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John Kelly is 69, retired and lives in Melbourne. He holds a Bachelor of Communications degree majoring in Journalism and Media Relations. He is the author of four novels and one autobiography. He writes regularly for The Australian Independent Media Network and on his own blog site at: The View from my Garden covering a variety of social, religious and political issues.

Website: http://johnbkelly.wordpress.com

The Fallout from Wentworth

It takes a brave pundit to predict the outcome of the Wentworth bi-election just days before the votes are cast, but the actual outcome, either way, will be less interesting than the swing away from the government, the fallout from which, will be what determines its fate between now and next May.

A loss in Wentworth will mean the loss of the government’s one seat majority in the lower house. That, as proven by Julia Gillard, is manageable, depending on PM Scott Morrison’s negotiating skills.

Mind you, Scott Morrison is no Julia Gillard when it comes to securing passage of vital legislation through a hung parliament, but having said that, the government could survive a loss as it limped toward a May 2019 general election.

A narrow win in Wentworth, however, throws up a far more interesting situation. The government would retain its paper-thin majority, but at what cost to morale?

The ramifications of falling from what was a 17% comfort zone to a 2-3% nail-biting margin or thereabouts, is a frightening prospect for a party that has dozens of seats sitting on much smaller margins.

While a loss would precipitate a tremor of a most significant magnitude through the entire party, a narrow win would be just as scary, as various members are forced to consider their individual fates in a not-to-far-away general election environment.

For many, it would be the beginning of a downhill slide in confidence and poise from which they would be unlikely to recover. Morale would sink, blame would be apportioned, infighting would escalate and there would be very little effective governing of the nation going on.

One might envisage the press finally beginning to read the tea leaves and paying more attention to Bill Shorten and his highly visible team. Labor, in such a scenario, would begin to dominate the agenda. For the past two years, following their narrow election loss, Labor have barely put a foot wrong.

Various polls have had them as the preferred government for all that time. For the most part, they have been a model of discipline and attention to detail. They have been conspicuous in their policy development announcing well costed, highly detailed initiatives at regular intervals.

Doubtless the anti-Labor forces in the media would soon bear down upon them, spruiking doom and gloom for the nation as they continued to rant and rave, doing whatever they could to bring Bill Shorten to heel. But when you think about it, they have been doing that now for the past five years with little or no impact.

And they have done it because they have nothing to celebrate in their own camp, in the way of any Coalition government achievements. After five years, there is nothing of substance about which either they, or their government, could boast.

The Coalition is, and always has been, a policy vacuum. One suspects that the voters in the Wentworth bi-election have already worked that out and will effectively anoint them as lame ducks.

Let’s wait until Monday until we draw any definitive conclusions about the government’s fate, but the fallout from a loss or a narrow win, won’t give any of them any joy.

What Can the Prime Muppet Do?

For Scott Morrison and his Muppet Coalition Government, time is fast approaching the nervy end of an election cycle. So far, he has given us every indication that the next federal election will be held on Saturday 18th May 2019, the latest possible date he can leave it, but will he wait that long?

The result of the Wagga Wagga state by-election on Saturday was a disaster for the state liberal government and suggests a rough ride is in store for both state and federal members across New South Wales.

With that in mind, a number of questions will be running through the brains trust of the Liberal party machine right now. Would it be better to go early? Do they want their campaign to be riding through the dusty, unpredictable trail of the NSW state election in March?

Can they minimize the ongoing fallout from dumping the best leader they had, electorally speaking? Can they appear united? Have they a believable policy structure? Have they enough money to mount a competitive campaign? Do they have any quality candidates?

Looking at things from the outside, the answers to all those questions would appear to be a resounding, no! And the longer they wait, the fewer options they have. The Victorian State election to be held in late November is another hurdle to straddle.

Then comes Christmas, followed by the January holidays and the beginning of the school year. These are all periods where attracting the attention of the electorate is very difficult. There’s just too much going on.

Yet, that might be Morrison’s plan. The more the distraction, the less attention paid to important issues, the better their chances of not looking like idiots. Can Bill Shorten and Labor cut through those distractions and convince voters he, and Labor, are ready? In all likelihood, he may not have to.

After five years, we must wonder what Morrison has to sell that’s worth buying? Not much! Actually…….no, nothing. They have bluffed and lied their way through the most dysfunctional performance of this, or any previous conservative government.

Their internal bloodletting has been on public view ever since Malcolm Turnbull succeeded Tony Abbott as PM. Actually, it’s much longer than that.

So what can Morrison, the self-described muppet leader do? Current polling indicates his muppet coalition will lose government in a landslide. But, if he waited until May, could he reverse that?

Could he get some lipstick on his pigs?

One would have thought that trying to be heard across a minefield of distractions would be difficult enough. Expecting to come up with some jaw-dropping, knockout initiatives and reverse current polling trends, might just be a bridge too far.

And what of Morrison’s own legacy? The thought of lasting even less time as PM than Tony Abbott must be haunting him at the moment. Would he want to continue his parliamentary career as Opposition leader? One suspects he would. And he might also be thinking, the sooner the better.

Morrison’s best chance is to go before the end of 2018. Firstly, he can salvage some respect by relieving the voters of any more pain. But also, he can quite rightly, blame the loss, not on his leadership, but on the appalling behaviour of his party prior to him becoming PM.

This gives him a launching pad to begin rebuilding the shattered skeleton of a party, that was once a government. Mind you, his own record as treasurer will bring him some pain as Labor restores some of the heartless, unnecessary spending cuts he championed against the easiest of targets, the most vulnerable.

But, perhaps that’s a challenge he might find more appealing, rather than the humiliation that will await him, should he choose to wait until May next year.

Let’s hope so.

So, the boats haven’t been stopped after all.

Who would have thought? An illegal vessel has made it to the Australian mainland. After all the boasting, the chest beating and bragging by the architects of the most brutal and repressive asylum seeker policy our country has ever implemented, it turns out that on at least one occasion, they have been gamed.

Their politically motivated action against defenceless asylum seekers attempting to find a better life has fallen on its face. Our once impregnable borders, policed so rigidly by the Australian Border Force, have been breached.

“You have to wonder how a boat like this would get so far without being detected,” Port Douglas Marine Rescue president Ross Wood said. Indeed! But should we be surprised? The distance between the southernmost point of Papua New Guinea and the Australian mainland is just 150 kilometres.

How long did it take Australian Border Force management to realise that people smugglers would eventually find a way to make the relative easy crossing?

While details are still sketchy and probably will stay that way if Home Affairs minister Peter Dutton has anything to do with it, perhaps seventeen or more asylum seekers have made it to Australia. How embarrassing!  A dozen or so have since been rounded up, but the remainder, now at large, may well be in even greater danger hiding in the mangroves and rainforest regions of the Daintree.

“There is no risk if they don’t go in the water. But if they aren’t familiar with the area, if they go in the water behind the beach where the river is or to stand on the edge of the deep water where it’s murky, there is a risk of a crocodile attack,” said tour operator David White, who has been taking people up the Daintree River for 20 years.

While concern for their safety should be paramount, politically, it is a disaster for the government. No longer can we accept the Coalition mantra, “we’ve stopped the boats.” It’s no longer true, if it ever was. And what do we do with them, now

Manus is closed. Nauru perhaps? Christmas Island? What are our international obligations when asylum seekers land on our shores? Stupid question! No one cares. We can send them anywhere we want. Who will stop us?

Doubtless, people in Far North Queensland will be horrified. They will fear for their safety, lock their windows and doors, keep their children home from school, even barricade their driveways. So they should! Monsters are on the loose, heathens who could murder them in their beds at night.

After the appalling events in Canberra last week, one cannot help but feel some sense of amusement at this latest event. The implications for a government that might, just might, have had one claim to fame in its miserable time in charge, has been destroyed. Now, they have precisely nothing to crow about.

With three prime ministers in five chaotic years, no vision for the nation’s future, no idea what they stand for, internal bitterness and disunity that dwarfs anything we have seen in three generations of politics, they have now had their signature tune blown out of the water.

 

It’s not a government. It’s a circus.

Is Scott Morrison really on our side?

Nothing sounds more hollow than a statement in need of some truth. As an opening salvo from a pretend new leader, it was an insult to our intelligence.

If the revolving door of leadership in the Liberal party has demonstrated anything, it is that their loyalty and dedication to serving the people has never been very high on their list of things to do. If it was ever there in the first place.

For our newest prime minister to feel the need to say that he is on our side, infers that he was concerned that we might think otherwise.
Why on earth would we think that our elected government was not on our side? Perhaps because it wasn’t? It isn’t?

If you woke up this morning thinking that you had just emerged from a nightmare of near inescapable despair, be assured you were not alone.

This excruciatingly, agonising charade of a mortally wounded government still has some life in it, albeit devoid of oxygen. The Hillsong happy-clapper’s, ‘I’m on your side’ gasp, was a plea for mercy; a mea culpa, an apology for his party’s appalling behaviour; an internal blood-letting vendetta that has made the Rudd/Gillard/Rudd episode look like a vicarage tea party.

What has Scott Morrison ever done that might lead us to think that he is on our side?

This hard-right conservative disguised as a moderate, who won the nation’s top job, not because he was the best candidate, but because he was less hated than the others, has presided over the most disproportionate allocation of public funding since Harold Holt was treasurer in the early 1960s.

Never have we seen a treasurer demonstrate such blatant disregard for public need in favour of corporate excess, as Morrison.
Our only positive hope is that his tenure will be short-lived. His time as prime minister will, more than likely, be shorter than that of Tony Abbott.

No doubt polling will take place over the weekend to gauge public reaction to what has been the most disgraceful week of Liberal party acrimony, in living memory.

But regardless, the next six months will just be more of the same, with the defeated continuing to plot, with more recriminations, more bloodletting, more destabilising activity.

The ‘I’m on your side’ mantra will soon fade from Morrison’s mind as he tries to hide the ongoing war inside his disintegrating party.

Don’t wait for the next challenge, Malcolm. Call an election now!

It would be safe to say that, as a prime minister, Malcolm Turnbull has been a disappointment. Displacing Tony Abbott, as he did in 2015, was supposed to be a new start, correcting the bizarre image of a bumbling, buffoon leading the country.

That’s how it was supposed to be.

Malcolm was seen as a move to a more statesman-like candidate, one who would not embarrass us either here or overseas. We had every right to expect, not just a more polished, professional approach to government and recognition of much needed social reform, but also a more mature approach to tackling the issues of climate change and energy.

The one social reform he did give us was same-sex marriage, but its execution was akin to extracting teeth while simultaneously amputating a limb after the patient had woken from the anaesthetic and fallen off the operating table. In other words, it was a horrible, bloody mess.

Since then, Malcolm has failed miserably in achieving anything of note during his three-year reign. He had an opportunity to be the man to drag the Liberal party out of the 19th century and effectively blur the line between Liberal and Labor party policies.

He could have been so effective, that Labor would have struggled to display its more socially-minded platform. He could even have surpassed John Howard’s tenure as prime minister.

So what went wrong?

For some inexplicable reason, Turnbull, in many ways a leftist, chose to be a prisoner of his party’s hard right. This hard right conservative element, led by Tony Abbott, operates in tandem with the highly sinister, clandestine group known as the Institute of Public Affairs (IPA).

It is so committed to turning back the clock, socially, industrially and religiously, it has lost sight of the principles that gave its party’s founder, Sir Robert Menzies, the legacy he enjoys today.

And Malcolm Turnbull has done its bidding from day one. As the saying goes, “if you lie down with dogs, you get up with fleas.” There should be another saying that explains how, if you don’t cleanse yourself of fleas, even the dogs will desert you.

That’s what is happening to Malcolm now. By sucking up to the hard right he has had to compromise his own belief system and forsake any chance he had of being a great prime minister.

In return, his party have demonstrated their contempt for him, time and time again. They have bullied him from post to post. A drover’s dog could have told him it was never going to end well.

So why would he reward them any further by continuing to lead them? Would he not be well justified in calling an election now and allowing the people to decide if they want this charade to continue? Isn’t that the way bullies should be treated?

Would this not be a way to repay the Liberal party for their treatment of him; reduce their tenure from three years to just two and let that reality sink into their dim-witted brain cells? After all, he has nothing to look forward to, beyond another challenge to his leadership.

Yes, he will lose the election, but would that not be the more honourable thing, rather than sitting around waiting for the next challenge?

Cut your losses, Malcolm. Isn’t that what bankers do?

MORTGAGE STRESS! MAKING ENDS MEET

When I bought my first home back in 1973, Australians were being advised not to pay more than 25% of their net income on their mortgage.

It was sound advice and one, even the banks used, to calculate whether the mortgagee would be able to meet the quarterly repayments. As a further rear guard action, banks would only loan up to 75% of the property valuation.

Back then, your local bank manager actually cared about your future ability to meet your commitments when interest rates were similar to today’s rates, at around 6%. But that is where any similarities, between then and now, end.

Today, homebuyers are paying an average 30% of their mortgage. It is symbolic of changing attitudes that work in favour of the banks, mortgage brokers and property developers. But not the mortgagee. Many mortgagees are paying over 50% of their net income on their repayments.

Today, they are clinging precariously to a tightrope, swaying in the wind. With wages stubbornly static and prices creeping up by stealth, the broader Australian mortgage belt is showing signs of stress.

The Household Financial Comfort survey of 1500 households in June, conducted by ME Bank shows that the average Australian is now eating into their savings to meet their weekly commitments.

“The report revealed housing stress is still prevalent among Australian households. For those with home loans, a broadly unchanged 45% of households reported to be contributing more than 30% of their disposable income towards mortgages during the past six months – a common indicator of financial stress.”

This is a matter of serious concern for the nation as a whole and especially for the Reserve Bank. It is household debt, not national debt, that has the capacity to bring our nation’s economy to its knees.

The report tells us that 10% of households are now spending more than they earn. That means they are either digging in to their savings and/or further increasing household debt (borrowing more).

So, here we are, listening to all this rubbish about jobs and growth, balancing the budget, a future return to surplus and other such meaningless policy directives, while ignoring the one issue that has the potential to undermine the entire economy, literally overnight.

We all saw how quickly the collapse of Lehman Bros set a cat among the pigeons on Wall Street in 2008. We have seen here in Australia how, despite the recent levels of jobs growth, unemployment and underemployment have not moved to any greater or lesser degree.

Our economy has been growing over the past two years on the back of immigration and deficit spending, not balanced budgeting or surpluses. We are now a country of 25 million, up 2 million since 2013. It is that increase that has kept us in growth nationally.

The Household Financial Comfort survey is now telling us that our national growth is masking a serious problem, that of over-extended household debt, a debt that is becoming increasingly harder to manage.

Reserve Bank Governor, Philip Lowe has expressed his concern about the slow pace of wage growth and its impact on economic activity.

Is the government listening? It would appear not. Their approach is to give tax cuts to big business while ignoring rising household debt.

What happens when the savings run out and credit cards have reached their limits? That day isn’t far away. It will require a massive injection of government spending to avoid a catastrophic collapse, one that would have a far more significant impact on the Australian economy than that of the GFC.

It’s one of those hidden dangers that only rears its head when it’s too late. The government is under the illusion that all will be well if we lower the tax rate for big business, because it will create more jobs. What hogwash!

Where are the economists’ warnings? Who is advising this compromised government indebted to its masters at the IPA and ignoring CEO pay binges? Who is warning of an impending mortgage meltdown?

For all those frogs in the saucepan, the temperature is rising.

Like Spoilt Little Brats

It was not paranoia, it was real. The past three weeks saw our supposed free press, our once proud doyens of truth and justice forsake their role and barrage us with a one-sided attack on Bill Shorten, in a manner not seen since their failed attempt to hang draw and quarter him during the Trade Union Royal Commission.

What spoilt little brats, they are!.

We can only speculate on what drove them to try and make Super Saturday Shorten’s funeral, but just like the Royal Commission, it failed.

Super Saturday was an opportunity for the media to scrutinise a government in disarray, to anticipate the result as a measure of considerable broader electoral discontent. But instead, they chose to personalise and vilify the alternative prime minister, make it a test of his credentials, rather than call a dishonest, deceptive, unfair government to account.

Not a clever move as things turned out. All the speculation about the possibility of Labor losing Longman and Braddon was used, once more, to mask the Turnbull government’s lack of performance, lack of policy, lack of vision and lack of true leadership.

All the speculation about Shorten’s leadership, about his poor preferred prime minister ratings, about his trade union connections, seemingly orchestrated across all the various media platforms, seemed too concentrated to be coincidental. Someone was directing it.

What was promised? By whom? How much? And how soon?

For whatever reason, the media had climbed into bed with the Conservatives to convince what they thought was a small and gullible voting block, to rewrite history. Shorten was even lambasted for not turning up to either electorate the day before the election. As if that was the last straw.

So what now? Their campaign failed, not marginally, not barely, it failed spectacularly. The voters from Queensland and Tasmania brought the media back to reality. It was the electorate who would decide who would represent them and the size of the margin they would extend to their elected choice.

They ignored the media, they saw through the shallow, thinly veiled attempt to concentrate on the opposition and instead, sent an unmistakeable message to the government: you have not been honest with us, you have not been fair, you favour the wealthy, despise the weak, the sick, the disadvantaged. For this, you will pay.

They have put Longman and Braddon back in the Labor camp. They have seen to it that Bill Shorten’s leadership is no more to be questioned, that the preferred prime minister polling is irrelevant and that Australian voters will not be hoodwinked when we go to a general election sometime in the next ten months.

It can’t come quick enough. So let’s see where the media apply the pressure now. They have been put back in their place well and truly by their true masters. Like spoilt little brats, they have been given a good spanking. They put their money on the wrong horse and now, go home with empty pockets.

What a miserable lot they are. Serves them right!

WEALTH AND POWER KEEP ON WINNING

As a committed advocate of Modern Monetary Theory and one who thinks it should be renamed, Modern Monetary System, for reasons I will explain, there have been occasions when I have felt a sense of futility, trying to explain something so simple, but finding myself unable to convince even those who should know better.

Firstly, MMT should be referred to as MMS because it is no longer a theory. It is the way our fiat economy was set up to operate and does operate today. Its implementation took place in 1983 and the fact that it has never been used as it was intended, does not mean it is theoretical.

The fact that we still fear deficit spending, strive to balance budgets, lust for surpluses and consider bond issues as debt, is a hangover from a past era, that of the gold standard.

The fact that we fail to fully utilise our available resources, consider 5% unemployment near full employment, shy away from providing the necessary infrastructure for our industries and neglect our national health and education needs, when each of these represents real jobs and growth opportunities, is a travesty of mismanagement and failed leadership.

Last night’s Q&A which highlighted the difficulties experienced by those reliant on the NDIS, gave us a clear indicator that the government is not even spending its own budget allocation on this vital piece of infrastructure. The NBN rollout is just another example of this failed leadership.

And it seems that no matter how clear and concise we are in explaining the economic reality of MMT, successive governments still cling to the gold standard mindset. Why?

Michael Pascoe’s article in ‘The New Daily’ today, sheds some light on the truth of the matter. In discussing the latest on the never-ending tax debate, something the entire country is heartily sick of hearing, he points to what the government is really doing in pursuing this matter.

He writes, “In the short term, it’s a formula in keeping with the Institute of Public Affairs’ prescription for a new Australia – an Australia with less government, richer rich and fewer controls on markets – especially the labour market.”

He goes on to say, “The IPA has emerged as not just the favoured right-wing think tank, but the government’s guiding light. It is too tempting to not again repeat one of John Kenneth Galbraith’s many golden quotes:
“The modern conservative is engaged in one of man’s oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness.””

We have known from the beginning of the Howard years, and perhaps from some of Paul Keating’s decisions, that it is the rich who run the country. They run it for the rich and they get the best results by supporting conservative leaning parties and their politicians.

Trying to establish a tax system, using confected figures to present fairness and equality, as Scott Morrison has done suggesting average workers are expected to earn six figure sums in a few years’ time, displays a height of arrogance as bold as his government’s self-serving aspirations.

It is a disgrace. But, we know that if you tell a lie, big enough and often enough, people who don’t know any better, will be inclined to believe it. And therein lies the difficulty with people like me who are trying to explain MMT to the average person in the street. How could anything so simple be right. It must be more complicated than that, surely. No, actually it isn’t.

As Michael Pascoe says so eloquently in his article, “In the longer term, flattening our progressive tax system is a tiny part of one of history’s repeating cycles: wealth and power being used to entrench and extend wealth and power until it becomes unsupportable.”

Notwithstanding the difficulties of explaining MMT, there is progress. But it is painfully slow. Much like the NBN. However, one day we will get there, even if it is only a partial implementation. The alternative is the status quo, which, for those who haven’t yet worked it out, is all about keeping the average worker at arm’s length from the rich.

And that really is an unsustainable option.

Are You Feeling Lucky, Malcolm?

My question is directed to the Prime Minister. Your treasurer has just brought down your 2018/19 budget laced with tax cuts to woo the low paid. Some of it will be delivered in a year’s time when everyone files their tax return. The rest over the next seven years.

You have your party’s future in mind and, dare we suggest, your own with this budget. You have been telling everyone that the next general election will be held a year from now, while quietly contemplating the likelihood of going early, perhaps September or October this year.

Suddenly though, there’s a new issue on the horizon, courtesy of the High Court. It comes in the form of five bi-elections. What are you to do? Should you go ahead with the five bi-elections knowing secretly, that those same seats will/might/could be recontested in as little as three months?

If you were to lose all five, which is probable, how would that play with your colleagues and their view of your leadership? What if your support group panics and decides to tap you on the shoulder in the interests of their own self-preservation?

Which would you rather: face them on a cold, dark Canberra night, or place yourself at the mercy of the people? Is it possible those tax cuts, as pitiful as they are, could swing enough voters in marginal seats?

Watching some of the post budget interviews given by Scott Morrison as he began his big sell, one could be forgiven for thinking he really believes all the rhetoric he espouses.

His/your budget has revealed a seductive set of numbers that might fool the person in the street, although, when one compares your generosity with that of Bill Shorten’s, you could be found wanting. You also know that it’s all based on some pretty ambitious forecasts.

Except for a flush of extra cash generated by new tax-paying migrants, the numbers would have painted a very different picture. But, as usual, the party’s conservative ideology continues to reign supreme: Give the biggest share to the wealthiest. Your party does it every time.

How long will it take for the electorate to realise they have been duped….again?

Then, there’s that looming re-distribution. Could you call a general election before that wretchedly unfair re-adjustment of the boundaries is finalised? Once that goes, you know you’re stuffed.

What are you to do? Might it be, that the best course of action, is to call a general election now, rather than proceed with the five bi-elections? It will certainly save a lot of money, not to mention the embarrassment of losing all five.

We know the people don’t like early elections, but this is different. It’s all Labor’s fault when you think about it, Bill Shorten has a bit of egg on his face after boasting that no Labor member was holding dual citizenship. Can you exploit that?

Surely your spin doctors can come up with something to explain why going early this time, has been unfairly thrust upon you and calling a general election, rather than five bi-elections, will save the tax payer millions of dollars?

But the polls, those wretched polls. People believe them. People are influenced by them. What are you to do? Perhaps you would prefer the verdict of the people rather than the party room. Gallant in defeat, something like that? History might be kinder to you, if not your party.

Perhaps you can muster all your charisma, your preferred popularity and go head to head with the guy that ripped all the goodness out of your budget in his reply speech. Let’s face it, no one else in your party could.

SO, ARE YOU FEELING LUCKY, MALCOLM?

Expect some Rubbery Figures in the Budget

It is perhaps a tad unwise to try and second guess the budget to be handed down next Tuesday, but some things need to be made clear, especially to those who might be fooled by what is expected to be a pre-election handout.

Regardless of how Treasurer Scott Morrison might try to sugar-quote the numbers with his breathtaking rhetoric, be assured at least some of his forward projections will be based, not on hard numbers, but more likely, on aspirational and ambitious expectations.

In other words, it’s going to be a budget fit for purpose, but not the national purpose. We can expect some rubbery forward projections that will pave the way for some pretty ambitious outcomes that his party can spruik as we head toward the election, later this year.

The ever-optimistic Morrison who foolishly convinced himself that a return to surplus was only two years away, might be of a mind to project a surplus as soon as next year. If he does, don’t believe a word of it.

He has the figure of 23.9% of GDP in mind as the maximum amount he can receive in tax (it’s a Liberal party yardstick). BUT, should we be watchful of what GDP figure is he basing his projections on? Yes we should. Expect a rosy one. If he can inflate the expected GDP for 2018/19, he can spend a little more and still show a reduction in the projected deficit.

That’s what creating rubbery figures is all about. And if he creates enough rubber in 2018/19, to show a reduced deficit, that makes creating rubber for 2019/20 and the subsequent forward estimates that much easier.

Hence, the temptation to project a small surplus in 2019/20, one year ahead of previous estimates. Again, if he does, don’t believe a word of it. There’s no good reason why the figure of 23.9% needs to be adhered to. Most OECD countries have higher levels than that.

But, 23.9% is dogmatically enshrined into the psychology of Liberal minds. So, if Morrison wants to spend more as he searches for election sweeteners, all he has to do is increase his estimate of what the expected GDP for 2018/19 will be and still appear economically responsible.

From there, he can estimate a higher tax take and a lower deficit. Simple. After all, it’s just numbers in a computer and they can be changed down the line as circumstances require.

So don’t be fooled by whatever comes out of Morrison’s mouth on Tuesday. In fact, the rosier it looks, the less likely it is, that it will be true.

It is unfortunate that Morrison seems to think that running a national economy is the same as running a household. It is not. A currency issuing government is only constrained in its spending by the available resources. It’s “debt”, issued in its own currency, can always be repaid.

No one will be knocking on the government’s door to repossess anything. Sadly, Morrison does not understand this, and neither does his government. He should, however, be concerned about private debt. That is the great threat to the Australian economy, not magical numbers expressed as a percentage of GDP.

It is private debt that threatens to bring the country down. RBA chief, Phillip Lowe knows this and has said as much. But Morrison is not looking at private debt. He has a fixation with government debt.

As the currency issuer, the government can safely spend 100% of its GDP without the fear of inflation so long as that spending leads to productive outcomes. And, it never needs to borrow.

Borrowing, via the issuance of bonds is a political choice, not an economic one. It’s high time economists started stating these simple facts, rather than the emotion-charged, political claptrap they sprout forth now.

They won’t, of course. They will fall into line and spread the gospel according to their media owners, who just happen to believe in the household economy myth.

Morrison will talk a lot about that on Tuesday night.

Get ready! An early election is coming

Get ready! We are 4 months out from a federal election. It’s not the polling that has determined this will happen, it’s the roadblock ahead.

Between the 4th August this year, the earliest an election can be called and the 19th May next year, the latest, there is a minefield of events that the Coalition will not want to compete with, in its attempts to stay in power.

The most difficult are the Victorian state election in November and the NSW state election in March 2018. Throw in the AFL and NRL football finals in late September/early October, Christmas, School holidays and Easter and it’s obvious.

Politically speaking, this August or early September is the only clear-air time realistically available for the government to try to redeem itself.

And the first opportunity for redemption will be the May budget, next week. Already, the signs are that it will be as generous as it can be for a government that realises it needs redemption.

The promise of tax cuts resulting from higher company tax revenue, a higher job participation rate, the abandonment of the Medicare levy hike, all indicate the government has already locked in a date with destiny.

They will be able to spruik a lower than expected deficit and a better than projected surplus in 2020/21. They will tell us that the economy is strong (it isn’t), that business is investing ((they aren’t), that they stopped the boats (actually we don’t know) and that Labor will be soft on immigration (simply not true).

They will tell us that without them in charge, the economy will collapse, that our international relations with the USA will be damaged, that Indonesia will invade us, that the sky will fall in, that God has chosen them to rule.

These are the credentials they will present to us over the coming months. This is what they believe will save them. Never mind their incompetent handling of the Banking Royal Commission or their massive accumulation of what is wrongly referred to, as the national debt.

Never mind the absence of meaningful policies, their internal squabbling, the Abbott factor, the Joyce factor, the Cash factor, their broken promises, the savage spending cuts that have devastated community groups across the country, the NBN debacle, the shameful inaction when dealing with Manus Island detainees, never mind all that and more.

They realise too, that the planned electoral redistribution, which does not favour the Coalition, may not be finalised in time for an early poll. That redistribution renders two liberal seats notionally Labor and several others marginal.

Labor, in the meantime, have not been asleep at the wheel. They realised an early election was probable a year ago and have been on an election footing for some months.

Their recent policy announcements on franking credits, no company tax cuts, removing the GST on tampons, the establishment of a federal ICAC, all point to a party ready to go to the people.

The election battle will be a tale of two parallel approaches. Labor will concentrate on micro issues, that of household debt, housing affordability, wages, the cost of living and equality, while the Coalition will present the broader picture of company profits, employment growth and projected budget surpluses and union thuggery.

From the Coalition’s point of view, the rhetoric will be mind-blowing, perhaps overwhelming. In the absence of a policy framework, they will be relentlessly attacking Labor, saying anything to mask their deception and their ignorance.

They will try to scare the bejesus out of us. The truth of it, however, will be easy to discern. They will say, “judge us on what we say, not on what we do,” a clear indication that they are a policy vacuum.

Without a proper policy framework, the coalition are always reactionary. Labor, on the other hand, will demonstrate how proper economic management should be, when fit for purpose. Malcolm Turnbull is also conscious of the possibility of a leadership challenge before the end of the year, courtesy of a slip of the tongue by Barnaby Joyce.

They are a desperate rabble and determined to stay in power. However, it will be up to us to decide and that will happen either in late August or early September,

The Hypocrisy is Mind-Blowing

It’s hard to recall the last time we saw Barrie Cassidy take a blowtorch to a government minister on Insiders, but that’s what happened this morning.

And it was obvious that his target, Kelly O Dwyer, never saw it coming, either.

The first thought that came to mind while watching the interview was, can you believe the hypocrisy? After calling Bill Shorten’s announcement in 2016 that Labor would set up a royal commission into the financial services industry, reckless and ill-conceived, very dangerous, and bad for the economy, here she was trying to take credit for this week’s revelations.

As hard as she tried to put a positive spin on the government’s belated decision to establish a Royal Commission, she was unable to withstand the blistering onslaught she experienced with Cassidy.

His grilling of her was a true reflection of current public sentiment. The hypocrisy from the government has been mind-boggling given that her party never wanted a Royal Commission. It only backflipped after being dragged into line, kicking and screaming, by members of the National Party who threatened to cross the floor in their determination to get one.

While trying to gain some credit for her government setting up the Commission, O Dwyer refused to address questions concerning her criticisms of Labor’s election promise in 2016.

In trying to defend the indefensible, she struggled to cut through with anything that was remotely beneficial to her party’s credibility. If anything, it highlighted what a nasty piece of work they are.

Everything she said, stood in stark contrast to her party’s persistent opposition to it, for so long. Meanwhile, revelations during last week’s hearings that customers were given poor financial advice, were charged fees for no service, that a dead person was charged ongoing fees, that the corporate watchdog was deliberately misled for years, makes us salivate over what might be revealed when things resume next week.

Client theft, more compromised financial advice, financially ruining peoples’ lives; who knows what other surprises are in store.

This government’s actions in cutting funding to a multitude of community services shows us only too well, how concerned it is for the welfare of its constituents.

So, for Kelly O Dwyer to try and convince us that her government’s first concern was for consumers, beggars belief. It was simply a bridge too far, particularly considering their 2014 attempts to water down ethical constraints on financial advisers introduced by the Gillard government.

Thankfully, that attempt was blocked by the senate with the help of Nick Xenophon, Jacqui Lambie, John Madigan and Ricky Muir. Unsurprisingly, it was the major banks that led the campaign for the Federal Government to roll back parts of Labor’s Future of Financial Advice laws (FOFA).

The hypocrisy endemic in this government, is such that it reinforces our ongoing contempt for their political manoeuvring, point-scoring and protection of favoured interests, all of which comes at the expense of governing for the people.

A federal election cannot come quickly enough.

Why a Universal Basic Income is a very bad idea

It is difficult to understand how an intelligent, highly trained man like Richard Di Natale could seriously suggest that Australia should introduce a Universal Basic Income.

It was even more surprising to hear channel 10 television host, Waleed Ali give some credence to the idea on The Project, last night, suggesting it was “no lefto pinky nonsense”.

Natale made his announcement at the National Press Club luncheon this week. For those unsure of it, a UBI is a basic, liveable payment to all citizens without any conditions attached.

Economists tell us it could replace all government spending on welfare, as well as housing, health and education. Even if that were true (it isn’t), it would still be a very bad idea.

According to Professor Bill Mitchell, a UBI is nothing more than, “a scam to absolve the government from its responsibility to create full employment.”

An article by Chris Hedges (April 1, 2018) – The Oligarchs’ ‘Guaranteed Basic Income’ Scam – published by Truthdig explains very succinctly, the purpose behind the recent push for a UBI.
He says:
“A number of the reigning oligarchs … are calling for a guaranteed basic income. It looks progressive. They couch their proposals in the moral language of caring for the destitute and the less fortunate. But behind this is the stark awareness, especially in Silicon Valley, that the world these oligarchs have helped create is so lopsided that future consumers, plagued by job insecurity, substandard wages, automation and crippling debt peonage, will be unable to pay for the products and services offered by the big corporations.”

We are being told that we are on the precipice of a technological revolution where robots are being assembled as we speak, to take over 40% of existing jobs. Never mind that those robots will still require human management.

Never mind also that the computer revolution that began 40 years ago was also going to put most of the workforce out of a job. It’s a familiar projection of future trends that keeps us both enthralled and intimidated at the same time.

A UBI would be another win for the top end of town. They are concerned that the downside of the technological revolution is that no one will be able to afford their products in the future. They are positioning themselves to put pressure on governments to spend money for no return, just to keep them in business.

The result is, the rich would continue to get richer as the poorer continued to be the victim. Paying people to do nothing, is as silly as it sounds. It is, as Bill Mitchell says, “a neo-liberal strategy for serfdom without the work.”

“Business leaders want to avoid attacks on their power as they kill off jobs in swathes. But they also will continue to work out ways to maintain control over workers and what better way than dishing out a little consumption bundle and keeping them out of the workplace,” he says.

A UBI would create a society where people become mere consumption units, where the demand for labour goes into decline, wages and conditions suffer and the inequality balance shifts even further in favour of capital.

National GDP levels would fall as people opting not to work, lowered their expectations and their living standards, forcing production rates to spiral downwards, prices to rise, inflation to run amuck and the only winners are guess who?

Little wonder business CEOs support the principle. It would mean more money for them, less overhead and bigger profits. This is not the society we want for the future, it’s the society from which we have been escaping these last 100 years.

If our business leaders were truly keen to care for the destitute and the less fortunate, they would support a job guarantee where the government provided a job for everyone who wanted work but were unable to find it.

A job guarantee would ensure a pool of workers ready to join the mainstream workforce when the economy was in recovery, help maintain production levels, increase taxation revenues and overall GDP.

Strangely sinister, is it not, that the wrong message, sugar-coated to appear electorally popular, is always the one that seems to get the most media attention, while the more beneficial option, the one that best serves the interests of the majority, languishes in the “it won’t work” basket.

Shorten smells blood

Bill Shorten can smell blood and is becoming bolder by the week. His announcement last week that the cash payments tied to the dividend imputation scheme would end, was just the beginning.

He is becoming more prime ministerial in his approach, made easier by a government  in disarray. The 29th Newspoll showing an increase in primary support for Labor must have sent a chill down the backs of several Coalition members.

Shorten’s boldness was reaffirmed this week, firstly by announcing a tweak to the dividend imputation policy, exempting full and part pensioners. It wasn’t necessary, but it blunts any scare campaign that might be aimed at it.

Then, he announced Labor’s intention to repeal any legislation that gives our corporations a tax reduction. Another bold move, but one clearly consistent with Labor’s continued opposition to the legislation.

Whether this initiative influenced two cross-bench senators not to support the legislation thus far, is difficult to say. But the prospect of the tax cuts being included in this year’s budget looks unlikely.

It is hard to reconcile what the conservatives were thinking, given the severity of spending cuts that have hit hard at individuals and community groups who have lost their funding for social programs and health groups no longer able to extend vital community support assistance.

The government will try to paint Labor as anti-business but as far as the electorate is concerned, that train left the station months ago, as people began to absorb the reality that most of our major corporations don’t even pay tax.

With the polls showing the two-party preferred vote 53% to 47% in Labor’s favour, Malcolm Turnbull will want to delay the next election for as long as he can.

That would mean May 2019 as the date, but if he chooses that option, there are three significant roadblocks to manage; the Victorian State election in November this year, the NSW state election in March next year and the 2019 May budget.

It means that any budget sweeteners planned this year will be long forgotten, with no time to prepare for next year. All of which points to an August/September 2018 election.

Whether Labor planned an election strategy on the grassy knoll of inequality or not, that’s what will take place. A clear “us versus them” battle line.

Malcolm Turnbull can continue to boast 400,000+ jobs created this year, but the unemployment level both in percentages and raw numbers is the same as it was in 2013.

Those new job have done no more than keep pace with population growth, a natural occurrence in any economy. All of which means that in five years of government, their jobs and growth mantra is as hollow as their concern for equality.

Those who remember the months leading up to the 1972 election that saw Gough Whitlam become prime minister might see some similarities emerging. A stagnant economy, a government bleeding from within and an expectation that their time was over.

Shorten draws a line in the sand

Bill Shorten and the Labor party are beginning to demonstrate true grit. The latest policy announcement that will see an end to a welfare handout to the rich, otherwise known as the Dividend Imputation Scheme M2, is a masterstroke.

The dividend imputation scheme enables salary earners who own shares to minimise their tax liabilities with franking credits. However, where a person has a very low income those franking credits not only mean they pay no tax, but they result in non-taxpayers being owed money by the ATO.

Yes, it will hit some part-pensioners, perhaps as much as $4800 a year but, as they weren’t paying any tax, it was only acting as a supplement to their pension payment anyway. Its cancellation will result in them receiving a larger pension payment.

They will likely be no worse off, or minimally out of pocket. But for those who have large shareholdings and have used John Howard’s overly generous system to firstly, pay no tax, and then receive a cash handout each year from the ATO, effectively working the initiative in a way Paul Keating never intended, their days of sponging off the system are coming to an end.

This is just another example of the Howard era’s middle-class welfare that has reached its use-by date. We can place this in the same basket as capital gains tax breaks and negative gearing concessions that are wasted on the wealthy and which offer no benefit to our economy.

This May, Scott Morrison will deliver the last budget before the next federal election and it is not surprising he has been talking up the possibility of personal income tax cuts. So it wasn’t surprising then, when Bill Shorten made his announcement, that Morrison immediately began a scare campaign trying to frighten pensioners into thinking they will lose their imputation credits. They won’t.

They will only lose the amount over and above the point where they stop paying tax. And that will likely mean they receive a higher pension payment as compensation. As if to counter Morrison’s plan, Shorten has demonstrated that Labor can also offer tax cuts and he is showing us how they will pay for them.

And just so we get it straight, the amendment to Paul Keating’s original scheme was one of several measures introduced by Peter Costello in the early 2000s, that was introduced on the back of the mining boom and which was nothing more than a vote-buying exercise.

Shorten believes that the economy cannot afford such generous arrangements for the wealthy in much the same way Morrison believes we can no longer afford welfare for the unemployed, the sick and the less well off. It’s an interesting dichotomy. It’s neoliberalism versus left-wing ideology. We now have a clear distinction in policy approaches by the two major parties.

At a time when we have record high levels of private debt, record low interest rates, and mortgage stress tied to wage stagnation, the combination of which threatens to bring about an economic meltdown, highlighting the two starkly different approaches will make for a robust debate. It is one Shorten and his shadow treasurer, Chris Bowen are confident they can win.

We will probably get some indication of its acceptance or otherwise when the next opinion poll is published. However, putting some sense and sensibility back into the dividend imputation scheme is the right call.

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