If this is the level of Abbott's economic understanding then we should all be VERY worried
"We know that the private savings ratio is massively increased. It’s at the highest level in two decades because people don’t trust the Government to save, that’s why they are saving so much themselves. People don’t feel rich, that’s why they are saving so much themselves. We know that real wealth per head has actually declined over the last five years because of stagnant property prices and because of falling share prices and that’s led to so much more restraint in spending which is why so many of our main street retailers and businesses feel under such pressure today."
By my reading he's saying the return to the historical average (10%) household savings rate is bad, and he would like to see asset prices, especially housing, take off again. Now the only way I can see that happening is if Australians save less, which ain't going to happen because the banks wont be able to borrow too much more than they are from overseas. The ratings agencies have made it very clear they will drop the banks from AA if they increase off shore funding too much.
I'd argue people are saving more now because they realised that spending more than you earn year after year leaves you vulnerable to any economic challenges that might come in the future. Considering the puny surpluses the Howard Govt ran, they are a drop int he ocean compared to the private debt tsunami that occurred post CGT halving.
"The Coalition’s strategy to boost economic growth is really quite straight forward and it starts with getting taxes down. There’s been a lot of talk about the carbon tax. There’s a lot of talk from the Government that the carbon tax hasn’t really been noticed. Well, everyone notices a new tax and people are particularly conscious of a new tax which doesn’t serve any reasonable economic purpose."
Just plain wrong. The Government provided compensation tax cuts BEFORE the tax came fully into effect. It was plain to see via retail sales data that growth was higher, and as can be seen by the latest polling, LNP supporters are now feeling a lot more optimistic since they've seen Abbott's wrecking ball / python squeeze has not occurred.
"Now, the Coalition will get spending down. We will do it in ways which we believe are responsible. Some of the ways we will do it will be controversial. For instance, we’ve announced that the so-called school kids bonus will go because this is a cash splash with borrowed money that has nothing necessarily to do with education. We won’t go ahead with the 6,000 person a year increase in the refugee intake because that would send the wrong signal to the people smugglers and in any event, at the moment the people smugglers are determining that intake. We will trim back the Commonwealth public sector, not because we fail to respect the work of public servants – as a minister for nine years I very much respect the work of public servants – but there’s 20,000 more in the Commonwealth public sector than there were five years ago and there hasn’t been a commensurate increase in service delivery or efficiency. So, just those changes will save about $10 billion over the forward estimates period."
So just as the peak in mining investment hits around September this year, Abbott plans to cut spending, cut public service employment, somehow cut taxes, and produce a surplus. Lets see how well that kind of policy is working in QLD by then.