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Tag Archives: Joe Hockey

The Strange Case Of The Liberal Party!

Perhaps my brain is wired differently, but I tend to notice contradictions in things.

Of course it’s pretty easy to notice the contradiction in Peter Dutton’s compassion for those living in refugee camps while he has absolutely no sympathy for those we’re holding in detention for offshore processing.

However, my brain doesn’t stop with that simple contradiction. It goes on and wants to know why when the Liberals are so bullish on people “showing initiative” and “having a go” and “doing something to help themselves” that the very refugees who’ve done that are the ones that we’re meant to despise because they paid people smugglers to bring them here. And paying people smugglers is absolutely immoral … Unless you’re paying them to tow people back.

As for the offshore processing, well, it’s hardly the sort of efficiency that the Liberals profess to love so much. I mean, if the public service took this long to process anything, it’d be privatised in a flash.

But then I also see strange inconsistencies in so many of the Liberal Party’s positions:

If “high” rates of income tax are a disincentive to people working, won’t reducing penalty rates also have the same effect?

Why did Joe Hockey think it was outrageous that someone as well off as he is only have to pay $38 for his son’s medical bills, but be similarly outraged that he was entitled to claim an allowance for renting his wife’s place while staying in Canberra?

Why do they seem to think that unions taking money for ensuring that projects are completed on time shows how dodgy and corrupt the unions are, but the employers paying the money have no case to answer?

Why do they complain about 18C and how it hampers free speech, but turn around run an ad campaign that accuses the CFMEU of being racist? Or why does George Brandis, after telling us of our right to be a bigot, complain that people showed an incredible amount of “bigotry” when talking about Abbott’s religious views. (Which given Abbott’s recent speech, one could argue are another great example of inconsistency!)

Why do they believe that Labor taking money from unions makes them beholden to the union movement when in government, but the money the Liberals receive from various groups has absolutely no effect on their decision-making?

Why do they always argue Labor members accused of something dodgy should stand down and leave Parliament, but any Liberal member should be subject to procedural fairness?

Why, when Labor gives out funds without any obvious process is it “pork-barrelling” or “rewarding their mates”, was it ok for the Arts Minister to have a special fund to reward “excellence”?

Why was the removal of Kevin Rudd as Prime Minister an outrageous betrayal of democracy, but the removal of Tony Abbott just something that needed to be done?

And, finally, why, when they’re such supporters of small government and so positive about the private sector, are any of them in Parliament on the public payroll and not out helping to build the economy?

 

Morrison’s Approaching Waterloo

It may be early days but Joe Hockey’s second and final attempt to bring down a credible budget appears to be unravelling already. Even on the night of his budget speech in May it was clear that his growth projections were far too optimistic.

It makes one wonder if the whole budget process was one started first by establishing a bottom line and then working backwards, fudging the figures necessary to substantiate it.

Is that how they eventually arrived at a growth estimate of 2.75%? Perhaps it was a case that if it sounded unattainable, to hell with it, that’s what it was going to be.

And then they made it 3.50% all the way out to 2019/20?

rbaThe Reserve Bank announced on Friday it was downgrading its growth estimate to 2.25% for the current fiscal year. Surprise, surprise! If correct, that has the potential to blow out the deficit by a further $11 billion.

Not that we should be concerned about deficits. It’s the ability to manage them that should have us concerned; particularly when our current treasurer thinks we only have a spending problem.

The fact is, deficit spending is what we need right now, but it has to be targeted. It has to be value adding, creating employment and making a positive contribution to our GDP.

The current deficit projections cannot be attributed to anything positive because they are essentially caused by over-optimistic estimates, not excessive spending. While revenue for the first three months of the May budget is on track, giving Scott Morrison some breathing space, it is based on reduced earnings that are likely to continue declining.

Peter Martin in ‘The Age’ says, “The charts in the budget that predict a return to surplus by 2019-20 were built around an assumption of fast economic growth of 3.5 per cent in the five years to 2021-22.

That growth estimate is simply unreasonable and based more on hope than insight. That means revenue projections over that same period cannot be achieved without significant tax increases. Realistically, a surplus is not on the horizon any time soon.

How long Morrison will continue to kid himself about his perceived revenue/spending problem remains to be seen but sooner or later he will have to face the reality of a slower China and a population not growing as fast as expected.

gstHe has also stated that any increase in the GST would not be used to boost the overall tax intake. How could it not, unless it is all given away in compensation. If that’s the case, why bother increasing it?

Thus far, Morrison has given no indication that he understands how to manage a national economy any better than Joe Hockey. I have no doubt Malcolm Turnbull has a better idea but he is hamstrung by a neo-classical mindset that suffocates his extreme right wing colleagues.

This situation, therefore, foreshadows a difficult time for both men. Sooner or later, unless some Chinese miracle occurs, there’s going to be a clash of ideologies, a seismic shift that will see one of them emerge triumphant, while the other goes the way of Joe Hockey.

If it’s Morrison that survives, the economy and by extension, the Australian people, will be the big losers. However, the spin merchants within the Liberal Party will camouflage it such that it is not likely to be apparent until after the next election.

tppWithout a radical change in strategies along the lines that Italy and Canada are starting to entertain, we will continue in decline for some time yet.

And we should not expect Andrew Robb’s Trans Pacific Partnership (TTP) to come to the rescue either. The news from Hilary Clinton is not good. It is unlikely that, in its present form, it will achieve the 85% GDP target of member nations it needs, for approval.

I suspect Scott Morrison is about to meet his Waterloo.

 

Poor people have it. Rich people need it. If you eat it you die. What is it?

As the snake oil salesman and his happy clapper gear up to sell us on their compensation for a higher GST, it is worth remembering how much we have already given up in the last couple of years.

When Joe Hockey decided to forego $6.5 billion revenue from the mining tax, workers paid a heavy price through his decision to freeze the superannuation guarantee at 9.5% until 2021. Labor had scheduled incremental increases reaching 12% by 2019.  This will now happen 6 years later.

The cost of this for someone on $50,000 a year is $7,500 less deposited into their superannuation over the next decade which would compound over a lifetime of work to a significant amount.

The income support bonus and schoolkids bonus will both cease at the end of next year and the low income superannuation co-contribution the year after that.

The low income superannuation contribution gives up to $500 a year to help those earning $37,000 or less save for their retirement.

The schoolkids bonus is a $430 boost to family tax payments for primary school students, and $856 for families with children at high school.

The income support bonus is a payment of $221.20 if you are single, $184.20 if you are partnered, to people who are on benefits.

The Mature Age Worker, Dependent Spouse, and Net Medical Expenses tax offsets have all been phased out.

The proposed increase of the tax free threshold to $19,400 has been canned, costing us an extra $228 in taxation, and the income thresholds used to calculate Medicare levy surcharge and Private health insurance rebate will not be adjusted for three years.

From 1 July 2015, the primary earner income limit for Family Tax Benefit Part B is $100,000 instead of $150,000.

New mothers who receive parental leave benefits from their employers will no longer be able to also collect the government scheme from July 2016

Unemployed under 25-year-olds have to wait four weeks to get the dole.

Add to this the cuts to health and education, fuel levy indexation, proposed changes to university fees, working till we are 70, stagnant wages, and the loss of FttP NBN, and we are a long way behind where we were a couple of years ago.

Getting rid of the carbon tax was supposed to ease our cost of living but all it has done is rob us of about $7 billion a year in revenue.

And now we look like having an extra 5% added to every bill we pay (with the possible exception of fresh food), and 15% added to health and education costs. It kinda makes the GP co-payment look good.

Oh but low income earners are to be compensated.

I wonder how close that compensation will go to making up for all that has been taken from us in the last two years let alone the estimated $2500 (or $4000 according to Curtin University) an increased GST will cost the average family every year.

It’s all very well to suggest that businesses need tax breaks but if their customers have no money to spend, what’s the point?

Instead of trying to squeeze blood from a stone, how about tapping into the rivers of gold flowing to offshore tax havens.

Poor people have it. Rich people need it.  If you eat it you die.  What is it?

Nothing.

 

Stop The Homeless … A Moderate Proposal

When it’s all boiled down, politicians aren’t actually there to run the country. That’s what we have the public service for. It’s not that politicians don’t have the right to set the agenda after winning an election; it’s just that very few of them would have the faintest idea how to actually put their ideas into practice.

Politicians are there to argue their case, get elected and then to instruct the public service to implement their policies. The public service is there to – as far as possible – implement their policies while explaining to them the implications and problems associated with said policies.

“Yes, Prime Minister, I know that you were elected on a policy of absolutely no taxation, but you are aware that this will mean that your government has no revenue whatsoever to pay your salary. This is not a problem but it means that you’ll be running a rather large budget deficit and the following five hundred and twelve page summary of our thirty eight volume report on the consequences has been attached to this email for your consideration.”

Anyway, when Abbott and Hockey tried to say last month that they had good policies, they just didn’t explain them well, I thought that was rather like a teacher saying that he had an excellent curriculum, he just couldn’t get the students to listen to him because he hadn’t managed to engage them or even get them to turn up to class. Or perhaps a better example would be a salesman who tried to argue that they had an excellent product, they just couldn’t sell it, so it was really unfair that they were losing their job just because they hadn’t made a sale in two years.

Hockey didn’t seem to think there was any contradiction in pointing out that the way to afford a house in Sydney was to “get a better job” – in other words, earn more money – and his repeated insistence that the Budget Deficit couldn’t be fixed by raising revenue (in other words earn more money).

However, after Tony’s “Let’s really trash the memory of Maggie Thatcher by inviting the most arrogant sycophant we can find” speech, I got to thinking.

Tony seems to think that his most significant achievement is stopping the boats. Now, part of the reason that – prior to his election – people didn’t think he’d be able to stop them was the fact that they presumed that he’d actually be bound by the normal international protocols. They failed to understand that he was channeling Idi Amin.

Anyway, Abbott’s great success at stopping the boats made me think that I could start my own political party and call it the “End Poverty Party”.

Our first plank would be to end homelessness.

While it may not be a crime to be homeless, loitering is still a crime and we could round up all the homeless and send them off to detention centres in some un-named location. OK, this may cost more than actually putting them all up in a motel for the rest of their lives, we need to send a message to stop people from becoming homeless in the first place.

Some bleeding hearts will undoubtedly complain about human rights being ignored and attempt to use what’s now happening to the homeless to further their own narrow political agenda of human rights for all. To prevent this we’ll make revealing the location of the homeless or anything that happens there subject to the secrets act and therefore punishable under the anti-terror laws. (Of course, we won’t use these against journalists. Providing the journalists cooperate when taken in for questioning.)

However, if something should leak out, we’ll just simply say that we “Stopped the Homeless” and that we did out of concern for them because we didn’t want them taking the risk of sleeping rough. And we’ll point out that no deaths have occurred in the street since we implemented our policy and we’ll start lecturing other countries on how it’s done.

Now, unlike Mr Abbott, I realise there’s more to government than just having one policy. I also have a plan to end poverty by making it illegal and anyone with less than a certain amount of money would have to pay a large fine. This sort of deterrent should give people an incentive not to be poor. If they couldn’t pay the fine, they could work it off and in a scheme similar to work for the dole, we’d offer them to employers for nothing. This would promote jobs and growth, because look how many employers would hire extra people if they didn’t have to pay them. This would also rule them out of the housing market giving a much needed pause to the current housing boom. Not having homes to go to would mean that they were happy to stay at work all day and all night and Australia’s productivity would skyrocket.

Yes, it’s true that people could get around this by becoming an employer, but this is the sort of country we want to promote: One where everyone’s an employer and the only workers are those coming out on 457 visas or with some company that’s bringing its own workers because there’s a shortage of people with necessary language skills to talk to the other people working for the company.

Obviously not everyone should work for nothing. Certain people deserve to be well paid for their endeavours. People who have special skills. Like Arthur Sinodinis, who was paid $200,000 for his skills by Australian Water Holdings. But to earn that sort of money he had to put in long hours sometimes working 25 to 40 hours a year performing work so complicated that he couldn’t actually remember the detail. Or people like Joe Hockey who  is now to become an ambassador so that he can use his skills to explain Australia’s position with such the same diplomacy as his poor people don’t drive comments or when he told us that Jula Gillard didn’t deserve respect.

On social issues, such as gay marriage, we believe that some should be determined by having on non-binding plebiscite on whether we should take the change to a referendum, while others should be decided by a conscience vote. And in the case of certain policies, we believe that people with a conscience would all vote the same way that I do, so I’ll just determine the policy and we’ll hear no more about it, apart from the sort of people that whinge about everything so we can just ignore them.

And finally, because three policies is surely not enough, we’ll have a fourth: we’d have a policy on climate change. We’re against it – naturally. However, if it isn’t caused naturally, then we need to do something about it. And the best way to combat climate change is to make people more aware, so we have a moral obligation to export our coal so that places where they don’t burn coal for electricity can see first hand the damage done by coal-fired power stations. Not only that, but once these places have electricity they’ll be able to get the internet and read all the articles and be better informed, so they’ll know all the facts because if there’s one thing the internet gives you, it’s access to unbiased, clear-headed information. Of course, some want a ban on coal, but what good would that do. Our coal produces just a small percentage of the world’s greenhouse gases. Any action Australia takes would be about as meaningful as a burglar ceasing to rob. It wouldn’t have any real effect on the crime statistics. There’s no need for him to change his behaviour, and there’s certainly no need for the police to investigate his crime. In fact, I’m not even sure that burglary exists and if it does, I’m not sure that it’s the burglar who’s causing it.

As you can see, I have the basis for the sort of party that’s a real threat to Turnbull. Once I launch my party, there’s a real danger that a large number of his party will defect and join it.

 

Malcolm Fears neither Debt nor the Conservatives.

What a monumental turn around. In a newspaper interview this week, Prime Minister Malcolm Turnbull has shrugged off the Abbott-Hockey debt and deficit rhetoric and signalled more debt to come.

“What we’re trying to achieve is to ensure that Australians who do live today in a high-wage, generous social welfare net economy, will be able to do so in the years ahead and in an environment where wages will be higher and we’ll have a bigger tax base and we’ll be able to provide for those in need more effectively,” he told Fairfax Media.

Contrast this with some of the verbal diarrhoea that came out of the mouths of both Abbott and Hockey when they convinced the more gullible amongst the electorate both before and after the 2013 election, that austerity was necessary to rein in Wayne Swan’s debt and deficit disaster.

Turnbull went even further when he said, Everything, every single element, is on the table, and I know that always means that someone can then run a scare campaign, but I’m sorry, we’ve got to stop … this is part of the political tradition I’m determined to end. We have got to be able to consider policy options in an unfettered way.”

The significance of this statement and his acknowledgement that both revenue and spending options are on the table, cannot be ignored. While signalling a reversal of the previous administration’s scare mentality and adopting an expansionary mindset including borrowings for public transport projects, he has also, deliberate or otherwise, checked Scott Morrison for suggesting we only have a spending problem.

What are we to make of this policy about-turn?

My reading is that Malcolm has decided he will be his own man and if the party doesn’t like it, they can’t do much about it without making themselves a laughing stock. While the extreme right wing of the party might like to think it has its leader on a short leash, the opposite is the case.

Turnbull, it would seem, has decided that he will crash through or crash. To make public his intentions in such flamboyant language is a challenge to those who still cling to the ultra-conservative mindset that would hold the nation back.

transCiting public transport as the flagship of future expansion is a good start. Who among us would deny a pressing need to upgrade and prepare ourselves for future population growth that will require some radical thinking in the area of mobility.

Victorian Premier Daniel Andrews will be delighted as will Mike Baird in NSW. Both have big plans for improving transport in our two major cities. Turnbull has foreshadowed that roads, urban infrastructure and ports, previously considered state responsibilities by Abbott and Co, are now up for Commonwealth funding participation through additional borrowings.

The burning question, ‘where is the money coming from’ has been answered before it has been asked. The former Goldman Sachs CEO knows how money works, unlike his parliamentary colleagues and is not afraid of debt.

This will not be good news for the banks. Such projects, normally financed within the private sector’s financial houses, will have the Commonwealth participating for part of the return on investment.

“We don’t need the same internal rate of return as Macquarie Bank would, obviously, but if we have a piece of it, then we’re able to invest more, frankly. Then we’re much better off being a partner rather than simply being an ATM, for which you get generally scant thanks or recognition,” Turnbull says.

abb anshhTony Abbott and Joe Hockey never understood this, nor does the conservative wing of the government that never wanted Turnbull as leader. They will be alarmed at his recent comments and will fight tooth and nail to stop him. But they cannot ignore his popularity and his importance in keeping them in power.

That is why he will win and so too the unemployed. While the private sector is twiddling its thumbs Government must take up the slack. That is not a theory, it is an accounting rule for a national economy. It is exactly what is needed today. Joe Hockey failed as Treasurer because he expected the private sector to do the heavy lifting.

At today’s historically low interest rates, issuing public debt has never been cheaper and when invested in projects that add value to the nation, promote growth, increase employment and by extension, increase tax revenue, everyone benefits.

Turnbull’s approach to inclusivity will enrage his conservative colleagues, but he knows there’s little they can do about it now.

 

Morrison’s Dilemma

Within a comparatively short space of time, we are starting to see our new Treasurer’s ‘modus operandi’ toward economic reform.

Scott Morrison’s recent claim that eight out of ten income tax payers fund our total welfare payments, is a poor attempt at shock therapy, not well thought through and in that horrible world of political comparisons, a dumb way to get the community onside.

It would seem Scott Morrison only knows one way to approach a difficult problem and that is to fire off a broadside, see what it achieves and then begin the tough work of negotiation and compromise. On this occasion, using the old Joe Hockey style of placing his foot in his mouth, Morrison’s comment was not a good way to start.

Selecting individual elements of revenue raising to match a particular expense item is a lazy way to signal target areas where spending cuts might be on the agenda and is, in the overall analysis, quite useless. In this case Morrison uses the 2015-16 budget to compare spending estimates on welfare of $154 billion with personal income tax revenue estimates of $194 billion to fuel his broadside.

One would think any secondary school student could do something similar; cherry picking and coming up with what are totally useless comparisons.  One could use the company and resource rent revenue estimates of $71.2 billion and compare that with the estimated spending of $69.4 billion on health. But what relevance does that have?

It seems pretty clear from Morrison’s statement that he wants to find savings in welfare expenditure. Depicting the poor, long suffering taxpayer from Middle-Income Street, in Plain Town, as the one shouldering the welfare burden, might appeal to the lowest common denominator, but it ignores the reality.

All government revenues go into the Consolidated Revenue Fund. In some cases, specific revenues are raised for specific purposes such as the fuel excise being used for only for roads. But this is rare. Income tax revenues have no such specific purpose and to relate them directly to welfare payments, as if to say this is where your money is going, is wrong.

But what is Morrison really up to? He has earlier told us that we don’t have a revenue problem, only a spending problem. He bases this on the increasing ratio of spending to GDP compared with a  lower ratio of revenue to GDP. In doing so he is ignoring 50% of the problem. A higher revenue ratio would also reduce the spending ratio.

henryIf we accept former Treasury Secretary Ken Henry’s assessment that both revenue and spending should, over a given cycle, be 25% of GDP then it is clear both areas need to be addressed. Attacking spending in isolation will lead to a contraction in the cycle which, by a strange coincidence, is exactly what we are experiencing now.

But Liberal ideology limits Morrison’s choices. Raising taxes is anathema to their sense of justice and fair play. They would rather lower taxes, particularly for their corporate friends. They would rather strangle Union power, limit wage growth and cut back on welfare. It is the opposite of what they should be doing.

Higher wages means higher tax revenue, greater demand for goods and services, higher GDP which translates to a higher living standard for all. The one exception is that company margins are lower. So what? Additional demand compensates for that. The present Liberal ideology is framed with blinkers on, unable to see the bigger picture.

jobsThis is Scott Morrison’s dilemma. For as long as he maintains this blinkered approach to growing our economy, he will fail to capitalise on the power of demand side economics. And he will continue to preside over a seriously under-utilised workforce and lower than could be realised revenues.

Under Morrison’s management, deficit spending is destined to become the norm, not that there is anything wrong with that, provided it translates to higher employment. At the moment it is not.

 

Let’s We Forget! Turnbull, Turnbull, Turnull. Whoops, I Left out out a “B”…

It’s suddenly grown harder to write. Both satire AND intelligent articles.

I mean, when Tony Abbott was PM, all you had to do was quote him and you had satire.

As for Westpac’s decision to raise interest rates on Home Loans, Joe Hockey had the answer to that when Wayne Swan was Treasurer.

I can’t remember what the answer was, but it was something to do with telling them not to do it.

Anyway, Joe’s gone to America or the backbench, whichever is far enough a way that he – like poor people – can’t drive back. He’s no longer there to mock and ridicule about the fact that, even under a Liberal government, banks can do what they like.

But hey, them Liberals demanded that women got counselling before they had an abortion. Remember that, anyone?

Ah, I must be making it up. Because they sent that woman back to Nauru. She’d changed her mind. She didn’t need counselling. She’d changed her mind because she thought that she might need counselling.

Rather like Mr Turnbull who seems to be able to change his mind, but unfortunately can’t be sent back to Nauru, so that he can see that if you’re only Prime Minister to go along with the majority, you might as well just be a voter. If you’re not going to lead, you might as well follow.

OK, let me complain then, that the age of entitlement should be over and what on earth were they doing chartering a plane to send this woman back to Nauru? Why should “illegal immigrants” be given jets when when Australia’s unemployed can’t even be given free public transport?

Gee, with logic like that, I may even be able to become the next leader of the Nationals.

Sorry Barnaby, but it seems that none of the Nationals like you because, not only are you an accountant who has trouble with numbers, but you may very well lose your seat at the next election. 

 

Money makes the world go round … which is why we had a flat earth before it was invented!

OK, Dr. Joanne Howe’s report on the China Free Trade Agreement is brilliant and extremely accurate. No, I haven’t actually read it, but not reading it didn’t stop Mr Turnbull from dismissing it or Andrew Robb as describing it as  “not worth the paper it’s written on”. One doesn’t need to read something to dismiss it. Think Christopher Pyne’s proud declaration that he hadn’t read “The Gonski Report”.

I may actually get around to reading the report on the Chinese Free Trade Agreement. After all, I read just about everything. I even read the Liberal’s “Real Solutions” booklet which was mainly full of problems. In fact, it can be summarised by simply stating that the fundamental problem is that we have a Labor Government being run by a woman, whatsmore!) and the solution is to vote us in. As Tony and Joe used to say ad infinitum, “We have a plan”, and when that wore thin they developed it a bit further and said it was for “Jobs and Growth”.  When it became clear that it was their own jobs and growth that they were talking about, even their own party realised that it was time for a change.

Anyway, I was reading the Fairfax Fluff this morning and apart from an opinion piece stating that it was only Muslim young people who were joining IS which completely ignores a couple of non-Muslim boys who went and joined, I was most taken with the editorial, “Trans-Pacific trade deal has tremendous potential”.

It began with an economics lesson:

“The fundamental reality driving economics, politics and public policy is scarcity – there are unlimited wants but limited means.”

So far, so Year Eleven Economics. Of course, the trouble with this truism is that, like all truisms, it often moves from the indisputable part to a justification of what the speaker actually wants.

Not everyone gets what they wants, so you’ll just have to compromise and go and see the movie I want to watch!”

Or to use a more recent example.

“There are limited means in the economy so the well-off can’t afford to pay any more tax on their superannuation, but you need to cut your penalty rates so that businesses can work 24/7, just like 7/11!”

Similarly, the editorial jumped from this economics lesson to the rather interesting proposition:

“Most of the industrialised world has come to the conclusion that open markets provide the best outcomes for the biggest number of people.”

Now this is an interesting statement for a number of reasons. The first being that it excludes the non-industrialised world, but still has the qualifier, “most”.

However, it’s when we start to think about this in terms of the generalisation that we realise that it’s not just full of qualifiers, but a bald-faced lie. Granted that they are primarily talking about free trade between countries. Nevertheless, even the TPP doesn’t completely open the markets between countries, it just makes them slightly freer. And, as has been pointed out so many times, it makes corporations so much freer to sue governments when their profits are threatened.

Of course, the idea of “the best outcomes for the biggest number of people” is an interesting concept in itself. Slaughtering everyone in Florida and distributing their wealth equally to the people of Cambodia would also provide the best outcome for “the biggest number of people” but there are all sorts of moral and ethical issues as to why this isn’t a good idea.

But it’s the whole idea of how we perceive economics that most intrigues me. Like this particular editorial has done, we reduce it to a simple concept and then jump from that concept – whether it’s true or simply a belief – to make a whole lot of judgement calls which often move so far away from the concept that we don’t realise the journey we’ve been taken on.

We’re persistently told that free markets are the best by governments who insist – often quite correctly – on a whole range of restrictions. Why can’t I sell alcohol to ten year olds? Why can’t I start my own pharmacy and dispense medicine without all the red tape of requiring a prescription for certain medications? Guns, I’m not allowed to sell them from the back of my car. In fact, why can’t I turn my house into a nightclub and pump out loud music till the wee hours of the morning?

There’s a whole range of restrictions that we all consider reasonable before we even start to look at the ones about which there could be an argument for “freer markets”. (OK, when I say “all”, I’m ignoring David Leyonhjelm whose views seem a bit extreme when compared to moderates like Abbott and Trump).

For years we’ve been removing tariffs and eliminating subsidies in certain industries. The idea is that it’s the “best outcome for the biggest number of people”. This may well be true.

But I have a few truisms of my own. And one of them is when someone says, “Trust me, and don’t listen anything that’s questioning what I want to do, because I don’t”, it’s time to to ask for the evidence.

And when the government’s own modelling suggests that the China Free Trade Agreement will only bring about 6,000 extra jobs, claims made by Mr Robb seem a little far fetched.

Yeah, trust me. Don’t listen to those unions. They’re just racist and they’re concerned that Chinese workers will improve the prosperity of this country so much that people will realise that the unions never did anything for the workers of this country.

 

A Political Watcher’s Pig Heaven

Over the last two years a number of articles have been written here at the AIMN about tax expenditures and the need to rein them in if the economy is going to reflect a more even distribution of the wealth.

I couldn’t count the number of times mainstream journalists had put the question to former Treasurer Joe Hockey and Finance Minister Mathias Cormann.

I cannot recall the number of leading economists that have also added their voice to the need for reform to end the waste of concessions to superannuation, negative gearing, the mining industry and capital gains.

But I know there have been many.

Yet for two years, Hockey and Cormann defended their decisions not to touch these sacrosanct areas of welfare for the wealthy at the expense of the average worker.

It was the elderly, the low paid and the sick who were told to pull their belts in, stop leaning on the rest of us and pay more for health care while receiving less in retirement.

Yet, five minutes after both Tony Abbott and Joe Hockey are given their marching orders and despite Mathias Cormann miraculously holding on to a job he is not very good at, the government has finally agreed these areas of obscene generosity can be now be looked at. What has changed?

mitchellFormer PM Tony Abbott did the rounds of his favourite shock jocks last week to vent some of his angst about the treachery he experienced from within his cabinet that resulted in his overthrow. He has made a point of saying nothing has changed. It would seem he hasn’t looked very far.

This week’s summit, both called for and chaired by Malcolm Turnbull, was a big change. The summit was a means of getting stalled reform initiatives back on the table.

Business groups, unions, welfare and social groups all got to have a say, with the notable exception of the Institute of Public Affairs (IPA), Abbott’s favourite policy spruiker.

So, some things have changed.

It is inconceivable that Turnbull will not try for further, more substantial changes. The difficulty he faces is the hard right wing of the party who reluctantly allowed him back as leader.

They still don’t trust him. They think he is a Labor stooge, a socialist at heart, one who needs to be watched very carefully.

This lack of trust, this suspicion from the Right that Turnbull is not one of them will continue to undermine his agenda for Australia.

If the Right succeeds in holding him back they will stall the nation’s ability for genuine economic recovery and frustrate the voters.

Under Abbott, the Liberal Party made a hard turn to the right on practically everything. Turnbull wants to bring it back to the centre. In doing that, he risks both alienating an important support base within the party as well as making the party appear no different from Labor on issues that matter to the voters.

The Australian voter will generally go along with either party on foreign policy, immigration and national security. Their main interest is in education, health, climate change and the economy.

Thus far, both parties have no answer to what is perceived as spiralling debt and ongoing deficits. The next election will be fought on these four issues.

MORRISONThe new treasurer, Scott Morrison has already blotted his copy book claiming we only have a spending problem. He is wrong, of course, but the mere fact that this was his opening salve doesn’t look good for his, or the government’s, credentials as economic managers.

In the meantime, Labor will always trump them on climate change, education and health. The next twelve months will be a political watcher’s pig heaven. Can Labor convince the electorate that they were better at running an economy?

Can Turnbull build a consensus between the unions and industry while keeping welfare groups happy? Can he convince anyone that Direct Action is not a waste of money?

One thing is certain. The bad air, the despondency, the feeling of being dragged back into the middle of the last century has passed. We have been liberated from the threat of a recurring dark age.  No longer are we embarrassed, ridiculed and portrayed as recalcitrant dimwits from down-under.

For that I’m grateful, but I suspect the turbulence for change within the electorate is going to make life inside the Coalition a smouldering keg of discontent that threatens to explode at any time.

 

Morrison heading down the wrong path.

Watching Scott Morrison’s interview with Leigh Sales, on 7.30 Wednesday night I was hoping to hear something…anything that indicated that he possessed a better grasp of the economy than his predecessor. Sadly, all I heard was a lot of waffle, a collection of weasel words, the usual spin and a refusal to look at what is 50% of a balanced economy, i.e. revenues.

Raising taxes, he said, was code for increased spending. He did not agree that the economy has worsened despite Leigh Sales listing the comparison figures on unemployment, the exchange rate, GDP growth, the deficit and the debt, all of which clearly identified a worsening position since Labor left office.

He talked about getting people back to work, how good it was to see the participation rate rising. But there was nothing about job creation, where the jobs for 780,000 participants would come from or how the 156,000 job vacancies could be improved. There was no plan.

The Treasurer was already in denial about the comparative state of the economy and he was already looking away from where the real problems are, away from the point where he needs to begin his much anticipated restoration.

turn-300x168Prime Minister Malcolm Turnbull has made his first serious mistake. He has committed his government to continue with the failing austerity measures introduced by Joe Hockey in an attempt to bring the budget back to surplus.

If he is setting Morrison up for a gigantic fall and using that as a reason to change tack, to move away from this obsession for a budget surplus and embark upon a demand driven economic recovery via a stimulus, it isn’t going to happen soon.

Therein lies the problem.

The focus on government should not be on the deficits but on the prosperity and inclusion that full employment delivers. People are easily frightened by fairy tales of terrible consequences when new ideas are presented. That sense of fright is driven by a lack of education that leaves people unable to comprehend how the economy actually operates.

Deficit budgets will not bring about terrible consequences. Properly targeted, they will increase employment, tax revenue, drive demand for increases in production, higher wages and better living standards.

Neo-liberals magnify the fear of terrible consequences, by demonising what are otherwise sensible and viable explanations of economic matters. They know that by elevating these ideas into the domain of fear and taboo, they increase the probability that political acceptance of the ideas will not be forthcoming. That is what I suspect Morrison will do.

Morrison has demonstrated already he is no more up to the job than Joe Hockey. If he thinks we have a spending problem he is heading down the wrong path. We have a revenue problem clearly identified by excessive tax expenditures.

Morrison’s announced strategy advances the neo liberal ideological agenda: present simple “truths” guiding government fiscal policy and the public will accept it. Neo-liberals have vested interests in ensuring that the public does not understand the true options available to a government that issues its own currency.

neoThey present these simple “truths” by advancing a sequence of myths and metaphors that they know will resonate with the public and become the ‘reality’. Myths such as, “the country will go broke,” or “we simply can’t afford it,” or “we must live within our means.”

That last myth is the most dishonest of them all because it projects the image of a household economy which, in the case of a currency issuing government, is simply false.

Morrison acknowledges the level of Government spending has not fallen during the Coalition’s term in Government. “Expenditure as a percentage of GDP is over 26 per cent, which is where it was at the height of the GFC,” he said. “This is not something that we believe is sustainable.”

Government spending is as high now as it was during the height of the GFC and increasing. And so it should. In the June quarter, government spending was the only reason we avoided a quarter of negative growth. That fact alone should be ringing bells, but it isn’t.

Ideally expenditure as a percentage of GDP should be around 25%. But there are two ways to tackle that. One is to raise revenues, the other is to restrict outflows, which doesn’t necessarily mean spending.

In the current economic climate it seems no government has the courage to increase taxes. However, restricting outflows without cutting direct government spending can be achieved quite easily.

Tax concessions on capital gains, negative gearing, superannuation and mining subsidies are at obscene levels. They blatantly favour the wealthy. This is where Morrison needs to concentrate his efforts. If he fails to recognise this obvious area of savings he will be of no better value to the country than Joe Hockey.

That is why, for the economy to climb out of the mire, Malcolm Turnbull needs to reverse government fiscal policy. He can no longer rely on the RBA to restrict aggregate spending. Interest rates are now so low, going lower won’t work anymore.

scalesHe needs to rebalance the scales. Current tax expenditures weigh too heavily against tax revenues. Superannuation is not an economic driver any more than capital gains. Negative gearing inflates both the property and rental markets which in turn reduces disposable income.

Raising taxes is not a code for spending? As a confidence builder, it was not a great start from the new Treasurer.

 

It’s Worth Remembering That We Started All As Communists!

“It is hard to overstate the importance of free trade in the economist’s mind.

“In the beginning, there was just you, a pig, your family and your hut. Then your mother went to market and traded your pig for a cow and two chickens. All of a sudden, you could have milk and eggs. Your cow produced plentiful milk, your chickens plentiful eggs, and each week your family was able to trade these for other useful products, such as grain, cloth and soap.

“The history of humanity is the story of disparate communities getting together and increasing opportunities for trade, in turn driving increasing opportunities for consumption and rising living standards (and yes, periodically, provoking major wars).

Jessica Irvine,

Why Free Trade Is Good For You,

Sydney Morning Herald, 10th September, 2015

Strange that such balderdash is published in a major newspaper. The suggestion that “In the beginning”, families were living alone in a hut. Then suddenly the next step was going to a “market” where it was possible to trade a pig for a cow and two chickens. For an inexperienced trader, it seems that Mum sure managed to get the better of that deal.

I’m not just being pedantic about the absurdity of the trade that Irvine mentions, I’m more concerned about her peddling the myth that markets arose very early and that trading was the natural state. While it’s true that markets did develop over time, the early congregations of humans were tribal and the tribes were more communist in nature than traders.

When we talk about communism these days, we immediately think of those totalitarian regimes like the USSR. We rarely actually think of the meaning of the word, and how often we adopt “communistic” principles in our everyday life.

Let’s start with the meaning of the word:

communism
ˈkɒmjʊnɪz(ə)m/
noun
  1. a theory or system of social organization in which all property is owned by the community and each person contributes and receives according to their ability and needs.

Tribes tended to look after one another and the spoils were shared. If you had a good hunt, you didn’t demand that your less successful neighbour traded you his bow and arrow in return for sharing in the feast. Neither did you keep a tally and suggest that he would need to pay you back with interest. And while markets developed over time, these were to enable trade to occur between people without tribal relationships. The idea that people started trading with their next door neighbour – while it sounds plausible to someone whose lived their life in a society where we’re encouraged to think of our obligations as ending at the door of our “hut” – is just a fiction that helps economists perpetuate the concept of trade as the only way that societies have functioned.

And even today, if you think of the average workplace, some things will be “traded”, but often people work of communistic models. When someone asks to borrow your stapler, you don’t check the number of staples used and demand their repayment. Neither do you suggest that because you helped out that person by holding a ladder, then they need to sign a form granting you five minutes help from them.

I would suggest that if that’s the way your workplace functions, then you’d be better off out of there.

However, it’s the bastardisation of the capitalist model that most intrigues me.

Recent years have seen a privatisation fetish from various governments. As I’ve said previously, it seems a rather strange proposition for governments to argue for the sale of assets on the grounds that someone else is much more competent at running them than they are. “Vote for us because we know that we can’t build things on time and under budget”.

Not that private firms have a great track record in that area.

So we have successive governments selling off our assets to private industry. Which, in a capitalist world, should mean that private industry is on its own and should sink or swim by its own competence.

Unfortunately, that’s not the way it works. And we can see that most clearly through the disruptive innovation which is taking place within the energy generation industry.

Disruptive innovation, in case you haven’t heard the term before, is when an innovation changes the business model of the particular industry in such a dramatic way that the big players are no longer the big players. Perhaps one of the best examples is how many of the giants in the computer industry thought of the personal computer as a toy which would have no effect on them. Another example is the streaming of movies making video stores virtually obsolete.

Usually the big players continue to service their customers, ignoring the new customers until it’s too late.

So while once going off the grid would have been prohibitively expensive, with the growing ease of installing things like solar panels and technological improvements in things like battery storage, the energy giants face enormous challenges.

What’s their solution? Well, some companies have suggested that people should be required to pay them even they’re not using their product, which is an interesting concept. But surely no government would be game to argue that one, if the assets were still in public hands.

Of course, a better solution would be to embrace the new technologies and to become a distributor and user, but that’s the thing about disruptive technology, it disrupts those who fail to see the need for change.

Yeah, those wind farms are ugly and Joe’s not Treasurer any more. I don’t know why I mentioned that.

 

Politicians want unions to be accountable?

Dyson Heydon and Tony Abbott want union officials to be held as accountable as company directors. Personally I would like company directors also held to a higher standard and I would like to see our politicians held to the same transparency and accountability.

After all, what is the difference between a politician claiming entitlements for dubious expenses and a union official, or a party executive, using a credit card for same?  What is the difference between a company director lying to shareholders, or a union official lying to members, and a politician lying to the electorate?

Government funds are our money. Citizens are the ones who entrusted their taxes to the government to be spent in our best interests – we are the members.

Abbott talks about deals and kickbacks between unions and employers – how about the deals between politicians and big business?

John Howard misled the parliament over meetings he had held with ethanol producer Manildra’s boss – massive Liberal Party donor Dick Honan. It was eventually proved that the meetings did occur, and three weeks later the government increased trade penalties against a Brazilian ethanol producer.

Peter Costello, the Treasurer, appointed Liberal Party megadonor Robert Gerard to the Reserve Bank board despite being told by Mr Gerard that he was involved in a 14-year-long tax evasion dispute with the Australian Taxation Office.

Peter Reith was appointed as a consultant to defence contractor Tenix immediately after resigning as defence minister.

Health minister Michael Wooldridge signed a $5 million building deal for the Royal Australian College of General Practitioners and days later, after resigning as health minister, was employed by the college as a consultant.

It was the appointment of Alexander Downer as an adviser to Woodside Petroleum in his years after politics that caused a former ASIS operator to blow the whistle on the bugging of the East Timor parliamentary offices. His is one of the passports that has been confiscated by the fearless Brandis and Bishop team who are keeping us safe from terrorism….and scrutiny.

Look at the members of Joe Hockey’s North Sydney Forum and then consider the laws that have been revoked and enacted and proposed since the Coalition came to office.

Today we hear that the government are advertising for new board members for the NDIS.

Laura Tingle, in an article headlined National Disability Insurance Scheme board discovers their jobs are being advertised by reading the newspaper,writes:

“Today’s effort from Tony Abbott is just the latest attempt to erode the voice, advocacy and support for people with disability. Instead of getting on with the rollout of this transformative scheme, Tony Abbott is focussed on getting jobs for his mates in big business.”

When Labor and the unions rightly point out that the China Free Trade Agreement does not explicitly require mandatory labour market testing, they are labelled as racist xenophobes and told to get out of the way, despite both unions and the Labor Party being largely in favour of the agreement. Questions are met with hysterical hyperbole from a government who sees any criticism or concern as an attack that must be shot down along with the questioner.

To be clear here, these are the exact words in the China–Australia Free Trade Agreement that the Coalition government has negotiated. They cover all Chinese nationals in the standard 457 visa program for skilled workers and “installers and servicers” of machinery and equipment on shorter-term 400 visas.

Paragraph 3 of Article 10.4: Grant of Temporary Entry states that Australia shall not:

  1. a) Impose or maintain any limitations on the total number of visas to be granted to natural persons of the other party: or
  2. b) Require labour-market testing, economic needs testing or other procedures of similar effect as a condition for temporary entry.

The Age gives a very good explanation of how Andrew Robb is misleading us.

If the China-Australia Free Trade Agreement is implemented as it stands, the Australian government will give up the right to require labour-market testing for all Chinese nationals sponsored for standard 457 visas and “installers and servicers” on 400 visas. It will also give up the right to put any cap on the number of 457 or 400 visas.

The government has negotiated two documents: one is the free trade agreement and the other is a memorandum of understanding concerning an Investment Facilitation Agreement (IFA) for infrastructure projects. The latter is not part of the free trade agreement.

The memorandum of understanding includes provisions similar to Labour’s Enterprise Migration Agreements, none of which were ever implemented. Under these provisions employers on mining construction mega-projects could sponsor semi-skilled foreign workers and skilled workers with lower English language than under the regular 457 visa regulations. These “concessional” 457 workers were additional to the standard skilled 457 workers on these projects.

The memorandum on IFAs accompanying the free trade agreement says the Australian government may require labour-market testing by direct employers on the infrastructure projects before hiring these concessional semi-skilled and skilled 457 visa workers.

In late July the government said all direct employers on IFA projects would have to undertake a version of “labour-market testing”, but only for the concessional Chinese 457 visa workers (not mainstream skilled 457s or 400 visa workers).

To reiterate then, under the free trade agreement, labour-market testing will not be required for Chinese nationals sponsored by Chinese or any other enterprise legally established in Australia for all mainstream 457 visas, and all 400 visas used by Chinese “installers and servicers”.

So, the only Chinese workers who would be labour-market tested are the concessional 457 visa workers on the infrastructure projects.  This is because the treaty provision takes precedence over Australian legislation.

The IFA also sets a very low bar for Chinese worker access to concessional 457 visas on infrastructure projects. The labour-market testing needed to access these visas is not rigorous, because it will allow employers to hire Chinese semi-skilled 457 workers up to 20 months after they stop advertising the jobs.

It seems to me that it is the unions who are telling us the truth here. The shroud of secrecy surrounding FTAs and the increasingly vitriolic abuse of anyone who dares raise a question indicates the government is the one with something to hide.

The government is the one who told us there would be no cuts to health or education or the ABC. They also said there would be no changes to the GST and that they would deliver the NDIS on schedule and in full.

Abbott is pinning his electioneering on “who do you trust”.

My immediate response is certainly not you!

 

Transfield shares go up and so does the debt

LABOR CRASHES THROUGH PREVIOUS DEBT LIMIT TOPPING QUARTER OF A TRILLION DOLLARS

October 12, 2012

Joint Media Statement: Andrew Robb and Joe Hockey

The Gillard Government has driven up Australia’s credit card to a record $256.4 billion according to latest Australian Office of Financial Management (AOFM) figures.

The previous debt ceiling of $250 billion was raised by Labor to $300 billion in the May budget further confirming its inability to curb its debt addiction.

Shadow Treasurer Joe Hockey, in a Liberal Party eNewsletter 27 July 2013, comments on the ALP’s “debt” TV commercial:

Kevin Rudd and Labor have increased Australia’s debt limit from $75 billion, to $200 billion, to $250 billion and now to $300 billion. The Treasury has told us that debt will hit $290 billion by Christmas, just $10 billion shy of the current legislated limit.

Only the Coalition will get the Budget back into the black, start to pay down Labor’s debt, and implement our economic Plan to grow the economy and create jobs.

Australians can’t afford another three years of Labor’s reckless spending.

Debt is certain to exceed $425 billion by Christmas

As at last Friday, 28 August 2015, gross government debt was $384.7 billion – the highest level ever recorded. This represents an increase of $111 billion from the level inherited by the Abbott government in September 2013. It is just as well Treasurer Joe Hockey scrapped the debt ceiling legislation early in the Abbott government’s term because he would now be having to introduce legislation to have the ceiling raised beyond $400 billion, a figure that will be exceeded before year end.

****************

With the gross debt increasing by over $1 billion per week under the Abbott government, we have seen funding slashed to health, education, Indigenous Affairs, countless NGOs and charities, the CSIRO, the ABC, the NBN, and many other crucial areas.

We have seen the superannuation guarantee rise put on hold and the low income co-contribution abandoned. I’m not sure if axing the schoolkids bonus has passed yet. Family Benefit, after being reduced, is now being dangled as a sweetener again. Getting rid of the carbon and mining taxes cost low income earners in various different ways. Thousands of public service jobs have gone, as have many more in manufacturing and mining

So what have we got for the increased spending?

Plenty of money for defence and national security.

Since its election, the Government has invested more than $22 billion in Defence capability projects. The Government will provide Defence with $31.9 billion in 2015–16 and $132.6 billion over the Forward Estimates. This is an increase of $9.9 billion over the Forward Estimates when compared to the 2014–15 Budget and represents record expenditure on Defence.

Apparently Border Force is to have 6,000 officers. Taxi drivers beware! Perhaps some of those retrenched public servants could apply, provided they are willing to wear a black uniform, take an oath, use force, and fire a gun.

And lots of money for offshore detention.

Transfield has been providing services on Nauru, which has 637 asylum seekers, since September 2012, and on Manus Island since early 2014. Its existing $2.2 billion contract with the Department of Immigration for both centres will expire on October 31. Despite the many incidents and reports criticising the running of the detention camps, Transfield has just been awarded a further five year contract. The announcement saw Transfield shares rise by 9%.

Tony Shepherd, the head of Abbott’s Commission of Audit, was chairman of Transfield and had spent over a decade on the board, quitting only in October 2013 to take up the job as Commissioner.

Mr Shepherd left with more than 200,000 Transfield shares, allocated to his family superannuation fund, on top of his final salary of $380,000.

In a move strikingly similar to Dyson Heydon judging himself, Treasurer Joe Hockey and Finance Minister Mathias Cormann left it up to the audit commissioners to rule on potential conflicts of interest among themselves.

Shepherd now heads the WestConnex Delivery Authority which will award contracts to build the proposed Sydney toll road, co-funded by the Abbott government. He is also a director of the international arm of Virgin Australia.

Not that I am suggesting anything untoward in this tight knit circle.

“Mates help each other, they do not tax each other.” – Tony Abbott, February 23, 2011.

 

Abbott’s Ever Diminishing Campaign Options

I read online Friday morning that Australian Border Force were planning to conduct visa checks across the Melbourne CBD starting the same day and continuing over the weekend.

I read that the ABF would be “positioned at various locations around the CBD” and they would be, “speaking with any individual we cross paths with.” They warned Melburnians to “be aware of the conditions of your visa; if you commit visa fraud you should know it’s only a matter of time before you’re caught out.”

At first I thought it was a piece of satire but on closer view I realised it was wasn’t. What on earth did it mean? I don’t have a visa so if I went into the city should I take my passport with me? If I’m accosted and don’t have any identification on me, will I be apprehended?

The messages were very clear. The ABF were up for interrogating anyone on the streets. I decided I would stay home. Then later in the afternoon I learned that, in a ‘William Wallace’ type twitter call to arms, the concerned citizen response was swift and united.

A crowd of several hundred complete with banners, megaphones and plenty of spirit converged on Flinders Street Station. To borrow the now immortal words of one of our favourite sons, the late Ted Whitten, they ‘ stuck it up them’.

It happened, I read, because the Twittersphere went viral.

policeOne can’t help feeling for the Victorian Police. A body the majority of Victorians view with the greatest of respect, was somehow blindsided, along with Yarra Trams, the Victorian Taxi Directorate and others, into playing ball with the Australian Border Force when the ABF had no real idea what they were doing.

As a result of the protest the entire exercise was cancelled and the blame game began. The MSM were in no doubt that the real culprit was Immigration Minister Peter Dutton. Whether he was or wasn’t became irrelevant when the broader reality dawned.

Up until yesterday national security was the only issue the Coalition had in their kit bag that they hadn’t already stuffed up in a monumental way.

‘Border Farce’ as it quickly became known, has taken care of that. While it’s anybody’s guess when the next election will be held, one gets the feeling that the government is fast running out of winnable strategies to take to the people.

National security was going to be front and centre. Having now missed that bus, one would think that all their efforts will be concentrated on the Trade Unions.

No, hang on, they stuffed that up too. Whether Dyson Heydon stays or goes won’t matter. His personal query directed to Bill Shorten that he was “concerned about his credibility as a witness” has sort of rebounded, quite spectacularly.

They can’t campaign on health, education or infrastructure without making people laugh. Nor on our reputation overseas which has gone from sound and steady, to mockery and derision.

Science and Technology are two more no-go zones for fear of the gasps that would come from an incredulous public. They could have a crack at renewable energy technologies but that would be a bit hypocritical.

peterThey will also have to be careful how they play the ‘economy’ card. If you juxtapose their record over the past two years with their rhetoric leading up to the 2013 election, it makes for a litany of confusion and contradictions reminiscent of Joh Bejelke Petersen’s days as Queensland premier in the 1970s.

When Joe Hockey said he would produce a budget surplus in his first year and each year thereafter, he unwittingly demonstrated how ill equipped he was for the job. We all know how that’s working for him now?

Both he and the Coalition are also seriously compromised on the ‘How are you going to pay for it’ wedge. Joe Hockey is presently unable to tell us how he would fund the intended tax cuts he so desperately wants before he reveals any other goodies he might be contemplating.

They can hardly campaign on their overall performance either because they haven’t done anything…oh wait..yes, they got rid of the carbon tax and the mining tax and stopped the boats.

In the meantime they doubled the budget deficit, added $1 billion to the national debt for each week they have been in government and broken so many promises that any promise they make this time around, will only be met with more fits of laughter.

If Tony Abbott is still at the helm when the election is called, it is difficult to see them mounting much of a campaign at all. If Scott Morrison is the new PM then the extreme right wing of the party will have shot themselves in the foot.

If it’s Malcolm Turnbull, there will be some hope but given everything else that has transpired, it is hard to see him restoring enough confidence back into their copper veins any more than Kevin Rudd did for Labor in 2013.

Turnbull’s performance with the cost blowout of the now second rate NBN has left him looking quite sheepish and vulnerable. He’s also a republican which won’t help. Then we have Julie Bishop who has never been seriously tested and, I think, would not cope with the pressure.

abfThey have, in fact, limited their options so severely that their only weapon will be fear. That might work but then again, they wouldn’t want to promote the ABF as the nation’s great protector.

Their last resort would be to try and convince the more gullible within the electorate into thinking that no matter how bad they are, the alternative will be so much worse.

Given how bad they have been themselves, that would really stretch the limits of our imagination, wouldn’t it.

The Republic debate is back: Is this Hockey’s ‘Marriage Equality’?

Joe Hockey – along with Peter FitzSimons (head of the Australian Republican Movement) and Labor Senator Katy Gallagher – announced today that they are putting the Republic back on the table for discussion. At a time when Hockey is struggling for popularity, and when even dangling tax cuts before people isn’t winning him any votes, a cynical person might wonder if this is Hockey’s attempt to get back behind a barrow that others will be happy to push along with him.

Don’t get me wrong – as I wrote recently, I’m as staunchly pro-republic as Abbott is a monarchist. And if Hockey is fair-dinkum about this, then more power to him. But just as I believe Marriage Equality has little chance of getting up while Abbott is prime minister, the same is true of a republic.

Let’s revisit what happened in the 90s

By way of context, here’s a quick summary of the key events around the vote for Australia to become a republic in the 1990s:

  • Support for Australia becoming a republic was strong in the 90s – as shown in the graph below. The green line represents the percentage of people who were for Australia becoming a republic, and the red line is people who were against it. Right up to the referendum, there was consistently a significant margin between those who were pro-republic and those who were against it.

PollsPriorToReferendum99

So how did the republican movement fail  – I hear you ask? Good question . . .

  • In 1993, Paul Keating created a ‘Republic Advisory Committee’ – which was chaired by then banker and lawyer, one Mr Malcolm Turnbull – to determine what changes would be needed to the constitution for Australia to become a republic. Which they did. Before they could start putting more detail behind these changes so that they could be put to a referendum however….
  • In 1996, John Howard – a confirmed monarchist – was elected Prime Minister on a reluctant platform of putting Australia becoming a republic to a referendum late in his first term.
  • In 1999 Howard successfully put the question of Australia becoming a republic to bed, for what turns out to be a good 16 years. He did this by tying Australia becoming a republic with a model which he knew was not popular with the Australian people. The republican model Howard put forward to be voted on would have replaced the Governor General with a President elected by politicians. (The more popular model – which had over 70% support – had the Australian public electing the President.)By doing this, Howard cleverly split the pro-republic movement so that those who favoured the more popular model actually told people to vote ‘no’ in the republic referendum, some mistakenly believing they would get a second go at a vote with their preferred model. But with Howard as Prime Minister, this was never going to happen.
  • The rest – as they say – is history. The vote for Australia to become a republic failed, with 55% of people voting against Australia becoming a republic.

(For a more detailed ouline of events, see my recent article on how Abbott is using the same ploy currently with marriage equality.)

Some 16 years later . . .

Back to 2015, and Joe Hockey is bringing up the republic debate again. Now, to be fair, he has always been in favour of a republic, this is not a change in position from him. But why now?

Certainly, if Hockey is serious about wanting a republic, he must know that it could never get up with Abbott as Prime Minister – John Howard proved that. And Abbott confirmed his willingness to play dirty in order to get his own way recently, by ‘branch stacking’ the party room on the discussion about marriage equality with Nationals.

Is this Hockey’s ‘marriage equality’ – something that he is a known supporter of that the public can get behind? Or does Hockey know that Abbott’s days are numbered – and therefore the time might be ripe now to bring up a key issue that actually could get across the line in the next parliamentary term?

Only time will tell.

Either way – as the French used to say ‘Bring on the Republic’ (Vive la République)!!!

(The flag design above – minus the words – was by John Joseph of Epping, NSW – see http://tinyurl.com/oqx963d)

This article was first published on Progressive Conversation

 

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