Hockey under the Pump
Joe Hockey was doing his best to put a positive spin on the latest national accounts figures on Wednesday. The September quarter showed growth of 0.3% and 2.7% for the 12 months to September, which was significantly less than expected.
Hockey acknowledged that GDP growth had slowed but thanked ‘God’ that he got rid of the carbon and the mining tax so that the disappointing result in GDP growth could now be reversed in 2015. I interpreted his ‘thank God’ remark as giving thanks to the Almighty that business would no longer be hamstrung by the tax and would now likely want to crank up on its investment strategy.
I’m not sure his ‘God’ would agree with his reasoning but the remark gave me the impression that if the private sector didn’t get on board quickly, he (Hockey, not God) did not hold high hopes for our future. Actually, he looked like a defeated man.
While our exports grew, our gross domestic income went backwards which means our per capita disposable income was less. One would have thought that with all the trumpet blowing about the removal of the carbon tax and the associated electricity savings expected, we would have seen an increase in disposable income.
But, as it turns out, incomes are being squeezed due to a horror budget. Not surprisingly, household spending is contracting and we are now experiencing what economists are calling an income recession.
That means we are poorer and we are about to spend less.
One can see the pressure Hockey is experiencing. Business investment is in free fall and his entire budget strategy is dependent on the private sector becoming the main source of a rejuvenated upward move that would see real increases in employment opportunities. But it isn’t working.
Interestingly, two days after the Victorian state election, Daniel Andrews revealed, that in a phone conversation he had with the prime minister, Tony Abbott asked him to break an election promise and build the East-West tunnel. On Wednesday, Joe Hockey was doing the same.
It seemed that Hockey was implying that Andrews was responsible for holding up infrastructure works that would otherwise help Hockey’s bottom line; a new twist on the ‘blame Labor for everything’ strategy.
Daniel Andrews told Abbott that there were many things he wanted to build and would welcome Canberra’s involvement, but the East-West tunnel would not be one of them. And that is one of the reasons Hockey is showing signs of frustration.
He needs things to happen now, not in one or two years’ time. My guess is, he has gazed into the future and realised that if some big spending infrastructure programs don’t get underway quickly, his economic plan will be in tatters.
He is right on the need for some serious spending. Our economy needs a boost to stimulate growth. Economists are disappointed with Wednesday’s national accounts numbers. They were expecting something much better. We were too reliant on mining investment and now commodity prices have collapsed and with it, anticipated revenue.
But if the government expects the private sector to step up to the challenge while its austerity budget is slowing growth and squeezing disposable incomes, then perhaps they should be thinking about a stimulus budget. It really shows that they just don’t get it. They seem to want their cake and eat it too.
It is the Neo liberal macroeconomic aversion to debt that holds them back. The fear of leaving our grandchildren with a burden of debts and deficits. How paternalistic, how noble. Yeah right. It’s more likely the fear that some of the nation’s wealth may fall into the hands of the average man and woman that really bothers them.
Labor may not understand modern monetary theory any better than the present government but faced with rising unemployment, they would not be afraid to commit to infrastructure projects that would stimulate the economy and contribute to GDP growth.
Nor would they be afraid to invest in climate change initiatives that by definition would contribute to GDP growth in an uncertain future. They know the value of a strong workforce.
Labor would not be afraid to tell business to lift its game and play its proper role; even help it along if it could demonstrate improved productivity and domestic growth.
But what stood out in that short televised interview on ABC News 24, was that Hockey didn’t seem to mind urging Daniel Andrews to stick the proverbial finger up the nose of the Victorian voters. You could see the desperation on his face as he issued a plea to the Victorian premier to break an election promise and build the East-West tunnel.
If ever we had proof the LNP were unfit to govern we can see it here in three distinct attitudes. They have no respect for election promises, they are so fixated on surpluses that they can’t see how deficit spending stimulates the economy and their ideological bias is diametrically opposed to equality for all in a vibrant national prosperity drive.
Can we ever take anything they say seriously again?
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Just what friggin’ reality does Hockey live in?
As the cost of living figures came in north and predicted to head further that way mostly because of a reduction in income, Hockey stated that passing his budget would ease the cost of living. WTF Hockey, taking away income, $6000pa in some instances, will ease the cost of living? Really?
That is right up there with his taxing less will increase revenue reality.
Remember that when in opposition the only thing hammered more than the cost of living was the Carbon Tax. I could not count the number of times the Abbott opposition attacked the government on cost of living, how tough it is for Australians and how if in government they would improve cost of living for Australians.
I notice this another major broken promise that has not been taken up by the media nor the ABC Promise Tracker.
Hockey is right up there with Newman in Queensland, who after an increase in water bills said his government was putting downward pressure on them.
We’ve heard this type of double speak from the LN-P many times before, especially from State LN-P/LNP.
Reporter: “Prices have gone up when you promised they would go down?”
Minister: “But they have gone up less than they would have if we were not in power.”
Reporter: “Can you quantify that?”
Minister: “Trust me. Take my word for it that if Labor were in power the price rises would be much higher.”
Watching Hockey last night, he gave me the impression of a spoiled little boy who expects life to be easy for him, but isn’t quite as easy as he would like.
Do you remember… a couple of years ago… when this vapid buffoon was all over our TV screens relentlessly promoting his “Jovial Joe” persona? The MSM played along, presenting him as a jolly, knockabout bloke.
Surely I wasn’t the only one who could see the shallow, clueless, tosser behind the mask…
Nothing makes The Hockey/Abbott lack of understanding of economics more clear than cutting off two (or more) sources of income and trying to replace them with taxes on the poor,etc. reduce household incomes, squeeze wages, get higher productivity and still the numbers don’t work. Stimulate you fools.
Rudd was right…Abbott/Hockey wrong…
Yes,yes….just keep using the word ‘recession’, never mind qualifying it. Say it and write it until it surfaces in the MSM.
‘Recession we had to have, Joe?’
Meanwhile, head of the Commission of Audit, Tony Shepherd, is laughing all the way to the bank as Transfield have billions of dollars thrown at them to run our offshore gulags (how are those 200,000 shares going Tony?) and he asks Abbott to give his Westconnex project the $3 billion he is refusing to give to Victoria.
Is it any wonder that we have dropped 4 places in the world corruption rankings since 2012, outside the top ten for only the second time in the history of the ranking. (first time was in 1998 as Howard government ministers fell like flies)
“Accumulating corruption scandals”, including alleged corruption involving the Reserve Bank’s note-printing subsidiaries and the ICAC’s high-profile inquiries, had helped push Australia down the rankings, Transparency International said on Wednesday.
Australia needed to amend criminal laws dealing with foreign bribery to bring them into line with other countries and make it easier to secure convictions, he said.
Laws governing political donations – at the centre of a recent ICAC inquiry into state Liberal politicians – also needed to be reformed so that they were consistent at the state and federal level.
“The 2014 Corruption Perceptions Index shows that economic growth is undermined and efforts to stop corruption fade when leaders and high level officials abuse power to appropriate public funds for personal gain,”
Now may we PLEASE have a Federal ICAC even though our politicians assure us we don’t need one (cough).
In answer to your last question John – a definite NO.
“”But, as it turns out, incomes are being squeezed due to a horror budget. Not surprisingly, household spending is contracting and we are now experiencing what economists are calling an income recession.”” —don’t forget we have record levels of migration which artificially boosts the GDP figures. However wealth per person is in decline as a result of population growth which is costing governments billions in catch up infrastructure and catch up does not occur, our standard of living falls.
Hockey looks like a deer in the headlights of inevitability as his fanciful fake world falls apart around him. He has no idea what to do other than bluster, which seems to help his confidence a little, yet the undermining of his self-esteem just continues. I can see the mad angry overconfidence alongside confusion and hurt that we don’t believe his absolute nonsense.
It is amazing to watch he and Abbott stumbling and bumbling into the future with no plan just living on the dregs of failed policies. They are looking exposed and uncertain and that image will gradually leek into public consciousness as their popularity wanes. looming recession and their in the drivers seat. Blame Labor? Good luck with that but I think when Labor releases its policies next year the suffering and hurt can only get worse.
The liar label is never going away and failure is their death warrant. They couldn’t even last two years before self destructing. Just goes to show that bullshit is bullshit and these pigs will never wear lipstick again.
The LNP are absolutely hopeless managers of public finances who refuse to make their donors responsibly Australian citizens by demanding a contribution from them towards this nation’s welfare, a 1% wealth tax is a must.
“It is the Neo liberal macroeconomic aversion to debt that holds them back. The fear of leaving our grandchildren with a burden of debts and deficits. How paternalistic, how noble. Yeah right. It’s more likely the fear that some of the nation’s wealth may fall into the hands of the average man and woman that really bothers them.” Spot on …. The underlying Tea Party game plan which they are attempting to import (along with the TPP) from the U.S.
Yes, Kaye Lee, on the great need for a Federal ICAC …. and, I believe, there is a need not only in Australia but in most Western democracies (if not in every country) to tie percentage increases in Parliamentarians (Congressmembers’) salaries to minimum wage increases. I.E., if the Parliament’s members are given an increase of 20 percent a year, the minimum wage and pension rates also go up 20 percent. It is the only logical way of keeping their renumeration under some type of control …. IF there are consequences (and benefits) for the entire nation.
YES John! This was borne out in the 730 interview with Bill Shorten last night.
Despite Leigh Sales not listening to or comprehending what Mr Shorten was saying – she was just after her ‘gotcha’ moment – he kept on message:
“LEIGH SALES: But under a Shorten government, you are also going to have to make some difficult decisions around spending in portfolios like Health and Education because we’ve heard people like Martin Parkinson say the current levels of spending are just not sustainable. So, do you agree with me that you’re going to have to make some tough decisions around that stuff?
BILL SHORTEN: What I agree is that for Australia to have a bright future, then we’ve got to go for growth. And the way you go for growth is you spend money on skills and training and higher education. You make sure that you have a system where the infrastructure is being built and it’s working.
LEIGH SALES: That’s not enough to fix the hole.
BILL SHORTEN: Well, but, let’s talk about the future because that’s – I think Australians are sick of tit-for-tat and sound bites. You want me to be straight upfront with you and I’m happy to be. This government is a petty government. They go for changes which injure people. They change what they say before the election to what they do afterwards. I’m interested in going for the high ground. The high ground equation is pretty straightforward. Skills and education, better infrastructure. It also involves, I believe, having a more equal society.
LEIGH SALES: Mr Shorten, all of that is required, of course, but also, Martin Parkinson, other credible economists are saying to us that the budget has in-built problems, that we spend so much on health and education that we currently, with the way the economy is, cannot make the money that’s going to cover that. So how are you actually going to cover that spending if you don’t intend to cut it?
BILL SHORTEN: Leigh, you’re right, but if you don’t know where you’re going – and what I’m spelling out is our direction for the future. If you don’t know where you’re going, any road’ll get you there. And the problem with the current debate in Australia is that the Abbott Government is making things worse. Ever since the Budget, they’ve killed confidence. Under this government we’ve seen unemployment rise. We’ve got youth unemployment at a 13-year high. We’ve got – unemployment has risen generally. There’s a real problem here. The number of people participating in the economy has shrunk.
LEIGH SALES: But you’re telling us what the all the problems are, but not giving us any idea of how you would actually address them. You seem to be trying to convey that we can fix the economy without pain.
BILL SHORTEN: No, that’s not what I’m saying. What I am endeavouring to say and I’ll try and say it more concisely – I appreciate that you want that. It’s about the future. You know, Tony Abbott said at the G20 he’s not worried about the far distant future of 16 years. I think that’s not the right – Tony Abbott said the wrong thing there. It’s all about the future. I’m interested in policies. And this is how you build growth. If you’ve got growth, if you’re creating national wealth, then a lot of pressure comes off the budget. And so what you’ve got to do is you’ve got to build the infrastructure of the future, you’ve got to have the skills and training of the future …
LEIGH SALES: I’m sorry to cut you off because you have made that point, but the issue is that you’re not addressing what I’m saying, which is to deal with the in-built structural problems in the budget around big-spending areas like health, welfare, education, Martin Parkinson said last week we simply have to address the spending in those areas if we want to have a credible economic path forwards. Are you going to do that?
BILL SHORTEN: Fair enough. But what I’m saying is there’s a right way and a wrong way.
LEIGH SALES: So what’s the right way that you’re going to address spending in those portfolios?
BILL SHORTEN: Well, first of all, I’ve endeavoured to tell you where I see Australia going. It’s got to be growth, it’s got to be the creation of national wealth. Here’s some simple ideas for the Government to address right now …“
Interesting idea flohri.
The base pay of a federal parliamentarian had grown more than 250 per cent since 1991 while the average adult weekly earning was up by just over 160 per cent.
But the salaries of ADF members, and their civilian colleagues in the Department of Defence, had grown only about 110 per cent.
Mr Thompson acknowledged the government had frozen the pay of politicians and senior public servants this year.
“However, this needs to be seen in the context of the 31 per cent pay increase awarded to parliamentarians in 2012, along with the 27 per cent increase in remuneration awarded to the Chief of the Defence Force and a similar rise for departmental secretaries over the period 2012 to 2014,” he wrote.
Media Centre > GDP Data Reflects Serious Weaknesses in Australian Economy)
Pretty easy to see why Hockey’s Budget has been stinking up the place for 205 days.
Bacchus, I watched the interview and was quite conscious that Shorten either didn’t know or didn’t want to give anything away before sometime early in 2016. He will need to do better than that, even if only to highlight the big ticket items that the LNP want to get up, i.e. Paid parental leave, direct Action etc. Actually, the timing is perfect for Labor to go on the front foot and begin an education program to show voters that there is nothing to fear in deficit spending; get some experts on board and teach MMT.
“In his annual valedictory Christmas message to Parliament, Mr Abbott praised his deputy and said she had had a “stellar year”.
But he also lauded his Chief of Staff Peta Credlin as the “fiercest political warrior” he’d ever worked with.”
Unemployment is rising and will continue rising through 2015
And Hockey …. whose Budget has now been stinking up the place for 205 days …. wants Aussies to spend (on the credit card ?) for xmas.
Abbott is buying flying lemons, submarines and new warships ….. looks like all from overseas …… that could impact the bottom line by as much as $130 billion.
Australia is now on the road to Recessionville.
“Hockey looks like a dear in the headlights”
I think you mean deer, he’s NEVER looked like a dear. 🙂
I found the hypocracy during Smoking Joe’s press conference alarming. The government is continually talking about the “mandate” they have to drag us to the cellar. Well I think Daniel Andrews has a pretty clear mandate to harpoon the East-West tunnel.
Not that I believe in mandates. Mandates are a falsehood. Not everyone who voted for the Coaliton was voting for the abolition of the mining tax or the destruction of the NBN. They may have voted coalition in regards to the carbon tax but want a fast internet connection to their home. This si why mandates are BS.
It’s just the hypocracy of this Liberal government and their supporters that gets me.
Bit off subject but really important to know the facts. Kissinger of all people nailing US and EU foreign Policy on Ukraine.
Golly gee silly me.
I need to join a spelling bee.
Oops silly empty hollow fellow.
Now my complexion has turned all yellow.
Dear heavens what was I thinking?
When Hockey stick is really stinking.
Bacchus and John completely agree.
Sorry about the Name Shunrata having one of those days.
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Mobius. turn into senate hearing NBN Conroy. Unbelievable.
Yesterday Hockey said he wanted people to go out and ‘spend’ for Christmas and thereby help the economy. Wasn’t this the same man who castigated Kevin Rudd for putting cash in people’s pockets (part of the stimulus package) so that they could ‘spend’ and keep the economy buoyant (which proved successful). Hockey wants it both ways: he wants ordinary people to ‘spend’ this Christmas to bolster the governments economic position but at the same time take money off them. In other words, help me while I screw you.
Morrison’s commitment to increase in refugee intake is years 2017 and 2018 of 3500 each year
Interesting John – out of that interview I got that Mr Shorten does “not understand modern monetary theory any better than the present government but faced with rising unemployment, they would not be afraid to commit to infrastructure projects that would stimulate the economy and contribute to GDP growth.”
In spite of Leigh Sales trying to get him to say he’d increase taxes and other such nasties, he said, “What I agree is that for Australia to have a bright future, then we’ve got to go for growth. And the way you go for growth is you spend money on skills and training and higher education. You make sure that you have a system where the infrastructure is being built and it’s working.”
And, “the problem with the current debate in Australia is that the Abbott Government is making things worse. Ever since the Budget, they’ve killed confidence. Under this government we’ve seen unemployment rise. We’ve got youth unemployment at a 13-year high. We’ve got – unemployment has risen generally. There’s a real problem here. The number of people participating in the economy has shrunk.
It’s all about the future. I’m interested in policies. And this is how you build growth. If you’ve got growth, if you’re creating national wealth, then a lot of pressure comes off the budget. And so what you’ve got to do is you’ve got to build the infrastructure of the future, you’ve got to have the skills and training of the future” [bold mine]
You’re right, he did seem like he didn’t want to ‘scare the horses’, but to me he’s saying you’ve got to invest money into the economy to target the real problems – unemployment, underemployment and participation rate.
Interesting graph because it shows Australian labour wage share of GDP went down under Howard and continued down, started to recover under Rudd/Gillard and is now beginning to flatten under Abbott.
Says a lot.