The Abbott Government

[IFocus]

The dust still hasn't settled from the election, calling what is right and what is wrong at this stage is, IMO impossible.

They are making statements and taking actions are you saying everyone is wrong to critique those?

No doubt there are a lot of fiscal and international constraints that the coalition wasn't aware of prior to attaining office.

Nope they have the same information the difference now they are the government and all those lies and fraudulent BS they spouted is....well just that lies and BS.

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.

It will be more like a hurricane by then.

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

Your kidding more like the coalition given all the rorts starting at the top.

 

[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.

I know I am harping on but Mark Kenny who is usually a conservative backer (for some reason he has been reasoning both sides lately) adds fuel to the deceitful behaviour of the new government (Hockey) and its propagandists (Mckibbin).

Swan took Treasury advice not to shore up RBA fund

Wayne Swan considered bolstering the Reserve Bank's reserve fund earlier this year, but was formally instructed by the Treasury Department that shoring up its capital holdings could be counter-productive, Fairfax Media has discovered.

Despite Treasurer Joe Hockey's decision to bolster the RBA to the tune of $8.8 billion this week, an official minute to Mr Swan in April advised the then treasurer not to transfer money from the government to the bank on the grounds there was no legal basis for the request.

The minute advised that the impression created by doing so could undermine confidence in the central bank's stability and compromise its independence from the government.

The advice contradicts any suggestion by the new government that Mr Swan had been negligent in allowing the bank's capital buffer to run down, and had acted against the advice of the RBA itself.

Read more: http://www.smh.com.au/federal-polit...up-rba-fund-20131025-2w7d8.html#ixzz2imOzyCAQ

 

[basilio]

It's possible(arguable) the recent debt crisis with the American government has fuelled concerns about economic risks in Australia. It might be a good idea now to increase the capital base of the RBA

 

[sydboy007]

It's possible(arguable) the recent debt crisis with the American government has fuelled concerns about economic risks in Australia. It might be a good idea now to increase the capital base of the RBA

Surely it should be the RBA making the argument - so far the information being provided seems to indicate the RBA did not believe it was needed, and such a paltry sum would do little in the event of the kind of crisis being used to justify the injection of funds. NAB had to do a deal with the US Fed for $10B during the GFC. No diea what the other Aussie banks did. The small matter of around $350M in interest payments each year has been too easily glossed over by Treasurer Ponzinomics.

 

[Whiskers]

Well the commodity price bubble has burst, if you hadn't noticed.

The boom has peaked, but it was hardly a bubble... and it certainly was not "far bigger than the US housing bubble that led to the financial crisis".

The rest of what you said seems to indicate interest rates should be lower, to increase peoples borrowing ability?

No... well it would, but in the circumstances people were (and still are) not rushing out to borrow... the main effect would be to firstly increase disposable household income, which slows the foreclosure rate, and for the rest helps improve their liquidity, esp by reducing debt and increasing savings.

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

That would be the case if you forecast sharp rise in inflation. BUT what I'm saying and the smarter forecasters say and will continue to be proven right... is the commodity boom was always going to cycle back off it's boom to a more modest levels and the risk of recession is greater than inflation.

Lower interest rates would have helped make the AUD/USD yo yo less extreme. Cutting interest rates sooner and harder would have helped flatten out the extremes of the AUD/USD, which in turn would ease pressure on the RBA cash rate (note their mention of the high exchange rate) and it would be lower atm, thus not being so damaging to business and consumer confidence.

I emphasise confidence rather than temporary gains from cheap imports, because it's confidence that causes people to make long term capital decisions whether in housing, business or mining. It's the lack of confidence about their terms of trade that is halting capital expenditure in a hurry.

The RBA main measure they react to is the CPI. Fuel is a major influence from the rising AUD/USD. Keep the AUD/USD lower and fuel and consequently the CPI would not spike up and there would be no excuse to not lower rates more.

The other concern often raised but never eventuating is over stimulating property prices. In all the circumstances it NEVER was going to happen, despite extra stimulus like the QLD government $10,000 building boost grant scheme... it hardly raised a ripple.

The other factor often mentioned in their reasoning for not lowering more was the AUD/USD... concerns about the US ending QE. But, look what happens when they didn't cut... the $ went higher... and keeping all the reasons they should have cut more in play.

They will have to cut interest rates more to stimulate the economy which has never shown signs of real inflation... ie not induced by other than the exchange rate.

 

[sptrawler]

The boom has peaked, but it was hardly a bubble... and it certainly was not "far bigger than the US housing bubble that led to the financial crisis"..

Who said it was bigger than the US housing bubble?
If it wasn't a bubble why are companies like Atlas Iron, Panoramic rescources, Mincor at the lowest levels they have been since the gfc?

No... well it would, but in the circumstances people were (and still are) not rushing out to borrow... the main effect would be to firstly increase disposable household income, which slows the foreclosure rate, and for the rest helps improve their liquidity, esp by reducing debt and increasing savings. .

Yes, as though that helps, house prices are at all time highs 'again'.
So therefore if you are correct and people aren't rushing out to borrow, it must be investors and overseas purchasers pushing up the prices. Hows does that help Joe average Australian, other than those who own property.lol
I guess you own, or are purchasing a house or houses.

That would be the case if you forecast sharp rise in inflation. BUT what I'm saying and the smarter forecasters say and will continue to be proven right... is the commodity boom was always going to cycle back off it's boom to a more modest levels and the risk of recession is greater than inflation.

Lower interest rates would have helped make the AUD/USD yo yo less extreme. Cutting interest rates sooner and harder would have helped flatten out the extremes of the AUD/USD, which in turn would ease pressure on the RBA cash rate (note their mention of the high exchange rate) and it would be lower atm, thus not being so damaging to business and consumer confidence.

I emphasise confidence rather than temporary gains from cheap imports, because it's confidence that causes people to make long term capital decisions whether in housing, business or mining. It's the lack of confidence about their terms of trade that is halting capital expenditure in a hurry.

The RBA main measure they react to is the CPI. Fuel is a major influence from the rising AUD/USD. Keep the AUD/USD lower and fuel and consequently the CPI would not spike up and there would be no excuse to not lower rates more.

The other concern often raised but never eventuating is over stimulating property prices. In all the circumstances it NEVER was going to happen, despite extra stimulus like the QLD government $10,000 building boost grant scheme... it hardly raised a ripple.

The other factor often mentioned in their reasoning for not lowering more was the AUD/USD... concerns about the US ending QE. But, look what happens when they didn't cut... the $ went higher... and keeping all the reasons they should have cut more in play.

They will have to cut interest rates more to stimulate the economy which has never shown signs of real inflation... ie not induced by other than the exchange rate.

Your hyperventilating, as the Aus $ falls the price of fuel rises, it doesn't fall as you suggest. My bolds
Our fuel price is linked to the Singapore fuel price.
http://www.aip.com.au/pricing/facts/Facts_about_Petrol_Prices_and_the_Australian_Fuel_Market.htm

 

[Garpal Gumnut]

I won't go in to all of the above, but I can tell you I sleep better knowing that Abbott/Hockey are running our finances than Gillard/Swan or Rudd/Bowen.

Adults running a household budget.

It ain't brain science.

And no more brainfarts on the expenditure side.

gg

 

[sptrawler]

I won't go in to all of the above, but I can tell you I sleep better knowing that Abbott/Hockey are running our finances than Gillard/Swan or Rudd/Bowen.

Adults running a household budget.

It ain't brain science.

And no more brainfarts on the expenditure side.

gg

Well said gg, consumer confidence is rising, that is because we are not seeing "days of our lives" government on tv every day.
The general public likes government to govern not be a bloody soap opera.

 

[sydboy007]

I won't go in to all of the above, but I can tell you I sleep better knowing that Abbott/Hockey are running our finances than Gillard/Swan or Rudd/Bowen.

Adults running a household budget.

It ain't brain science.

And no more brainfarts on the expenditure side.

gg

$8.8B to the RBA when they didn't ask for it, didn't need it, but hey what's another $300M+ to the interest bill.

Treasurer Ponzinomics needs some quickeze for that one.

- - - Updated - - -

Well said gg, consumer confidence is rising, that is because we are not seeing "days of our lives" government on tv every day.
The general public likes government to govern not be a bloody soap opera.

Westfarmers has pretty much said they've not seen a material rise in sales, so while people might SAY they're feeling better they're NOT spending more, so the reality is they're not truly behaving any differently now than before the election.

 

[sydboy007]

Yes, as though that helps, house prices are at all time highs 'again'.
So therefore if you are correct and people aren't rushing out to borrow, it must be investors and overseas purchasers pushing up the prices. Hows does that help Joe average Australian, other than those who own property.lol
I guess you own, or are purchasing a house or houses.

Tony "The Crisis" Abbott's summation on rising house prices

"If housing prices go up, sure that makes it harder to get into the market, but it also means that everyone who is in the market has a more valuable asset."

Treasurer Ponzinomics take on the situation

"The fact is, we have a very generous immigration program. And we have very slow supply coming in to the market. Now rising house prices in Australia help to make some of the more marginal new housing developments affordable and realistic and deliverable. And in turn, that increase in supply helps to manage the market. So, Australia is a long way from a bubble…

A lot of Australians put a lot of new capital into their homes – renovate their homes, upgrade their homes – and we have the largest homes on average perhaps in the Western World, and the world more generally. So it’s a very different asset class in Australia than in other jurisdictions”.

With economic leadership like this, it really doesn't matter how many paddles you have on that smelly creek.

ps If you can help to explain how rising prices helps to make new housing developments affordable and realistic and deliverable I'll be very grateful..or maybe

 

[sydboy007]

http://www.smh.com.au/federal-polit...isters-who-prefer-vip-air-20131026-2w8h3.html

Senior figures in the Abbott government were among those who enjoyed ''free'' travel on VIP military aircraft to fly to Canberra for parliamentary sitting weeks, amassing a taxpayer bill of more than $2 million, Defence Department records reveal.

Empty military planes, costing taxpayers thousands of dollars each flight, were sent from Canberra to capital cities to pick up the Howard ministers, despite on many occasions regular commercial flights being available.

Beyond prime ministerial travel - including then acting prime minister Wayne Swan's trip to the 2010 NRL and AFL grand finals - Fairfax Media could not find systemic use of VIP jets by Labor MPs during the Rudd and Gillard governments

 

[Whiskers]

Who said it was bigger than the US housing bubble?

The RBA, or at least McKibbin. This is the piece referred to, again:

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.​

The RBA over estimated 'a commodity price bubble' and well and truly over estimated the fear of inflation.

But was it really over estimated, or just overstated for their political bias objective!

If it wasn't a bubble why are companies like Atlas Iron, Panoramic rescources, Mincor at the lowest levels they have been since the gfc?

It was a premature slowing of mining investment caused by a fall in confidence from concerns about revenue, capital raising and profitability, mainly driven by the $ exchange rate. Other factors like the carbon and mining tax impacted confidence but their impact is mainly felt when making 'super' profit's, with far less impact on development and 'normal' operations.

I would add that part of the reason why the mining tax produced so little revenue in it's first year is because it's likely some development costs were expedited to offset against the 'super' profits... thus making profits more modest and appear that the boom was bust, prematurely.

On the contrary, it has set up many companies for more profitable returns when the tax is abolished.

Yes, as though that helps, house prices are at all time highs 'again'. So therefore if you are correct and people aren't rushing out to borrow, it must be investors and overseas purchasers pushing up the prices.

House prises are not at all time highs everywhere. Where they are back to, or a little above GFC prices, is largely the effect of increased immigration settling around a few capital cities. There is also some tempered organic growth in certain areas due to area specific development, but generally housing prices are far from breaking new highs with any strength Australia wide.

There is an element of overseas investors, as been discussed maybe on another thread. They have been encouraged into 'Land Banking'. For the most part they can afford to take a long term position which has resulted in arguably more land, and future housing being tied up undeveloped or sitting on the market at higher reserves, including foreign owned housing, than the market is prepared to pay, hence the patchy increases in certain areas where the asking price is less.

Hows does that help Joe average Australian, other than those who own property.lol

From what I said:

A more aggressive RBA rate cut would still increase disposable household income, which slows the foreclosure rate, and for the rest helps improve their liquidity, esp by reducing debt and increasing savings.​

A significant reason for firmly high rents and low vacancy rates is a slower rate of new housing construction, including investment housing because of above. Add in a bit higher than normal mortgage defaults and you have more upward pressure on rental demand coupled with decreasing rental vacancies, keeping rents higher.

If the RBA had cut even .5% more when they started cutting we would be in a lot healthier position, with that modest inflation rate more from organic growth than international influences.

I guess you own, or are purchasing a house or houses.

Certainly intending to be more active as the cycle looks closer to bottoming.

Your hyperventilating, as the Aus $ falls the price of fuel rises, it doesn't fall as you suggest. My bolds
Our fuel price is linked to the Singapore fuel price.
http://www.aip.com.au/pricing/facts/Facts_about_Petrol_Prices_and_the_Australian_Fuel_Market.htm

True fuel is linked to Singapore, BUT the bowser price here is affected by the import cost, the exchange rate.

Think about the number of times you have heard the Singapore (or world price) has fallen but the oil companies have not passed the saving on at the bowser.

If the RBA cash rate was .5% lower from the start, that would temper (slow or lessen) the flow of funds in and there for out again, causing the AUD to yo yo less severely and not denting investment confidence so badly. Surely you've herd it often complained that some businesses will jump prices at the smell of a reasonable excuse, but never lower prices if the event never eventuates or reverses. The scrapping of the mining tax is a case in point, where Brisbane City Council is failing to guarantee a reduction in rates equivalent to that attributed to the carbon tax.

The high AUD has heavily slowed our economy down via exchange rate exposed industries such as tourism, manufacturing and education. These are the every day bread and butter industries that support and stabilise our economy. They deserved more support from the RBA than the 'super' profits of our banking industry.

Before anyone jumps on that, think about how little the banks passed on from early cuts and the key RBA players, appointed by the Howard government, Glen Stevens (replaced Ian Macfarlane) and Roger Corbett... two very conservative, even Big L Liberal in philosophy... as in more obsessed with a balanced budget, low or no debt and protecting corporate profits.

If you take a wider look, the RBA (as evidenced by reports) has taken a more conservative bias in it's judgement calls, more favouring the big end of town than the average aussie.

While certainly not endorsing Labors policy on a number of issues, nor a fan of Swan as treasurer, you cannot escape the reality of RBA decisions based on Big L Liberal philosophy contributing to making the economic situation 'appear' worse that it actually is as a smoke screen to avoid passing on better rate cuts for the betterment of the average aussie.

 

[MrBurns]

Interesting reply Whiskers, so things aren't as bad as we are led to believe, I think that's borne out by the confidence in all markets at present.
And the Chinese are back in the property market with a vengeance and this time it's not just new arrivals.

 

[sptrawler]

The RBA, or at least McKibbin. This is the piece referred to, again:

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.​

The RBA over estimated 'a commodity price bubble' and well and truly over estimated the fear of inflation.

But was it really over estimated, or just overstated for their political bias objective!



It was a premature slowing of mining investment caused by a fall in confidence from concerns about revenue, capital raising and profitability, mainly driven by the $ exchange rate. Other factors like the carbon and mining tax impacted confidence but their impact is mainly felt when making 'super' profit's, with far less impact on development and 'normal' operations.

I would add that part of the reason why the mining tax produced so little revenue in it's first year is because it's likely some development costs were expedited to offset against the 'super' profits... thus making profits more modest and appear that the boom was bust, prematurely.

On the contrary, it has set up many companies for more profitable returns when the tax is abolished.



House prises are not at all time highs everywhere. Where they are back to, or a little above GFC prices, is largely the effect of increased immigration settling around a few capital cities. There is also some tempered organic growth in certain areas due to area specific development, but generally housing prices are far from breaking new highs with any strength Australia wide.

There is an element of overseas investors, as been discussed maybe on another thread. They have been encouraged into 'Land Banking'. For the most part they can afford to take a long term position which has resulted in arguably more land, and future housing being tied up undeveloped or sitting on the market at higher reserves, including foreign owned housing, than the market is prepared to pay, hence the patchy increases in certain areas where the asking price is less.



From what I said:

A more aggressive RBA rate cut would still increase disposable household income, which slows the foreclosure rate, and for the rest helps improve their liquidity, esp by reducing debt and increasing savings.​

A significant reason for firmly high rents and low vacancy rates is a slower rate of new housing construction, including investment housing because of above. Add in a bit higher than normal mortgage defaults and you have more upward pressure on rental demand coupled with decreasing rental vacancies, keeping rents higher.

If the RBA had cut even .5% more when they started cutting we would be in a lot healthier position, with that modest inflation rate more from organic growth than international influences.



Certainly intending to be more active as the cycle looks closer to bottoming.



True fuel is linked to Singapore, BUT the bowser price here is affected by the import cost, the exchange rate.

Think about the number of times you have heard the Singapore (or world price) has fallen but the oil companies have not passed the saving on at the bowser.

If the RBA cash rate was .5% lower from the start, that would temper (slow or lessen) the flow of funds in and there for out again, causing the AUD to yo yo less severely and not denting investment confidence so badly. Surely you've herd it often complained that some businesses will jump prices at the smell of a reasonable excuse, but never lower prices if the event never eventuates or reverses. The scrapping of the mining tax is a case in point, where Brisbane City Council is failing to guarantee a reduction in rates equivalent to that attributed to the carbon tax.

The high AUD has heavily slowed our economy down via exchange rate exposed industries such as tourism, manufacturing and education. These are the every day bread and butter industries that support and stabilise our economy. They deserved more support from the RBA than the 'super' profits of our banking industry.

Before anyone jumps on that, think about how little the banks passed on from early cuts and the key RBA players, appointed by the Howard government, Glen Stevens (replaced Ian Macfarlane) and Roger Corbett... two very conservative, even Big L Liberal in philosophy... as in more obsessed with a balanced budget, low or no debt and protecting corporate profits.

If you take a wider look, the RBA (as evidenced by reports) has taken a more conservative bias in it's judgement calls, more favouring the big end of town than the average aussie.

While certainly not endorsing Labors policy on a number of issues, nor a fan of Swan as treasurer, you cannot escape the reality of RBA decisions based on Big L Liberal philosophy contributing to making the economic situation 'appear' worse that it actually is as a smoke screen to avoid passing on better rate cuts for the betterment of the average aussie.

Well Whiskers, if you are right and interest rates drop further, pushing house prices higher. You have to feel for the underclass that will be created.
You make referance to the fact house prices are only booming in major population areas, that has always been the case.
You also make referenceto RBA rate cuts increasing disposable income, that is only for those with a home loan.
You also make reference to RBA rate cuts reducing foreclosures and giving them more liquidity. It would appear to me those people are in financial stress and have no liquidity anyway.
If in some way your reasoning is supposed to indicate we are in a great financial state, I'm missing it.

All your assumptions seem to be based on a bouyant housing market, which by your own admission is being proped up by overseas investors.
Housing is non productive debt, once it is built it does nothing for the economy, to make it a lucrative investment vehicle is a recipe for disaster.IMO

 

[Whiskers]

Well Whiskers, if you are right and interest rates drop further, pushing house prices higher. You have to feel for the underclass that will be created.
You make referance to the fact house prices are only booming in major population areas, that has always been the case.
You also make reference to RBA rate cuts increasing disposable income, that is only for those with a home loan.
You also make reference to RBA rate cuts reducing foreclosures and giving them more liquidity. It would appear to me those people are in financial stress and have no liquidity anyway.
If in some way your reasoning is supposed to indicate we are in a great financial state, I'm missing it.
All your assumptions seem to be based on a bouyant housing market, which by your own admission is being proped up by overseas investors.
Housing is non productive debt, once it is built it does nothing for the economy, to make it a lucrative investment vehicle is a recipe for disaster.IMO

You're missing it.

I'll post up some more charts tomorrow, but for now... house price rises (in some areas) is driven by demand for housing from population growth, as evidenced by high rents and low vacancy rates... rather than low interest rates.

If low interest rates was stimulating housing you would see stronger construction as well as other things.

Hence my argument that interest rate should have been much lower to (among other things) stimulate the building and first home owner sector.

Tomorrows lesson will be on how the RBA is colluding with the top end of town and Big L Libs to squeeze the average aussie for max corporate profits... the 'stuck' (on purpose, as in people reluctant to pay higher prices and rent, or build new homes, tending to stay at home in extensions to existing family homes as Syd mentioned) situation our economy is in atm largely because of the RBA monetary policy.

I'll give you a clue. Think about the Asian Financial Crisis around 1997/8 caused by artificially high interest rates.

 

[sptrawler]

You're missing it.

I'll post up some more charts tomorrow, but for now... house price rises (in some areas) is driven by demand for housing from population growth, as evidenced by high rents and low vacancy rates... rather than low interest rates..

Higher rents can only be driven by higher wages, eventually renters on good stable incomes purchase their own house. This leaves the the landlord with looking for a smaller pool of reliable tenants.

If low interest rates was stimulating housing you would see stronger construction as well as other things..

You are only seeing strong price increases in established inner city areas, which supports the arguement that it is investment driven

Hence my argument that interest rate should have been much lower to (among other things) stimulate the building and first home owner sector. .

I dissagree, if the desired outcome was for first home owners, the tax break to investors would have been reduced.
Instead the laws governing SMSF ownership of residential real estate was relaxed, to further prop up prices.

Tomorrows lesson will be on how the RBA is colluding with the top end of town and Big L Libs to squeeze the average aussie for max corporate profits... the 'stuck' (on purpose, as in people reluctant to pay higher prices and rent, or build new homes, tending to stay at home in extensions to existing family homes as Syd mentioned) situation our economy is in atm largely because of the RBA monetary policy.

I'll give you a clue. Think about the Asian Financial Crisis around 1997/8 caused by artificially high interest rates.

I can't wait, it is great to hear someone with such insight.

 

[Whiskers]

Higher rents can only be driven by higher wages

Wages certainly is not the only thing!

So why is wages growth still quite strong at over 3% but rents, rental yields and property prices generally slower to flat?

The thing that drives prices higher is higher demand, like increasing population (for the product or service), over the available supply... slower rate of building approvals as indicated in chart.

You may also have seen reports that in many areas it has been more economical to rent than buy a property for some time, because of the prevailing economic circumstances, resulting in a lower vacancy rate, but not substantially higher prices.

That says something about the demand side of the equation and monetary policy.

If what you are saying is you are expecting wages growth to improve affordability, I think you will be disappointed by this government.

 

[sptrawler]

Wages certainly is not the only thing!

So why is wages growth still quite strong at over 3% but rents, rental yields and property prices generally slower to flat?

The thing that drives prices higher is higher demand, like increasing population (for the product or service), over the available supply... slower rate of building approvals as indicated in chart.

You may also have seen reports that in many areas it has been more economical to rent than buy a property for some time, because of the prevailing economic circumstances, resulting in a lower vacancy rate, but not substantially higher prices.

That says something about the demand side of the equation and monetary policy.

If what you are saying is you are expecting wages growth to improve affordability, I think you will be disappointed by this government.

I'm not saying anything, just questioning your assumptions and reasoning.

 

[Whiskers]

Tomorrows lesson will be on how the RBA is colluding with the top end of town and Big L Libs to squeeze the average aussie for max corporate profits... the 'stuck' (on purpose, as in people reluctant to pay higher prices and rent, or build new homes, tending to stay at home in extensions to existing family homes as Syd mentioned) situation our economy is in atm largely because of the RBA monetary policy.

I'll give you a clue. Think about the Asian Financial Crisis around 1997/8 caused by artificially high interest rates.

You will recall Labor calling on the RBA to lower rates faster and additionally for the big four banks to pass on more of the cut.

In the Asian financial crisis the key players ( suppliers of most of our imports) were trying to out bid each other for foreign investment. A significant tool they used was higher than normal interest rates.

Have a look at the correlation between the AUD and our RBA rising the cash rate too soon too much in 2009 in relation to all other major economies... it went through the roof. Why? Partly because the AUD is about the no 5 traded currency in the world, but mainly because of foreign investment. Too much of a good thing. It was good for business importing stuff and travelling overseas if you were well heeled after the GFC.

It's interesting to note it flattened out IN 2011 and threatens to fall back with anticipated rate cuts. So why doesn't the RBA cut to lower the $?... while it may cause some 'imported inflation', the RBA can ignore that, as it is not counted in the core inflation numbers, as more of a one off like the introduction to the GST.

The answer is in the Big L Liberal philosophy of the key RBA decision makers and the contradictory to pre election decisions of Abbott & co, to increase debt and government spending... the means to transfer wealth from the masses to the top end of town again.

Next lesion: How do you know when you've been shafted by a politician? Clue!

Gillard: There will be no mining tax under a government I lead.​

 

[Whiskers]

Well I'm pleased to see Shorten isn't a runaway threat to Abbott. Even Rudd would have done better than that!

The Greens have picked up a bit and 'others' presumably PUP are stable. Although just one poll that should be more of a concern for Abbott... the fracturing of the big two appearing to be a new fixture in Aus politics.

TONY Abbott is riding a post-election honeymoon high, with nearly half of voters preferring him as prime minister and support for Labor retreating to levels last seen during the party's June leadership crisis.

In the first Newspoll since the September 7 election, the Prime Minister has recorded his best net satisfaction rating since he took over as Liberal leader in December 2009.

Mr Abbott has also opened a commanding 47 per cent to 28 per cent lead over new Opposition Leader Bill Shorten on the question of who would make the better prime minister, with 25 per cent of voters still uncommitted. He led Kevin Rudd 45 per cent to 43 per cent on the eve of the election. While Mr Abbott has improved his stocks with voters, more than four in 10 have not yet formed a view on whether they are satisfied with Mr Shorten, elected Labor leader just two weeks ago after a month-long contest with Anthony Albanese.

The Newspoll survey, which was conducted exclusively for The Australian at the weekend, reveals Labor's primary vote has slipped to 31 per cent compared with its September 7 election day result of 33.3 per cent. This represents Labor's lowest primary vote survey since the height of the then government's leadership turmoil in June, which ended with Mr Rudd toppling Julia Gillard as prime minister.

After a cautious start, in which Mr Abbott has limited his media appearances and stuck largely to announcing the delivery of key election promises, the Coalition's primary vote has risen to 47 per cent from its 45.6 per cent result on election day.

The latest Newspoll puts the Greens' support on 10 per cent and other minor parties on 12 per cent.
http://www.theaustralian.com.au/nat...dslide-newspoll/story-fn59niix-1226748573374#​