Australian (ASX) Stock Market Forum

The Abbott Government

Jump to new
sydboy007 said:
If you have $10B in debt and $10B in assets (that generate a higher rate of income than the debt servicing costs) is it smart to sell the assets to pay off the debt? .
Click to expand...

Show me where the income stream was greater than the interest component?

Without Howard/Costello dumbing down the debt how well do you think we would have gone through the GFC? This is what would have happened :fan We had AAA rating under Costello ..... remember?

PETER Costello, the treasurer who restored Australia's AAA rating with Moody's and Standard & Poor's in 2003, says that if the budget deficit and debt "journey" continues as it has for the past five years, Australia will be at risk of being downgraded again. The former Coalition treasurer said yesterday Australia had lost its AAA credit rating under Paul Keating and it had taken a long time to restore.

Kevin Rudd has used Australia's AAA credit rating as a defence against criticism of the budget deficit blowout to $30 billion last Friday and the breaching of the $300bn debt level.

Announcing the September 7 election on Sunday, the Prime Minister deflected questions about the drastic reshaping of the May budget forecasts on rising debt, deficit and unemployment by asking: "If there is a debt and deficit crisis requiring an immediate return to surplus, why did the credit rating agencies provide us with an AAA credit rating?
Click to expand...

http://www.theaustralian.com.au/nat...-peter-costello/story-fn9qr68y-1226691697171#

john howard.jpg
 
trainspotter said:
Show me where the income stream was greater than the interest component?

Without Howard/Costello dumbing down the debt how well do you think we would have gone through the GFC? This is what would have happened :fan We had AAA rating under Costello ..... remember?
Click to expand...

I fully agree with you that Howard and Costello did there best with dumbing down the understanding of Government debt. Debt is not bad if it is used to invest in something that produces a rate of return higher than the cost of the debt. I would also argue that debt is a fairer way to share the cost of infrastructure than tolls, as a Govt can built the infrastructure with the goal to repay the debt over the economic life if the asset, whereas the public sector is looking for 15%+ annual returns on their investment, along with very restrictive terms eg only 1 public bus route allowed to Sydney Airport and most toll roads have restrictions on improved public transport competition (at least in NSW)

We have to remember a 1/3 of the debt that Howard received from the Hawke / Keating Govt was actually from the previous Fraser / Howard Govt.

The assets sold by Howard can be viewed at http://www.finance.gov.au/property/asset-sales/past-sales.html (it does include some by the previous Labor Govt as well)

Considering the money being made by Telstra and Syd Airport alone, along with the other airport leases sold, I'm pretty confident in saying a lot of the assets were at least breaking even, and probably cash flow positive.

http://www.marketeconomics.com.au/2095-more-facts-behind-the-howard-governments-debt-elimination

The $96 billion “Labor debt” inherited by the Howard Government in 1996 comprised $39.9 billion of Fraser Government debt that carried through the Hawke/Keating period meaning that the true level of Labor debt in 1996 was $56 billion. To pay that $56 billion off, the Howard Government sold almost $72 billion of Government assets meaning the move to negative net debt was not really due to any miraculous and bold fiscal settings, but owed everything to a series of asset sales.

We have some of the highest Telecommunications charges in the world, and Syd airport is known globally for the price gouging it engages in, and a Liberal State Govt bequeathed us one of the most expensive Airport rail lines based on KM charging IN THE WORLD!

Howard was no economic miracle worker. He just presided over a massive consumer debt binge along with a once in a century terms of trade boom and flogged off just about every commonwealth asset he could, while saddling the budget with unsustainable tax cuts and middle class welfare increases.

Tony keeps saying he wants a return to the golden years of Howard, yet I doubt the household sector can really take on much more debt. Too many households out there are living pay packet to pay packet. I'm rather happy the household sector has returned to a more prudent lifestyle. The negative savings rate of the Howard years was unsustainable. The adjustment back to spending growth inline with income growth is going to be painful, and Tony / Hockey are not going to have fun trying to balance a budget where the private sector is still in savings mode.
 
sydboy007 said:
I fully agree with you that Howard and Costello did there best with dumbing down the understanding of Government debt. Debt is not bad if it is used to invest in something that produces a rate of return higher than the cost of the debt. I would also argue that debt is a fairer way to share the cost of infrastructure than tolls, as a Govt can built the infrastructure with the goal to repay the debt over the economic life if the asset, whereas the public sector is looking for 15%+ annual returns on their investment, along with very restrictive terms eg only 1 public bus route allowed to Sydney Airport and most toll roads have restrictions on improved public transport competition (at least in NSW)
Click to expand...

Ummmmm you might want to do a bit more homework on the subject matter at hand. I concur that debt is good if the income derived from the asset is enough to cover the outgoings/interest/amortisation BUT if it does not then it is time for the asset to be sold to cover the debt. Still waiting on proof rather than assumptions.

The Federal government goal is to no longer in the business of owning public assets. This is for private enterprise who are expecting 15%+ return on their assets.

The public sector refers to the part of the economy concerned with providing basic government services BTW. Police, education, military, healthcare for the poor etc. ;)

This has been done to death. The thread is about Abbott and his government and as far as I can see we have another 990 days before an election. Good night :cool:
 
Another back flip, they are now talking about toning down the parental leave promise.:rolleyes:

Looks like all the lefties may get what they wanted.:xyxthumbs
 
sptrawler said:
Another back flip, they are now talking about toning down the parental leave promise.:rolleyes:

Looks like all the lefties may get what they wanted.:xyxthumbs
Click to expand...

Glad to know the right were such strong supporters of Abbotts PPL.

Probably after the Graincorp cave in to the nationals Tony had to give something to the economic Liberals in the party.

Shame they're going to water down the FOFA legislation.

How is not requiring a Financial Advisor to tell their long term clients how much they're being charged for services in the best interests of the client?

How is continuing to allow conflicted advised to clients good for them? GREAT outcome for the industry though.

How is not being required to acting in the clients' best interests good for clients?

Seems the main thrust of the legislation has been removed. Not sure if there's anything worthwhile left in it.

This Govt will have to take a measure of responsibility for the next version of Storm Financial after making these changes.

Seems all that the Government is worried bout is the costs to the industry, not the general public who need better protections.

http://www.smh.com.au/business/cons...future-20131219-2znxq.html?rand=1387485621027

...stats compiled by Rice Warner Actuaries this year, commissioned by Industry Super Australia, which estimated that the FOFA reforms would boost Australians' private savings under advice by $144 billion by 2027 and that the average cost of advice would fall from $2046 before the reforms to $1163 after the reforms by 2027.

Another victory to the rentier class!
 
sydboy007 said:
Glad to know the right were such strong supporters of Abbotts PPL.

Probably after the Graincorp cave in to the nationals Tony had to give something to the economic Liberals in the party.

Shame they're going to water down the FOFA legislation.

How is not requiring a Financial Advisor to tell their long term clients how much they're being charged for services in the best interests of the client?

How is continuing to allow conflicted advised to clients good for them? GREAT outcome for the industry though.

How is not being required to acting in the clients' best interests good for clients?

Seems the main thrust of the legislation has been removed. Not sure if there's anything worthwhile left in it.

This Govt will have to take a measure of responsibility for the next version of Storm Financial after making these changes.

Seems all that the Government is worried bout is the costs to the industry, not the general public who need better protections.

http://www.smh.com.au/business/cons...future-20131219-2znxq.html?rand=1387485621027

...stats compiled by Rice Warner Actuaries this year, commissioned by Industry Super Australia, which estimated that the FOFA reforms would boost Australians' private savings under advice by $144 billion by 2027 and that the average cost of advice would fall from $2046 before the reforms to $1163 after the reforms by 2027.

Another victory to the rentier class!
Click to expand...

Firing from the hip again Syd?
Dr Smith and several Abbott supporters, said they hoped Abbott would water down the PPL and it looks like they will.
Labor/union backed industry super funds, were pushing hard to demonise retail funds. I do agree reform is needed but some form of logical middle ground is required.
I don't use industry or retail funds so really don't have a vested interest either way.
I'll wait untill changes are made, before making a decision one way or the other.
 
sydboy007 said:
Glad to know the right were such strong supporters of Abbotts PPL.
Click to expand...

I don't know anyone from the right in my circle of friends that supports PPL. I'm centrist and I hate it; I'd like to see it gone altogether.

AFAIC it's bad policy.
 
sptrawler said:
Firing from the hip again Syd?
Dr Smith and several Abbott supporters, said they hoped Abbott would water down the PPL and it looks like they will.
Labor/union backed industry super funds, were pushing hard to demonise retail funds. I do agree reform is needed but some form of logical middle ground is required.
I don't use industry or retail funds so really don't have a vested interest either way.
I'll wait untill changes are made, before making a decision one way or the other.
Click to expand...

Sorry, I forgot to put my /sarcasm tag on

Would you want to go to a doctor that had the pharmaceutical industrys' best interests at the fore rather than yours?

Maybe I'm quite upset because when I was younger and more trusting I got rolled by shoddy financial "advice". The damage went on for over 5 years. I'm probably 10 years behind where I should be with the money I lost and the opportunity cost.

Do you think the roll backs that the Abbott Govt is proposing are a "logical middle ground"?

Do you agree that conflicted advise is acceptable? Do you support financial advisors being able to hide some of the commissions they're receiving?

As for demonising retail funds, considering the fee gouging many of them have engaged in the last 10+ years, they totally deserve it. Over $20B a year in fees and counting just for the super industry alone. Too many ticket clippers and not enough service providers.

wayneL said:
I don't know anyone from the right in my circle of friends that supports PPL. I'm centrist and I hate it; I'd like to see it gone altogether.

AFAIC it's bad policy.
Click to expand...

Besides Tony and the Greens who really did support the PPL policy? Definitely none of my centre right or left friends supported it, even a couple who are planning to have their second child were happier with Labors' parental leave policy.
 
sydboy007 said:
Sorry, I forgot to put my /sarcasm tag on


Maybe I'm quite upset because when I was younger and more trusting I got rolled by shoddy financial "advice". The damage went on for over 5 years. I'm probably 10 years behind where I should be with the money I lost and the opportunity cost.

.
Click to expand...

We have all been there, I saw a financial advisor immediately after the 87 crash, I was in my early 30's.
He recommended units in insurance bonds.
Well to cut a long story short, after two years of going nowhere, cashed them in and bought Westpac at $2.50 and ANZ at $3.00, then Woolies at $2.40 when they were spun out of Adelaide Steamships.
Never looked back, since then do it all myself.
The problem with industry funds the governance IMO is suspect, the problem with retail funds is fees.
The answer isn't to crush the retail model, but find a middle ground.
One thing for sure the industry funds will have just as many underlying problems.IMO
 
sptrawler said:
We have all been there, I saw a financial advisor immediately after the 87 crash, I was in my early 30's.
He recommended units in insurance bonds.
Well to cut a long story short, after two years of going nowhere, cashed them in and bought Westpac at $2.50 and ANZ at $3.00, then Woolies at $2.40 when they were spun out of Adelaide Steamships.
Never looked back, since then do it all myself.
The problem with industry funds the governance IMO is suspect, the problem with retail funds is fees.
The answer isn't to crush the retail model, but find a middle ground.
One thing for sure the industry funds will have just as many underlying problems.IMO
Click to expand...

You've avoided defining what you see a logical middle ground.

If you are going to "trust" a financial advisor then there has to be a legislated requirement that the advisor has the clients best interests at the fore. Currently it doesn't seem to be in many cases.

Labor has tried to make that a requirement. The current Govt seems to not think it's necessary. Do you agree with the current Government that conflicted advice is OK? If not, then the changes they are considering should worry you.

Waiting for the legislation to come out will probably mean it's too late to change it, considering how much effort the FIRE sector has put into watering down the FOFA already. What Abbott is proposing is like winning Oz Lotto every week of the year for the FIRE sector.

You believe the Industry funds have suspect Governance, yet isn't the high fees paid via the retail funds also an aspect of Governance that has been used to funnel billions of dollars into the big banks and likes of AMP and Macquarie? Just look at the issues that are coming to light from the Comm Bank allowing their advisors to run riot. Corruption and greed is not a "union" only problem. I'd argue retail superfund trustees face more conflicts with their "masters" interests and fund members than the industry funds do.

At least for most of the last 20 years the industry funds have outperformed the retail sector, mainly due to the lower fees. It's been a great outcome for those in the industry funds, not so great for the profits of the retail sector.
 
sydboy007 said:
You've avoided defining what you see a logical middle ground.

If you are going to "trust" a financial advisor then there has to be a legislated requirement that the advisor has the clients best interests at the fore. Currently it doesn't seem to be in many cases.

Labor has tried to make that a requirement. The current Govt seems to not think it's necessary. Do you agree with the current Government that conflicted advice is OK? If not, then the changes they are considering should worry you.

Waiting for the legislation to come out will probably mean it's too late to change it, considering how much effort the FIRE sector has put into watering down the FOFA already. What Abbott is proposing is like winning Oz Lotto every week of the year for the FIRE sector.

You believe the Industry funds have suspect Governance, yet isn't the high fees paid via the retail funds also an aspect of Governance that has been used to funnel billions of dollars into the big banks and likes of AMP and Macquarie? Just look at the issues that are coming to light from the Comm Bank allowing their advisors to run riot. Corruption and greed is not a "union" only problem. I'd argue retail superfund trustees face more conflicts with their "masters" interests and fund members than the industry funds do.

At least for most of the last 20 years the industry funds have outperformed the retail sector, mainly due to the lower fees. It's been a great outcome for those in the industry funds, not so great for the profits of the retail sector.
Click to expand...

So you think the industry funds don't funnel funds into the Banks Master Funds? Also, you think there isn't any union 'scratch my back' board appointments?

I'm avoiding defining the logical middle ground, because I'm old enough to know, that I don't have the answers.

That's why I run my own investments and SMSF, also why I tend to take advice from older people.
They've seen more than me and lived through more 'once in a lifetime meltdowns', than I have.

Sounds like you should put your money in an industry fund.

I personaly don't give a rats what the outcome is.
 
sails said:
It's crazy. It won't appease the left and will upset conservative supporters. It's a lose:lose, IMO.
Click to expand...

Isn't she married to a Liberal now? Let's face it, most of them, they are the political class. They mix in their own circles.
 
How in God's name did Tony Abbott get away with appointing Natasha Scott-Despoya as Ambassador for Women and Girls ?

She's intelligent, articulate and has been an excellent role model for women since joining Federal parliament as a 26year old. The appointment is far too astute and makes far too much sense to be seen as Tony's work doesn't it ?

Or maybe he has more than one side ? :)
 
The government, and the Health Minister in particular, has some explaining to to do.

Using the festive season to foist one scarey health announcement after another on already stretched consumers.
  • approves private health premiums up +6%, announced just two days before Christmas
  • leaks a 6 month delay of considering the unwinding of the means test on premiums rebate
  • today leaks the possible intention to charge $5 per visit under Medicare
The holiday season timing is mean spirited, bordering on politically cowardly.

PM Abbott, your government needs to be better than this.
 
Logique said:
The government, and the Health Minister in particular, has some explaining to to do.

Using the festive season to foist one scarey health announcement after another on already stretched consumers.
  • approves private health premiums up +6%, announced just two days before Christmas
  • leaks a 6 month delay of considering the unwinding of the means test on premiums rebate
  • today leaks the possible intention to charge $5 per visit under Medicare
The holiday season timing is mean spirited, bordering on politically cowardly.

PM Abbott, your government needs to be better than this.
Click to expand...

Aside from the timing, do you disagree with these proposals?

If people are going to stay in private health care anyway, then it doesn't really make sense for the government to rebate them.
 
Mainly about the timing, but I think $5 per Medicare consultation is politically idiotic, and administerable only with difficulty/extra cost on medical centres.

Initial imposition of the means test was Labor's doing. As predicted, it has led to people bailing out of private insurance, raising the price for those that remained, and has placed even more pressure on an already groaning public system.

As with the the asylum seeker policy, it was ideology before practicality for Labor.

The public system is swamped. This is not a situation in which to place more pressure on private health.

Public + Private makes the health package, not that Labor seems to comprehend it.
 
Top