The Abbott Government

[Whiskers]

ABC 7:30 Report, 13 November, PM interviewed.

I like Leigh Sales, who unfortunately is at the pointy end of the usual ABC 'loaded' set of questions, as Tony Abbott pointed out tonight.

The PM was very restrained tonight, but has my permission (he'll be so grateful) to unload on the 7:30 Report in future.

That wasn't a loaded question. A loaded question is what each party ask their own member in parliament to make an often biased statement or a point.

A loaded question is a question with a false or questionable presupposition, and it is "loaded" with that presumption.

The question "Have you stopped beating your wife?" is a loaded question that presupposes that you have beaten your wife prior to its asking, as well as that you have a wife. If you are unmarried, or have never beaten your wife, then the question is loaded.​

While in personal relations loaded questions are usually frowned upon as being provocative, not trusting, but for police loaded questions are a basic tool to get to the truth to force people to confirm or deny a point. Similarly for 'constructive' investigative reporters.

We don't need reporters to just be mouth pieces for a political or business lobbyists do we?

Q: Did you know who killed Joe Blow? Likely answer no, but also likely avoid answer. Little useful information gained.

Q: Why did you mutilate her **** is such a disgusting way with you knife after robbing the shop to feed your drug habit? A refusal to answer could lead to a finding of guilt in a court of law and certainly a court of public opinion. A partial answer could implicate him in the crime especially if certain info was not widely known or deliberately 'faked'.

BUT if you knew you were innocent and had a solid alabi, you'd likely disclose it to clear your name AND expose the accuser for making false accusations, ie lying.

The fact that Abbott could not turn the leaded question around to backfire on the questioner is a sign of weakness and or hiding something. He missed a golden opportunity to win in the court of public appeal. His attempt to attack the questioner for doing their job, only further highlights the determination to hide something or insistence to repaint the facts with his bias, but with increasing venom.

As for the PM being restrained, he lost his restraint by attacking the questioner rather than the question.

What do you think when people accuse you of doing what they are guilty of themselves?...or accuse other politicians of doing what they did themselves? just hypocrite? or hum this is aggressive domineering behaviour trying to make you feel responsible and guilty for everything including what they are planning to do.

We depend so much on various media sources for our information. We also trust our financial advisors, accountants, Lawyers, doctors and in some cases, our party officials to tell us the truth. Surely our politicians are on the bottom of the heap of 'trust' and must conform to more scrutiny, even from their own brand followers.

For me, the fundamental test of a sound position or argument is the ability to withstand any scrutiny or questioning with decorum.

That's why people who have nothing to hide and are confident in their position engage in open dialogue, discussion and critique at leisure.

The reason why I don't have a problem with loaded questions from the ABC through to Andrew Bolt, is if your case is so strong and you are up to the challenge you can easily exploit it to prove your point, as above.

 

[Whiskers]

Bugger it. I will go on.

Are you are loosing your cool, dr!

You also haven't figured it out yet, the difference between the 'structural' budget balance and the 'actual' budget balance and the things that contribute to each!

The other significant point is WHEN the structural deficit started. You might deny... but the history books clearly document it started in the middle of the Howard Costello era.

It's a sick and suicidal argument for politicians to accuse others of what you are guilty of yourselves.

 

[drsmith]

Are you are loosing your cool, dr!

You also haven't figured it out yet, the difference between the 'structural' budget balance and the 'actual' budget balance and the things that contribute to each!

The other significant point is WHEN the structural deficit started. You might deny... but the history books clearly document it started in the middle of the Howard Costello era.

It's a sick and suicidal argument for politicians to accuse others of what you are guilty of yourselves.

You don't seem very keen to address the substance of Labor's folly.

Peter Costello was right when he said Labor would waste it. I don't think even he could have imagined the extent to which they have, not only in dollar terms but also in the more than 1,000 lives they have sacrificed in the name of pure political ideology and yet that's the very same subject they're reduced to banging on about in parliament in order to say something. It's a very sad legacy indeed.

Go to bed and reflect on that. It will do you good.

 

[Whiskers]

Go to bed

No! :

You don't seem very keen to address the substance of Labor's folly.

It's all been analysed to death dr. BUT it doesn't change the fact that 'structural' budget balance as opposed to the 'actual' budget balance you are obsessed with for short term political point scoring, was being driven down from Howards term.

Are you calling the Parliamentary Budget Office a liar?

Regardless of who caused it, what you ought to be concerned about is what are the consequences of another Howard style Big L Lib policy government driving our structural budget position down further!

Why do you think they want to extend the debt limit so much instead of exercising prudent policy to reduce government and cut costs, as they claimed their brilliant economic managers record is?

The short answer is their model (Howard and Costello) was in fact a big spending government and that model won't work because of the different structural nature originating from their previous capitalist gouge.

When you really understand the economics, you will understand they are doing what Rupert Murdoch and the likes do... strip the guts out of our business for the big end of town and multinationals before dressing up the prostituted shell as a healthy virgin to sell off to the rest of us.

 

[overhang]

You forgot to mention when Rudd/Labor took over our country was DEBT FREE ! Australia’s net Government debt was $96 billion in June 1996. By June 2007, Australia had net financial assets (negative debt) of $29 billion.

Oh dear

Lets put this into prospective because I think it's often forgotten. The Howard government sold approx $55 billion in public assets to acquire this figure. Now you didn't but its often said that they inherited $96 billion in debt from Labor but $40 billion of that was from the Fraser government. My point is any government can make its books look an economical marvel when you sell off public assets. Don't get me wrong they certainly moved our books in the right direction which undoubtedly helped us get through the GFC better than most countries however it's kind of like paying of the mortgage by selling the car and all furniture. The Abbott government is already at it looking to sell Medibank. http://www.finance.gov.au/property/asset-sales/past-sales.html

In saying all this though Labor must take responsibility for current debt ceiling.

 

[IFocus]

Seriously, the Howard Government welfare handouts had no impact on the budget? Tax free super had no impact on the budget? The terms of trade falling with the resulting drop in GNI has no impact on the budget? Both previous Govts have plenty of responsibility for the current structural deficit of the budget.

So you're saying a 33% increase in the limit is not OK, but a 66% increase is, yet voted for the party that has surplus in it's DNA, would have run surpluses through the GFC, but has yet to announce any decent level of welfare cuts, and doesn't believe it can balance the budget within 3 years.

Haven't they found the budget emergency yet? (lets fix it with another 66% of debt increase)

You forgot this bit everyone ignores

The Gillard/Rudd governments ran an efficient, tight economy. As economist Stephen Koukoulas has noted:

In its budget settings, the Labor government implemented the largest tightening in fiscal policy ever recorded. The budget tightened by 3 per cent of GDP in a couple of years and 2012-13 saw the largest cut in real government spending ever.

But regardless the Coalition arguments are becoming more convoluted as they are still running in opposition rather than government.

It remains to be seen how long they can keep saying one thing and doing the exact opposite before the momentum shifts as the argument its all Labor's fault will die out eventually likely some time next year I would think.

 

[trainspotter]

Lets put this into prospective because I think it's often forgotten. The Howard government sold approx $55 billion in public assets to acquire this figure. Now you didn't but its often said that they inherited $96 billion in debt from Labor but $40 billion of that was from the Fraser government. My point is any government can make its books look an economical marvel when you sell off public assets. Don't get me wrong they certainly moved our books in the right direction which undoubtedly helped us get through the GFC better than most countries however it's kind of like paying of the mortgage by selling the car and all furniture. The Abbott government is already at it looking to sell Medibank. http://www.finance.gov.au/property/asset-sales/past-sales.html

In saying all this though Labor must take responsibility for current debt ceiling.

Well bugger me !

 

[drsmith]

You forgot this bit everyone ignores

In that article I note this particular comment on terms of trade,

It has not been widely reported that over the past two years, the Australian economy confronted a 20-year low for Chinese economic growth. This bad luck (for Australia) obviously dragged the terms of trade lower and the Labor government had to deal with this unfortunate turn of events. In late 2012, it made the prudent decision to let the budget automatic stabilisers to work which of course meant less revenue and a budget deficit, but it kept the economy growing at around a 2.5 per cent pace and as we saw last week, the unemployment rate in September was just 5.6 per cent.

The broader historical context is in the following graph.

http://www.tradingeconomics.com/australia/terms-of-trade

 

[trainspotter]

Haven't they found the budget emergency yet? (lets fix it with another 66% of debt increase)

You forgot this bit everyone ignores

But regardless the Coalition arguments are becoming more convoluted as they are still running in opposition rather than government.

It remains to be seen how long they can keep saying one thing and doing the exact opposite before the momentum shifts as the argument its all Labor's fault will die out eventually likely some time next year I would think.

Funny how these economists come up with these theories. What about this for a theory then?

It was not fiscal stimulus that prevented a technical recession, but a combination of other macroeconomic factors. The evidence can be found in Australia's national accounts.

http://www.abs.gov.au/AUSSTATS/abs@...sues&prodno=5206.0&issue=Jun 2013&num=&view=&

The national accounts show it was not fiscal stimulus that prevented recession in the March 2009 quarter, but net exports, boosted by a massive exchange rate depreciation and strong demand from China for Australia's commodity exports. Thank goodness for all those greedy mining companies up in the Pilbara eh?

The RBA sharply lowered the official interest rate which facilitated the exchange rate depreciation, and scope existed for further interest rate reductions. However increased government borrowing due to a range of fiscal stimulus initiatives obviated this policy option. Pink Batts anyone?

Extra government spending did subsequently add to total spending in the economy, thinking Gillards "building revolution" but this occurred several quarters after the worst of the GFC had past, and put upward pressure on market interest rates and the exchange rate.

In turn, this worsened industry competitiveness and contributed to subsequent job losses, not gains, in sectors like manufacturing and tourism. High Aussie dollar and not many tourists want to come here anymore. Got it?

In other words, fiscal stimulus later weakened the economy by contributing to a strengthening of the exchange rate and generating policy uncertainty about how the historically high budget deficits would be corrected.

Who was at the steering wheel at the time? You figure it out. Just a theory I happen to believe in.

Or is that all a bit Keynesian presumptuous of me?

 

[Whiskers]

What about this for a theory then?

Indeed... just your THEORY!

This is the trouble people (including me as explained earlier under Howard) get into when you don't properly understand the economic numbers... when you trust blind faith in your political advisors.

If you want to avoid us going bankrupt like the US... think carefully before giving the government a blank cheque.

So lets get the facts... and cause and effect, straightened out.

The RBA sharply lowered the official interest rate which facilitated the exchange rate depreciation, and scope existed for further interest rate reductions.

Actually it was the GFC that "facilitated" the RBA to lower interest rates.

It was the GFC that caused the AUD to crash, which caused the RBA to sharply lower interest rates. See the middle chart that clearly shows interest rates following not leading the RBA cash rate.

The national accounts show it was not fiscal stimulus that prevented recession in the March 2009 quarter, but net exports, boosted by a massive exchange rate depreciation and strong demand from China for Australia's commodity exports. Thank goodness for all those greedy mining companies up in the Pilbara eh?

As above, net exports (in $) see top chart, did not offset the other adverse effects of the GFC, collapsing AUD, it just partly compensated for it.

Net exports was not a net "boost" to the economy.

Second, demand (volume) from China fell flat with the GFC and never fully recovered the previous rate of "strong demand" as the bottom chart shows.

Volume growth in Australian exports to China has slowed in recent years (2009 to 2011), to average just 5 per cent per annum, mainly due to a decrease in export volumes of Fuels (from their 2009 peak) and Manufactures. http://www.dfat.gov.au/publications/stats-pubs/australias-exports-to-china-2001-2011.pdf​

 

[sydboy007]

You forgot to mention when Rudd/Labor took over our country was DEBT FREE ! Australia’s net Government debt was $96 billion in June 1996. By June 2007, Australia had net financial assets (negative debt) of $29 billion.

Oh dear

The budget was in STRUCTIURAL deficit

The Howard Govbt took a fleeting increase in revewnue and set up recurrent speding. It was all bound to end in tears.

Rudd continued the fantasy with even further tax cuts.

as has been mentioned, the tax cut from the mining boom now total over $30B a year in foregone revenue.

How is that sensible policy?

If things are so dire, why the lack of action? Surely the over the last 12 months Abbot and Hockey could have come up with a few billion in cuts to be introduced immediately upon taking office.

My prediction, no cuts to welfare for anyone above the 4th income decile in the next budget.

 

[sydboy007]

Actually it was the GFC that "facilitated" the RBA to lower interest rates.

It was the GFC that caused the AUD to crash, which caused the RBA to sharply lower interest rates. See the middle chart that clearly shows interest rates following not leading the RBA cash rate.

Actually it was the GFC that crushed the massive spike in inflation that Howard had caused with his fighting the RBA leading up to the 2007 election.

The fast drop in inflation allowed the RBA to dramatically cut interest rates.

Does a good economic manager see demand pull inflation within the economy and say:

* I will cut Govt spending to help slow demand

* I will increase Govt spending / cut taxes to help increase demand.

Seems like people have forgotten mortgage rates peaked at around 9% under Howard because he couldn't stop handing out the candy.

 

[trainspotter]

Indeed... just your THEORY!

This is the trouble people (including me as explained earlier under Howard) get into when you don't properly understand the economic numbers.. when you trust blind faith in your political advisors.

If you want to avoid us going bankrupt like the US... think carefully before giving the government a blank cheque.

So lets get the facts... and cause and effect, straightened out.

Actually it was the GFC that "facilitated" the RBA to lower interest rates.

It was the GFC that caused the AUD to crash, which caused the RBA to sharply lower interest rates. See the middle chart that clearly shows interest rates following not leading the RBA cash rate.

As above, net exports (in $) see top chart, did not offset the other adverse effects of the GFC, collapsing AUD, it just partly compensated for it.

Net exports was not a net "boost" to the economy.

Second, demand (volume) from China fell flat with the GFC and never fully recovered the previous rate of "strong demand" as the bottom chart shows.

OOOOOOOOOER Whiskers ..... try googling this man .... Tony Makin is a professor of economics at Griffith University, Queensland. I plaigiarised his "theory" and cross referenced it with this site http://www.abs.gov.au/AUSSTATS/abs@...sues&prodno=5206.0&issue=Jun 2013&num=&view=& to ensure his "theory" was factual.

So are you saying a professor of economics does not understand the economic numbers?

Bwahahahahaha *gasp* hahahahaagaaggaaaaaaaaaaaaaa

He also wrote this:-

For instance, the standard textbook model of an open economy with internationalised capital markets and a floating exchange rate proposes that fiscal stimulus fully crowds out net exports, while another perspective originally suggested by classical economist David Ricardo implies higher public debt stemming from increased government borrowing crowds out private consumption.

Higher public debt implies higher future taxes not just for households, but for firms.

Private firms essentially drive the economy, but their share market value languished due to policy induced uncertainty. Slow asset price recovery in the wake of the financial crisis also reflected weak business and consumer confidence stemming from fiscal overkill.

Why Australia, an economy highly dependent on foreign borrowing, deployed fiscal stimulus more aggressively than most other G20 economies remains a mystery.

http://www.politifact.com.au/truth-...sep/01/did-labor-save-us-gfc-part-ii-riposte/

Just a professor of economics BUT what would he know?

P.S. BTW I never said it was "my theory" ... I said it was "a theory" I believed in.

 

[Whiskers]

In that article I note this particular comment on terms of trade,


The broader historical context is in the following graph.

http://www.tradingeconomics.com/australia/terms-of-trade

Not sure what point you are trying to make dr... but the terms of trade chart basically reflects the change of exchange rate (which was largely out of our control) on our competitiveness.

The large dip in the GFC from late 2008 and from late 2011 reflects the structural problems in our economy in terms of government income from taxation and amplified as a result of a particular leaning in monetary policy.

Hence, the government aught to be swapping carbon and mining tax etc cuts against some other revenue source or equivalent spending cuts... not massively increasing the debt limit and continuing a big spending regime to try to out do Labor's handouts.

 

[Whiskers]

Actually it was the GFC that crushed the massive spike in inflation that Howard had caused with his fighting the RBA leading up to the 2007 election.

Seems like people have forgotten mortgage rates peaked at around 9% under Howard because he couldn't stop handing out the candy.

Yes, that too.

P.S. BTW I never said it was "my theory" ... I said it was "a theory" I believed in.

A theory you believe in and put up as an argument with passion is your theory.

 

[trainspotter]

A theory you believe in and put up as an argument with passion is your theory.

I precluded it with this statement "Funny how these economists come up with these theories."

So a professor of economics is incapable of understanding the economic numbers as per your statement?

And that ladies and gentlemen is game, set and match. Thank you linesmen, thank you ballboys. Adieu.

 

[trainspotter]

And just for comedy purposes only:-

As the Reserve Bank notes, "from 2003 to 2011, global prices for Australia’s resource exports (in US dollar terms) increased by more than 300 per cent.

http://www.rba.gov.au/publications/rdp/2011/pdf/rdp2011-08.pdf

You might want to read this to understand economic numbers. Or has the RBA got it wrong as well?

 

[Whiskers]

I precluded it with this statement "Funny how these economists come up with these theories."

So a professor of economics is incapable of understanding the economic numbers as per your statement?

You said:

It was not fiscal stimulus that prevented a technical recession, but a combination of other macroeconomic factors. The evidence can be found in Australia's national accounts.​

He would if you showed them to him... he would see the point that you didn't, that I pointed out factual and historical chronological errors in your comment that are not necessarily obvious in the national accounts, but are as I showed.

And just for comedy purposes only:-

As the Reserve Bank notes, "from 2003 to 2011, global prices for Australia’s resource exports (in US dollar terms) increased by more than 300 per cent.

http://www.rba.gov.au/publications/rdp/2011/pdf/rdp2011-08.pdf

You might want to read this to understand economic numbers. Or has the RBA got it wrong as well?

Yes, BUT they volume 'demand' that you referred to did fall flat with the GFC as I showed... and it's the conversion back to AUD that matters most.

You really are just for comedy purposes, TS! :

That is game, set and match...

 

[trainspotter]

So a professor of economics and the RBA is wrong and Whiskers is right? My bad

 

[Whiskers]

So a professor of economics and the RBA is wrong and Whiskers is right?

No what the prof is on about is arguably right, but what he is talking about and what you were talking about are two different things

My bad

Quite so!