Professor Warwick McKibbin was a member of the Reserve Bank Board for ten years, including during the GFC. During that time he made clear his poor opinion of the Labor government. As a result, Wayne Swan did not offer him a further term. He is a plainly spoken, rational person whose comments about Mr Swan and the then government on 7.30 this evening are enlightening indeed.

Crikey talks about the man and other issues worth a read

Former RBA member deepens mystery around THAT $9 billion

McKibbin, an ANU economist, was a serial critic of Labor while it was in office, and strengthened his attacks on the then-government after it declined to renew his RBA term in 2011.

McKibbin’s track record in attacking Labor and on more general economic matters is decidedly patchy. He dismissed the role of Labor’s fiscal stimulus in preventing a recession during the financial crisis as “relatively small” and complained that the government had failed to adopt his own Byzantine version of an emissions trading scheme. In 2011 he warned of a commodity price bubble far bigger than the US housing bubble that led to the financial crisis. In the middle of last year he said the Australian economy was about to boom and that the RBA needed to lift interest rates.

Talking about bias

So, McKibbin appears to confirm that at no stage did the RBA ask Swan to top up its capital reserves, even when the ratio of the reserve fund to assets at risk was at 2.1%, nearly half its current level of 3.8%. What McKibbin also does is gloss over the fact that in 2011-12, the RBA paid no dividend to the government at all, unlike all of the Howard years, when dividends of up to $3 billion were paid to government year in, year out.

As Stephen Koukoulas correctly notes today, if former Liberal treasurer Peter Costello had taken dividends from the RBA at a similar average to Swan ($1.5 billion a year rather than Costello’s average of $3 billion a year), the RBA’s Reserve Fund would be extremely healthy.

Put another way, if Swan had taken dividends from the RBA at the same level as Costello, the Reserve Fund would now be empty.

 

[sydboy007]

Got to wonder why they're borrowing an extra $8.8B and willing to pay $350M a year in interest for it.

What's the point? If the RBA gets into the trouble the Govt is going to step in anyways, and if the RBA is in trouble, I doubt $8.8B is going to be sufficient to help them out.

Will Treasurer Ponzinomics commit to not "raiding" the RBA for any dividends during the current coalition Govt?

 

[sptrawler]

Got to wonder why they're borrowing an extra $8.8B and willing to pay $350M a year in interest for it.

What's the point? If the RBA gets into the trouble the Govt is going to step in anyways, and if the RBA is in trouble, I doubt $8.8B is going to be sufficient to help them out.

Will Treasurer Ponzinomics commit to not "raiding" the RBA for any dividends during the current coalition Govt?

I wonder why the government hasn't employed you already?
You seem to have the answers for the NBN and the fiscal responsibilty of the RBA, appear to be within your scope of abilities.
We just need you to get off night shift and run for parliament.
Bill Shorten could do with young talent, who have all the answers. His last team certainly didn't.

 

[sydboy007]

I wonder why the government hasn't employed you already?
You seem to have the answers for the NBN and the fiscal responsibilty of the RBA, appear to be within your scope of abilities.
We just need you to get off night shift and run for parliament.
Bill Shorten could do with young talent, who have all the answers. His last team certainly didn't.

Sarcasm aside SP, if you disagree with what I say, how about you put a counter argument forward rather than a snide comment?

The Coalition has spent years complaining about waste and mismanagement, and now wants to spend an extra $350M in interest costs. Does it make economic sense to you, because it doesn't to me.

It makes great political sense as they can inflate this years deficit and blame Labor for it, then any decrease next FY the Coalition will crow about it. It also makes great sense as they can do the Howard $3B a year withdrawl to improve their budget result.

i also wonder what happened to the sense of CRISIS the Coalition had pre election. Surely if things were / are as bad as they said they'd have had some policies ready to introduce NOW to cut a few billion off the deficit this year.

Chris Pyne said the Coalition would have run surpluses for the last 5 years, so surely lopping off a few billion from the deficit by June is easy for them?

 

[sptrawler]

Sarcasm aside SP, if you disagree with what I say, how about you put a counter argument forward rather than a snide comment?

The Coalition has spent years complaining about waste and mismanagement, and now wants to spend an extra $350M in interest costs. Does it make economic sense to you, because it doesn't to me.

It makes great political sense as they can inflate this years deficit and blame Labor for it, then any decrease next FY the Coalition will crow about it. It also makes great sense as they can do the Howard $3B a year withdrawl to improve their budget result.

i also wonder what happened to the sense of CRISIS the Coalition had pre election. Surely if things were / are as bad as they said they'd have had some policies ready to introduce NOW to cut a few billion off the deficit this year.

Chris Pyne said the Coalition would have run surpluses for the last 5 years, so surely lopping off a few billion from the deficit by June is easy for them?

The dust still hasn't settled from the election, calling what is right and what is wrong at this stage is, IMO impossible.
No doubt there are a lot of fiscal and international constraints that the coalition wasn't aware of prior to attaining office.
I feel it is a bit like you going for a promotion, to a position that they sacked someone from, as it is in chaos.
Then four weeks later, you are questioned as to why you are implementing change.
I'm prepared to give them 6 to 12 months and then judge their performance, to start making judgement after 4 weeks is immature. Just my opinion.
I will jump in when I have seen some runs on the board, at the moment it appears to be people passing wind.

By the way I wasn't being sarcastic, Labor needs young people who do have a selfless approach.

 

[Whiskers]

Crikey talks about the man and other issues worth a read

Former RBA member deepens mystery around THAT $9 billion

Talking about bias

I distinctly remember this bit:

In 2011 he warned of a commodity price bubble far bigger than the US housing bubble that led to the financial crisis. In the middle of last year he said the Australian economy was about to boom and that the RBA needed to lift interest rates.​

That's a lot of the reason they held the cash rate too high for too long, and stifled household savings and exaggerated the yo yo currency fluctuations damaging confidence, that I've been complaining about.

Now you won't hear the economists on tv and main media agreeing, because they are largely employed by the top end of town that the RBA was more concerned with looking after to protect their profit margins, as opposed to lowering rates further to spread the wealth.

It's also conceivable that housing construction, first home owners and some mining development was cut short because of their error of judgement and overly conservative rate cuts.

It's seems that 'good' ole Tony has not said a word to his defence staff about the dangers of live fire exercises. Another fire at Tin Can Bay in Qld caused by live fire. http://www.brisbanetimes.com.au/que...rts-queensland-grass-fire-20131025-2w6z5.html

I just find it amazing that as a 'good' firey Abbott has apparently said and done nothing, and likewise as a 'good' PM, has not seen the extra unnecessary cost to the economy... but I suppose as someone else has said, cynically, Labor is copping the blame for this financial year so who cares.

 

[sptrawler]

I distinctly remember this bit:

In 2011 he warned of a commodity price bubble far bigger than the US housing bubble that led to the financial crisis. In the middle of last year he said the Australian economy was about to boom and that the RBA needed to lift interest rates.​

That's a lot of the reason they held the cash rate too high for too long, and stifled household savings and exaggerated the yo yo currency fluctuations damaging confidence, that I've been complaining about.

Now you won't hear the economists on tv and main media agreeing, because they are largely employed by the top end of town that the RBA was more concerned with looking after to protect their profit margins, as opposed to lowering rates further to spread the wealth.

It's also conceivable that housing construction, first home owners and some mining development was cut short because of their error of judgement and overly conservative rate cuts.

It's seems that 'good' ole Tony has not said a word to his defence staff about the dangers of live fire exercises. Another fire at Tin Can Bay in Qld caused by live fire. http://www.brisbanetimes.com.au/que...rts-queensland-grass-fire-20131025-2w6z5.html

I just find it amazing that as a 'good' firey Abbott has apparently said and done nothing, and likewise as a 'good' PM, has not seen the extra unnecessary cost to the economy... but I suppose as someone else has said, cynically, Labor is copping the blame for this financial year so who cares.

Well the commodity price bubble has burst, if you hadn't noticed.
The rest of what you said seems to indicate interest rates should be lower, to increase peoples borrowing ability?

I see interest rates being low as a massive trap, that when sprung, will redistribute wealth from the poor to the wealthy.