The Gillard Government

[McLovin]

The Libs are positioning themselves as the Austerity Party at a time when other economies, who have had this approach to financial prudence imposed on them, are struggling badly. Loose monetary policy and deficit spending is now being seen by many as the panacea to avoid the dreaded R word.

If the Australian economy goes into recession in 2014/15 it will be interesting to see if the Libs stick to the less government, lower spending mantra they expect to sustain their popularity. Slash and burn politics is not what kept Howard in office, it was reckless generosity trying to out promise Labor with pre-election largess. I suspect that Abbott and Co will sow the seeds for their demise if they adopt the austerity line in response to recessionary pressure.

I think austerity would be the completely wrong path to take. I'm not even against the current deficit, it's par for the course. What concerns me is the structural changes especially around the demographics of Australia and how that can funded long term. Abbott removing things like the increase in super are long term nothing short of idiotic. Gillard reducing university funding to pay for Gonski, again, idiotic.

Politicians may work on 3 year cycles but countries work on 20-25 year cycles.

 

[FlyingFox]

I think austerity would be the completely wrong path to take. I'm not even against the current deficit, it's par for the course. What concerns me is the structural changes especially around the demographics of Australia and how that can funded long term. Abbott removing things like the increase in super are long term nothing short of idiotic. Gillard reducing university funding to pay for Gonski, again, idiotic.

Politicians may work on 3 year cycles but countries work on 20-25 year cycles.

+1. Personally I think complete austerity maybe the wrong path. However the decisions about how current and future liabilities will be funded in light of the structural changes not only to the demographics but also to government revenue sources and economical "pillars" need to be made sooner rather than later.

As of yet, neither party has really addressed much of this. I am all for spending more for tangible outcomes. Build infrastructure, develop new niche industries, make education better but we can also pay for these by reducing upper/middle class welfare.

 

[sails]

The Libs are positioning themselves as the Austerity Party at a time when other economies, who have had this approach to financial prudence imposed on them, are struggling badly. Loose monetary policy and deficit spending is now being seen by many as the panacea to avoid the dreaded R word.

If the Australian economy goes into recession in 2014/15 it will be interesting to see if the Libs stick to the less government, lower spending mantra they expect to sustain their popularity. Slash and burn politics is not what kept Howard in office, it was reckless generosity trying to out promise Labor with pre-election largess. I suspect that Abbott and Co will sow the seeds for their demise if they adopt the austerity line in response to recessionary pressure.

If only labor had not created such a massive debt (six budget deficits is heavy going) - then there would be no need for austerity. Labor have sown the seeds of their own demise.

Most Aussies will put the blame where it clearly belongs. We all know who ran up the debt and who couldn't balance their budgets. And it's not Abbott!!!

 

[Some Dude]

If only labor had not created such a massive debt (six budget deficits is heavy going) - then there would be no need for austerity. Labor have sown the seeds of their own demise.

Most Aussies will put the blame where it clearly belongs. We all know who ran up the debt and who couldn't balance their budgets. And it's not Abbott!!!

So how does that "massive" debt to GDP ratio compare to other economies that have weathered the GFC? Will we need mega-massive or some other adjectives?

 

[sptrawler]

So how does that "massive" debt to GDP ratio compare to other economies that have weathered the GFC? Will we need mega-massive or some other adjectives?

Yes we were lucky we were a small target for the CDO's.
If we had bought into the toxic debt parcels like the U.K and Europe did, we would be in the same boat as Spain.
It wasn't clever handling by the government, it was monkey see, monkey do. IMO

 

[sydboy007]

Yes we were lucky we were a small target for the CDO's.
If we had bought into the toxic debt parcels like the U.K and Europe did, we would be in the same boat as Spain.
It wasn't clever handling by the government, it was monkey see, monkey do. IMO

Actually it was to a degree the Govt because we had probably one of the toughest macroprudential regimes in the world for our banks via APRA. So we can thank Johnny for creating them, and thank Labor for letting them continue to do pretty good work.

At least we didn't decide to let the fox create the rules for running the chicken house which is what the USA / Europe / UK did.

 

[sptrawler]

Actually it was to a degree the Govt because we had probably one of the toughest macroprudential regimes in the world for our banks via APRA. So we can thank Johnny for creating them, and thank Labor for letting them continue to do pretty good work.

At least we didn't decide to let the fox create the rules for running the chicken house which is what the USA / Europe / UK did.

Very true, the 4 pillars policy and the experience from the 1987 crash and subsequent changes, stood us in good stead.
It will be more appreciated, if we decend into recession, which seems ever more likely.
The strengh of the banks, will be the only thing between a housing deflation and a housing collapse.IMO

 

[sydboy007]

I think a question that never gets asked is what the economy would have been like if say Govt debt was around half the current levels.

Economic growth would certainly have been a lot lower, while I'd not be surprised if the unemployment rate was around 1% higher.

I do reckon the deficits could have been smaller with a bit of cutting to some wasteful middle class welfare, but I'm not sure how much smaller the level of debt could be before the "cost" of that reduction starts to outweigh the lower debt levels.

I do feel we're a nation of whingers taking the gold medal from the Brits.

We have after the biggest collapse in the global economy since the great depression:

* low inflation
* historically low interest rates - remember Howard says they are due solely to Govt actions
* pretty close to full employment
* growth at trend

Maybe the current debt is part of the cost of not having hundreds of thousands out of work with a housing price crash destroying the rest of the economy.

I am amazed at the belief that a Liberal Govt would have done much better. Yeah, debt levels might be lower, but I'm fairly certain unemployment would be higher, and the GDP of the country a fair bit lower due to lower economic growth.

 

[Some Dude]

I am amazed at the belief that a Liberal Govt would have done much better. Yeah, debt levels might be lower, but I'm fairly certain unemployment would be higher, and the GDP of the country a fair bit lower due to lower economic growth.

It's the perfect lie because it's unfalsiable. Remember words to the effect that interest rates will always be lower under the coalition? Unsupportable, unprovable, yet appeals to people's prejudices or negative experiences even though the Australian record holder for official interest rates was the very person as treasurer making that political point.

 

[sptrawler]

It's the perfect lie because it's unfalsiable. Remember words to the effect that interest rates will always be lower under the coalition? Unsupportable, unprovable, yet appeals to people's prejudices or negative experiences even though the Australian record holder for official interest rates was the very person as treasurer making that political point.

Yes a bit like Swan saying it is because of our policies, the RBA can take interest rates so low.lol
Does that mean if they go down to 1%, he takes credit for it. lol
What a bunch of goons.

Also as you rightly suggest, the highest interest rates were when the coalition had to sort out that Labor mess.

 

[Some Dude]

Yes a bit like Swan saying it is because of our policies, the RBA can take interest rates so low.lol
Does that mean if they go down to 1%, he takes credit for it. lol
What a bunch of goons.

True.

Also as you rightly suggest, the highest interest rates were when the coalition had to sort out that Labor mess.

You should run for politics!! April 1982 is hardly Labor's mess.

 

[sptrawler]

True.



You should run for politics!! April 1982 is hardly Labor's mess.

I did my apprenticeship through the Whitlam years(it was great, my wages went fro $17/wk to over$100/wk in no time).
Then we paid the price for it, paying a house off at 18% interest wasn't fun.lol
By the way did you work through that period?

 

[wayneL]

It's the perfect lie because it's unfalsiable.

If it's unfalsifiable , how do you know it's a lie?

(though I do agree it's a nonsense)

Remember words to the effect that interest rates will always be lower under the coalition? Unsupportable, unprovable, yet appeals to people's prejudices or negative experiences even though the Australian record holder for official interest rates was the very person as treasurer making that political point.

Remember that both sides of politics indulge in such.

You pompously implied right wing bias earlier, while your left wing bias is proudly displayed with bells on.

Part of mitigating bias is understanding that everyone has biases, including oneself. A project for your self implied intellect.

 

[Some Dude]

I did my apprenticeship through the Whitlam years(it was great, my wages went fro $17/wk to over$100/wk in no time).
Then we paid the price for it, paying a house off at 18% interest wasn't fun.lol
By the way did you work through that period?

Certainly did. I grew up on farms.

 

[sptrawler]

Maybe the current debt is part of the cost of not having hundreds of thousands out of work with a housing price crash destroying the rest of the economy.

I am amazed at the belief that a Liberal Govt would have done much better. Yeah, debt levels might be lower, but I'm fairly certain unemployment would be higher, and the GDP of the country a fair bit lower due to lower economic growth.

Maybe we would be in a better place than we are at the moment. I don't think artificially propping up property prices has been a winner.
Also I don't think they've done anything that has improved employment figures.
The stimulus package was given at a time the economy was ramping up anyway(let's not forget they introduced 457 at the same time, because of lack of workers). So it ended up as a dud debt and it has been catch up footy since then.
Rather than increase personal tax rates(when you have low unemployment) in expectation of the ripple effect from the gfc.
They decide to be creative and introduce new taxes, then apparently they negotiated the MRRT without any treasury officials, that's arrogance or ignorance.
Labor were dealt a bad hand when they took over office, but they have outlived that excuse. Now they are just a poor government in my opinion.

 

[Some Dude]

If it's unfalsifiable , how do you know it's a lie?

(though I do agree it's a nonsense)

Yeah, fair call. Lie is the wrong word there. Perfect nonsense is much better.

Remember that both sides of politics indulge in such.

Agreed.

You pompously implied right wing bias earlier, while your left wing bias is proudly displayed with bells on.

Some context please? I haven't hid my ideology and acknowledge that like everyone, I struggle to avoid letting it affect my judgements. I try to set them aside when evaluating truth statements which is why I try to focus on how people disagree i.e. if we can't agree on how to evaluate information then as demonstrated in the ABC Bias Thread at the moment, no amount of black and white proof will mean anything.

Which post from myself are you referring to.

Part of mitigating bias is understanding that everyone has biases, including oneself. A project for your self implied intellect.

I think we have been around this round-a-bout a number of times when I have said to you specifically that I think rational thought is actually very hard for everyone. I don't hold any magic key or intellect. I have average intellect but have been gifted with a good problem solving mind which is conversely balanced by being bat crap crazy in some other areas such as inter-personal relationships. All that though is independent of intelligence, it's just how mind of all intelligence work. We all have our strengths and weaknesses. I'm offering my opinions for which everyone can pound away at my delusions as much as they like. I crave it because without being challenged, I don't usually become aware of my own failings.

Just like everyone else.

 

[FlyingFox]

Maybe we would be in a better place than we are at the moment. I don't think artificially propping up property prices has been a winner.
Also I don't think they've done anything that has improved employment figures.
The stimulus package was given at a time the economy was ramping up anyway(let's not forget they introduced 457 at the same time, because of lack of workers). So it ended up as a dud debt and it has been catch up footy since then.
Rather than increase personal tax rates(when you have low unemployment) in expectation of the ripple effect from the gfc.
They decide to be creative and introduce new taxes, then apparently they negotiated the MRRT without any treasury officials, that's arrogance or ignorance.
Labor were dealt a bad hand when they took over office, but they have outlived that excuse. Now they are just a poor government in my opinion.

What? An relatively unbiased discussion sprinkled with facts and some good insights :. Who are you and with the real sptrawler : ?

 

[Julia]

It's the perfect lie because it's unfalsiable.

That's a new word to me. Could you clarify it perhaps?

 

[Some Dude]

That's a new word to me. Could you clarify it perhaps?

Something that can't be demonstrated or proved in the affirmative or negative. For example, an non-interventionist God is a unfalsifiable hypothesis. One can believe it all you like but when proving it or disproving it is impossible.

 

[sptrawler]

What? An relatively unbiased discussion sprinkled with facts and some good insights :. Who are you and with the real sptrawler : ?

Pardon, could you repeat the question?