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Honesty … what’s that?

When the Charter of Budget Honesty was introduced by the Howard/Costello government in 1998 it was intended to provide a framework for the conduct of Government fiscal policy.

“The purpose of the Charter is to improve fiscal policy outcomes. The Charter provides for this by requiring fiscal strategy to be based on principles of sound fiscal management and by facilitating public scrutiny of fiscal policy and performance.”

Broadly speaking, the Charter requires that budgets must be in balance over the course of the economic cycle, which means the government can run a deficit in bad times as long as there’s a surplus in good times. But, as Alan Kohler points out, the problem was it didn’t say how big these should be.

Stephen Anthony of Macroeconomics wrote in a report he did for the Minerals Council of Australia last year:

“Essentially, the fiscal strategy objective (of the Charter) provided the wrong diagnostic tool as a benchmark for success over the business and commodity cycle. As a result, governments spent up big in the boom and got caught on the down side of the cycle. Windfall tax receipts were frittered away.”

According to Macroeconomics, commodity boom windfall revenues contributed around $160 billion to the Commonwealth budget bottom-line up to 2011-12. Yet all that the fiscal strategy required was for the government to run a surplus – of any size.

Because the resources boom led to unexpected returns, there was no danger of being in deficit. Add to this the sale of many assets and there was a motza to play with. The Charter was still adhered to despite a huge spending spree.

The last five budgets of the Howard government contained net discretionary spending of $133 billion and net tax cuts of $117 billion. The structural deficit was set up by John Howard and Peter Costello and not corrected by Kevin Rudd, Julia Gillard and Wayne Swan.

Prior to the 2010 election, Chris Berg of the IPA (and ABC) wrote an article bemoaning the leaking of the then Opposition policy costings.

The Charter allows the opposition to give Treasury its election promises to check the policy costs are correct. If they don’t, the government clobbers them for avoiding scrutiny. Hockey’s figures were subsequently found to have an $11 billion black hole, and the auditors found guilty of professional misconduct. No wonder they didn’t want them released early.

Berg suggested that this part of the charter overwhelmingly favours incumbent governments because they:

“have had three years to consult with Treasury’s nearly 1000 staff about future policies, test policy assumptions, and get Treasury’s recommendations. Much government policy is formulated by Treasury in the first place. By comparison, an opposition is just a few people in a room thinking up ideas.”

From what we have seen of the Abbott government so far, they haven’t expanded their consultative capacity regardless of how many expert public servants are at their disposal and they will sack or ignore anyone who offers advice they don’t want to hear.

In 2004, Ross Gittins wrote ”The government is largely feeding back to the bureaucrats their own costings, whereas the opposition runs a high risk of slipping up somehow and being monstered by the Treasurer.”

To address this problem, in 2012 Labor established the Parliamentary Budget Office.

“The role of the PBO is to inform the Parliament by providing independent and non-partisan analysis of the budget cycle, fiscal policy and the financial implications of proposals.

As set out in the Parliamentary Service Act 1999, the Parliamentary Budget Officer has the following functions:

•Outside the caretaker period for a general election – to prepare policy costings on request by Senators and Members of the House of Representative, with the requests and the PBO’s responses to be kept confidential if so requested by the requestor.

•During the caretaker period for a general election – to prepare costings of publicly announced polices on request by authorised members of Parliamentary parties or independent members.

•To prepare responses (other than policy costings) to requests relating to the budget by Senators or Members of the House of Representatives.

•To prepare submissions to inquiries of Parliamentary committees on request by such committees.

•To conduct research and analysis of the budget and fiscal policy settings.”

One would have thought that the Charter and the PBO would have helped towards keeping the bastards honest but no, both sides still play silly buggers. They are under no compulsion to release costings by a set date and we have been subjected to the debacle of giving interested voters only a day or two to digest the material on many crucial policies. Others, like the NBN or Direct Action, are unable to be costed either due to lack of technical expertise or lack of policy detail. The PPL was based on rubbery assumptions which made the confidence level very low.

And then we have the manipulative approach to reporting that Joe Hockey sells to naïve voters. He pulled some pre-election stunts by using accrual rather than the accepted cash basis.

Image from facebook.com

Image from facebook.com

“Mr Hockey today admitted to using the accrual rather than cash bottom line for their numbers – which makes any figures Mr Hockey produces look much rosier than they actually are. The difference between cash and accrual bottom lines across the forward estimates is $16.6 billion. Were Federal Labor to use an accrual bottom line, it would be in surplus a year earlier, in 2015-16. What this means is that Australians will never truly know the state of the budget under an Coalition Government.”

And now, rather than using the independent PEFO as the true state of the inherited debt and forecast for the future, Hockey is using his propaganda sheet MYEFO, which included his revenue and discretionary spending decisions, as the starting point for comparison of how the government is performing fiscally. MYEFO is effectively saying that, under Coalition policies and spending commitments as they stood in December 2013, the gross debt in ten years’ time would be $667 billion. He then somehow sells that as Labor’s fault. I would love to see the same analysis done to the Howard government – what the debt would have been in ten years if his spending continued unabated. Using actual net debt when referring to the Coalition and projected gross debt when talking about Labor is blatantly designed to misinform.

It was interesting to read in the recent Commission of Audit that they recommend the transparency and rules about fiscal statements need to be tightened up.

“Budget transparency allows for a more informed public policy debate, fosters credibility and helps the community better understand fiscal policy. Improved fiscal transparency can assist in highlighting current and emerging fiscal risks, and in driving the necessary change in the community’s expectations of government.

Improved budget reporting requirements would improve transparency and accountability and assist the government in achieving its medium‑term fiscal strategy.”

They also take a veiled shot at Hockey’s forecasts and express their confidence in Treasury figures.

“Recent budget documents have reported large downward revisions to the economic and revenue forecasts. Against this backdrop, a number of concerns have been raised about the transparency of current forecasting arrangements.

The Review of Treasury Macroeconomic and Revenue Forecasting (Australian Government, 2012) found that ‘Treasury’s forecasts are comparable with, or better than, those of official agencies overseas’.”

The report goes on to recommend some changes.

“One option for Treasury to improve the transparency of budget forecasts would be to require a further formal consultation with a panel of experts before budget forecasts are finalised.

Another option which improves transparency about how the Budget forecasts compare with the views of other forecasters could be achieved by requiring comparisons to be published between key economic forecasts and relevant consensus forecasts.

Confidence intervals could also be published for key forecasts.”

All I can say is good luck with that!

I am expecting General Jim Molan (retired) to be brought out of mothballs (if anyone can find him since he was given $1 million to be our ‘Special Envoy’ smashing the people smuggling business) and given Martin Parkinson’s job at Treasury. Launch Operation Bamboozle where, in the national interest, they will no longer be giving the financial bandits a regular update on fiscal matters.

“The repair job started from day one obviously with the election of the new government but it accelerates from today given that we will see the full extent of Labor’s debt and deficit disaster.” – Tony Abbott, December 2013

MATHIAS CORMANN: “Labor left behind a debt and deficit disaster after completely mismanaging public money over six years in government. We are taking responsibility to fixing up the mess they left behind.” July 16 2014

Joe Hockey: “There’s no crisis at all in the Australian economy,” July 26 2014

Honesty … what’s that?

 

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79 comments

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  1. John Kelly

    How is it possible to believe what politicians tell us about the economy, when it is all too clear that they don’t understand it themselves. Not even economists agree with each other. They all have a particular ideological position from which the mechanics flow. As long as the monthly and quarterly figures produced are in sinc with the ideology, they think they are doing a good job. If the GFC taught us anything, it is that the neo-liberal ideology is seriously flawed. But try telling that to a government surrounded by neo-liberals.

  2. David Stephens

    In working on honesthistory.net.au we had to come up with a brief definition of honest history; ‘interpretation robustly supported by evidence’. I think the key is the degree to which a statement is supported by evidence. When a politician blusters and can’t provide chapter and verse to support same, then that is not honest.

  3. Pingback: Honesty…what’s that? | THE VIEW FROM MY GARDEN

  4. Kaye Lee

    Go to the Liberal Party page…

    “Labor is now standing in the way of nearly $40 billion of Budget savings out until 2017-18.

    This adds to Labor’s debt and deficit disaster after their six years in office.

    Labor created Australia’s Budget mess, delivering nearly $200 billion in deficits and $123 billion in deficits going forward. Now is their chance to join with us to fix this Budget mess.”

    https://www.liberal.org.au/latest-news/2014/05/20/labor-standing-way-40-billion-savings

    “Joe Hockey has told New Zealand that there is no crisis in the Australian economy, nor is it in trouble.

    The treasurer also made no mention of the “budget emergency” he and his government referred to when justifying their unpopular budget to Australians.”

    http://www.sbs.com.au/news/article/2014/07/26/hockey-tells-kiwis-there-no-economic-crisis-australia

  5. Möbius Ecko

    Oh how quickly they forget that in opposition Abbott and his bunch of misfits blocked many revenue and budgetary measures proposed by both the Rudd and Gillard governments, all of which would have improved the budget position going well into the future.

    Of course Abbott and co couldn’t have that as they would have had nothing to bash Labor with if perchance they did win government on the back of whole bunch of lies and the aid of a very dishonest MSM.

    They continue their dishonesty to this day. Even blaming Labor is a broken promise as Abbott promised he would not blame shift and would take responsibility if in government.

    A more dishonest bunch you will not find anywhere.

  6. Paul Scahill

    After hearing of Joe Cockys admission that there was no budget emergency, and knowing what bare faced liars the co-allition are only goes to show that Australia and Australians made a grave mistake on September 7, 2013. Not that many would admit to it , because traditionally Aussies admit only to supporting winners. One can only hope that they correct this anomaly at the very next opportunity. When one looks at the fallacy of the Speaker, one can see what a devious lot the co-allition really are. One does not have to look past the so-called Prime Minister and the Treasurer to see the deceit and lies that are further endorsed by the Murdoch propaganda machine and further propelled by the likes of Morrison with his lies and deception (secrecy) and probably the rest of them. Not forgetting Abetz and Cormann and the like. Yes us Aussies have a lot to answer (the next generation) for. HAVE AN ELECTION!! Is that not the cry of the previous opposition, currently the government. Let us hope that it is O.T.T.Even that is too long>

  7. June M Bullivant OAM (@granvillehistor)

    We need people to speak up and speak the truth The great danger is that we allow untruthfulness to drift and we do not respond quickly and strongly enough.

  8. Roswell

    June, that’s what Kaye Lee is doing. 😉

  9. helenmarg

    Thank you Kaye .Excellent as usual.

  10. John Lord

    In a New Zealand interview Saturday Joe Hockey said that there is no crisis in the Australian economy, nor is it in trouble.He also made no mention of the “budget emergency” he and his government referred to when justifying their unpopular budget to Australians.

    “The Australian economy is not in trouble,” he told New Zealand political current affairs show The Nation on Saturday. “There’s no crisis at all in the Australian economy,” the treasurer said.

    Does that mean he has been telling porkies.

  11. bjkelly1958

    It has become patently obvious that the notion of honesty is as foreign to the front bench as table manners are to a dung beetle. The reliance of twisted figures and dog-whistle comments in media portrays the Government for the sham it is. They don’t possess an honest bone between them and have subjugated reality for their own personal fantasy of how they believe, or at least what they have been told to believe, Australia should be.
    It is entirely credible that they do not see Australians below a certain level of wealth as human beings at all, but rather have a feudal view of we vassals.

  12. Fred Martin

    If Peter Slipper is guilty of dishonesty over a couple of cab charges ( and could serve up to 5 years in prison ) then what is the entire Abbott cabinet guilty of in their dishonesty with the Australian people via their budget, which will cost me, personally, thousands of dollars and Australians generally BILLIONS. They should get life.

  13. Neil of Sydney

    I new it was a mistake to visit. I have not posted here for a while.

    I thought the Charter for Budget Honesty was designed so the incumbent govt cannot lie to the Australian people like Keating/beazley did in 1996. Remember when Labor said the budget was in surplus but actually was in deficit so they lied to everybody as you would expect for an ALP govt.

    Then we have this little gem

    “Because the resources boom led to unexpected returns, there was no danger of being in deficit.

    The resources boom did not start until 2004, years after Costello started running surplus budgets. And anyway don’t you people say deficits are not dangerous anyway?

    Then we have this

    ” Hockey’s figures were subsequently found to have an $11 billion black hole, and the auditors found guilty of professional misconduct. No wonder they didn’t want them released early.

    You forget. The Coalition did start to submit their figures for costing before the 2010 election but somebody, most probably Swan, leaked the results. The Coalition called in the Federal Police and went to those auditors to have their figures costed. And i think they still stand by their figures.

  14. Matters Not

    I new (sic) it was a mistake to visit

    Nothing new in your efforts Neil. Your mistakes are legendary.

  15. Möbius Ecko

    Bet Neil doesn’t address any of Abbott’s, Hockey’s or this government’s lies, and there are a lot of them. Like Hockey’s revelation there’s no budget crisis, in other words he was handed a good economy.

  16. Neil of Sydney

    I will comment on that.

    Firstly as Treasurer Hockey has to be careful what he says. His comments can effect the share market.

    Secondly they are two different things. The economy is OK but the budget is trashed. And a trashed budget will eventually lead to a trashed economy.

    The unemployment rate was in double digits when Keating knifed Hawke to become PM and at 11% when Keating won the 1993 election. Unemployment now at 6% was the record low for the Hawke/Keating govt.

  17. Matters Not

    His comments can effect the share market

    ‘Effect’ the share market? Unlikely. Investors, broadly defined, are smarter than that, but his ramblings might ‘affect’ same.

    Neil as usual, you are hilarious.

    but the budget is trashed

    I agree, and who is responsible for driving that bus?

    Neil, those ‘lies’ always come back to bite you.

  18. Neil of Sydney

    Too funny.

    You lot blasted Costello for running surplus budgets to get our debt low and now you brag about our low debt. It was not until Costello reduced our govt debt from 18% of GDP to 6% of GDP that we got our AAA credit rating back..

    Yep, the budget is trashed and there is an emergency. Another 3 or 4 Wayne Swan deficits and we will lose our AAA credit rating meaning we will have to pay higher interest rates on our debt which are already higher than most countries.

  19. RalphG

    “The economy is OK but the budget is trashed.”

    Neil, you must have a very low standard if you think the economy is “OK”. Unemployment is over 6% with underemployment at least that much again. That’s at least 12% of the working age population who don’t have enough work.

    That situation exists not because the government can’t do anything about it. It’s because they do not want to do anything about it. Neither did the previous government.

    Your assertion that the “budget is trashed” only serves to illustrate your complete ignorance of how our monetary system works.

    Do you understand that the Federal Government can never run out of money? Australia, like many other countries, uses a fiat currency. An intrinsic property of a fiat currency (with a floating exchange rate) is that the issuer can have as much, or as little, as it wants.

    If you were to spend a little bit of time reflecting on this you may even understand the purpose(s) of taxation. I’ll even give you a hint – it’s not to finance government spending.

    A budget deficit usually means that the private sector, that’s us, can save. A budget surplus usually means that private sector savings are reduced.

    The government can spend too much money, it can spend too little money but to say that a “budget is trashed” is absolute nonsense.

    On economic matters, Hockey has no idea. Wayne Swan had no idea. Peter Costello had no idea. Paul Keating had no idea (with the exception of floating the dollar). If even if they really did understand how the monetary system worked, they never admitted it in public. They simply embraced the neo-liberal bullshit.

  20. Dan Rowden

    I can’t help but wonder why those most prominently pushing MMT at this site are almost invariably using pseudonyms. Why is that? Excuse my paranoia, but I can’t help but find it troubling.

  21. Matters Not

    can’t help but wonder why those most prominently pushing MMT at this site are almost invariably using pseudonyms. Why is that

    Dan I use a pseudonym because I am into the business of discussing ‘ideas’ or ‘concepts’. Who I am, is therefore somewhat irrelevant. Or at least it ought to be. Unless of course, who I am or who I was, (in terms of ‘work’ or ‘qualifications’), might have some relevance to an ‘issue’.

    Dan, why don’t you ‘take on’ the MMT ‘concept’ and perhaps enlighten us all as to its strengths or failings? Me included by the way.

    And you can use a pseudonym if you like because it’s the argument that counts, while the name matters not. Just sayin …

  22. Neil of Sydney

    Do you understand that the Federal Government can never run out of money? Australia, like many other countries, uses a fiat currency. An intrinsic property of a fiat currency (with a floating exchange rate) is that the issuer can have as much, or as little, as it wants.”

    It is comments like that that proves that what happened from 1996-2007 would never be replicated by a Labor govt. Costello wanted to get our AAA credit rating back which we lost under Hawke/Keating. It was not until Costello reduced our debt to approx 6% of GDP that we got it back. Labor party supporters do not believe debt is a problem. Conservative voters generally do.

    It is a fact of history that Labor always trashes the budget. Hawke/Keating, Cain/Kirner, Beattie/Bligh etc etc. Labor just cannot stop its reckless spending. Never has, never will.

  23. Kaye Lee

    I am wondering what Neil thinks the job of government is. Are they to collect our taxes and sit on them so they can say look we have a surplus? What is the point of that? How does having a surplus make your life better because it invariably means the money is not being spent to provide infrastructure and services ergo your life is worse with a surplus. No-one is ever going to come knocking on your door to pay government debt Neil. The government never has to save for retirement or pay off its debts Neil. It needs to provide what our society needs, not pay off the mortgage and accumulate a nest egg to keep it comfortable in old age. Businesses borrow money to make money. Governments borrow money to build the nation.

  24. Kaye Lee

    If we sell off assets and privatise services we just transfer the public debt to the private sector (look how high private debt was under Howard). Private companies are under no obligation to provide unprofitable services like the bus route that only services a few people or regional health, education and communications, or courses with few students. Private companies are there to maximise their profits so prices invariably go up (see electricity). Private companies can also go bankrupt, something our government will never do, which affects all their creditors and shareholders. Public debt will always be serviced – private debt offers no such guarantee.

    As an aside Neil, perhaps you could explain to me why, if debt is such a bad thing, Gina Rinehart just borrowed $7 billion for her new mine.

  25. Neil of Sydney

    Exactly.

    I never want to hear a Labor supporter boast about our AAA credit rating. It took 6 surplus budgets by Costello to get it back.

  26. Kaye Lee

    Thank you for so eloquently answering the points I raised. You are like one of those dolls where you pull out the string and they say a phrase regardless of anything that has just been said.

  27. Kaye Lee

    I am also wondering Neil, what is the point of a AAA credit rating if not to borrow money at lower rates. You seem to think it is a certificate to hang on the wall. It is meaningless unless you want to borrow money.

  28. Neil of Sydney

    I would also like to say that unemployment went from 8% to 4% under Coalition rule from 1996-2007.

    Something that never would have happened under ALP rule.

  29. Roswell

    Neil, you are incredibly annoying. In the years I’ve known you I am yet to see you contribute anything worthwhile across a number of sites. I often wonder what your motives are, but I’m wasting my time wondering. Your intentions are clear: disrupt whichever left-wing site that is unlucky enough to be visited by you.

  30. RalphG

    “Labor party supporters do not believe debt is a problem. Conservative voters generally do.”

    Neil, do you say this as the result of ignorance or stupidity? Ignorance can be cured with knowledge. There’s no cure for stupid.

  31. Möbius Ecko

    RalphG Neil’s sole purpose is to disrupt threads that point out the flaws, failing, malfeasances and lies of his beloved Liberals, but most especially Howard.

    He does this by repeating the same inane rubbish he has been for years, almost without change. It’s always a small handful of talking points that boiled down come to; Liberals = good, fantastic, saviours of Australia. Labor = bad, evil and their supporters more so.

    There’s no lucidity in his posts and for his purposes there doesn’t need to be, he only wants posters to engage him so he can then derail the topic away from the facts pointing to the failures of the party he so blindly follows. He is often successful in this.

    He will not answer your questions nor does he ever address questions of Liberal leaders’ and Liberal Party failures, instead his response to everything is Labor, and he will go back in history only to perceived or made up Labor failings whilst deliberately skipping over the Liberals.

    I totally ignore his posts and only respond to those who have responded and quoted him. It’s makes for a better discussion thread and more intelligent conversation.

  32. Neil of Sydney

    Well i see my fan club is out in force.

    I was commenting on the post. In particular the last point really annoys me

    “Joe Hockey: “There’s no crisis at all in the Australian economy,” July 26 2014”

    The economy maybe OK but the budget is trashed.

    Nothing wrong with what Hockey said. The budget and the economy are two different things.

  33. Kaye Lee

    If the economy is in good shape then the current government should have no problem as it has been them making the spending and revenue decisions for over ten months. Surely THEY won’t spend more than they earn…hence we should be in surplus next year 🙂

  34. Neil of Sydney

    It will take years to clean up the mess you people have created. Politics means you have to tread carefully.

  35. Kaye Lee

    Looking around……don’t you worry about THAT “you people”.

    I thought we were talking about the budget. That is, look for one year at what you will earn and then decide on what you will spend it. We have already seen this government refused to honour agreements signed by the previous government. This budget is their choice and no-one else’s. Or are you going back to debt again?

  36. RalphG

    Thanks for the heads-up Mobius.

    I used to work with someone who believed that everything a Liberal government did was good and everything thing a Labor government did was bad. It would seem that Neil is cut from the same cloth.

  37. Don Winther

    Neil dont worry, it took 64 years to build GMH and Abbott cleaned them up in 4 months.

  38. Neil of Sydney

    Don

    We have been losing our manufacturing industry since the 1970’s. Back then we used to make almost everything and now it is mostly gone. I guess a large chunk left when Hawke/Keating dropped the tariffs.

    To blame Abbott for the demise of GMH is typical of you people and does nothing to help save what little manufacturing we have left.

  39. darrel nay

    Honour means a sovereign people,

    I would research ‘The Club of Rome’ from the 1960’s and the U.N.’s Agenda 21 if anyone is interested in why Australian manufacturing has been decimated over the years. GMH, in spite of hundreds of millions of dollars of corporate welfare sold us out – they are traitors.

    Australia will lose out if we continue to participate in the ‘free-trade’ agreements being pushed by the global elites and the multinational corporates – multinational corporations like McDonalds, Monsanto and GMH are not loyal to any nation rather they serve the almighty dollar. These corporates are currently destroying our farming sector and purchasing massive tracts of land which will make it harder for our children to own property in the future – corporations have a notorious record when it comes to respecting the land.

    The ‘free trade’ agreements are also gradually dissolving our Australian sovereignty and handing vital decision making processes over to the UN and international courts. The UN has no business dictating to Australia. Increasingly Europeans are fed up with the EU and equally people all over the world have had enough of the corrupt UN.

    If the pollies, and their bankster mates want to hand our sovereignty over to the UN then they should have the guts to do it via the Constitution and a referendum – they will not do it via referendum because they know Australians don’t want to be run by the UN.

    For we are young and FREE!

  40. Don Winther

    Free trade agreement with Thailand good-bye Ford, free trade agreement with Korea good-bye GMH, free trade agreement with Japan Good-bye Toyota, free trade agreement with China good-bye all manufacturing and jobs. Liberal gave them what they wanted and they took it and left. Good business bad politics.

  41. Neil of Sydney

    So free trade agreements is the reason we lost our manufacturing? Perhaps it is too expensive to make stuff in Australia. Fact is it would most probably cost $5,000 to make a television in Australia or we could import them for $500.

    But where we once made everything (fridges, washing machine, TV’s) it is now mostly gone. It is a shame but i don’t think free trade agreements are the only reason.

  42. Choppa

    “Do you understand that the Federal Government can never run out of money? Australia, like many other countries, uses a fiat currency. An intrinsic property of a fiat currency (with a floating exchange rate) is that the issuer can have as much, or as little, as it wants.”

    You have been sucked into MMT my friend. MMT was a popular conspiracy during the GFC – an attempt to make the US debt sound like it didn’t really exist. The theory being that the yanks could potentially print as much money as they want with little impact to their economy, because there is a belief that the world will always want US dollars. Such a theory cannot apply to Australia – Australia’s currency goes through boom/bust cycles. There needs to be demand for fiat currency, Australia’s currency will return to being out of favor when the rest of the world completes their recovery and the cost of all imports will go up. Australia isn’t a self sufficient country, never will be. The concept that debt is just additional money to the private sector is stupidity – we don’t live in a bubble, the private sector does not solely source its funds from within Australia. The mechanics are understood, the conspiracy theorists were put to bed 5 years ago.

    As for manufacturing – there’s a number of reasons it bit the dust, was always going to. People make better stuff than we do at a fraction of the cost is the main reason though. People need to get with the times – act a little more like Scandanavia – when industries become uncompetitive, get rid of them. People need to be willing to retrain, not to have money thrown at them just for the sake of a few jobs. Its the laziness and unwillingness of some Australians that’s the problem. Its not the governments responsibility to retrain you – its your own responsibility.

  43. Möbius Ecko

    MMT is not a conspiracy Choppa, it’s a monetary theory, and just as valid a monetary theory as the one we are currently running under, which globally is a proven failure. Trickle down does not work and never has.

    You do know that those other counties who supposedly manufacture cheaper than us heavily subsidise their manufacturing industries to keep them viable?

    It is the government’s responsibility to retrain you if their policies cause the skill sets you work in to collapse. And the other side of this is that there are many people out of work with skill sets needed, many who have retrained off their own backs, but industry would rather bring in foreign workers they can rort.

    And finally the old fall back meme of Australians are lazy. The stats don’t back that up. Our workers are amongst the most productive in the world, work amongst the highest unpaid hours and overtime and take amongst the least holidays and days off in the OECD. Howard’s battlers, who he went on to screw for their hard effort by foisting WorkChoices on them, to force even harsher conditions for less return.

  44. Kaye Lee

    Labour productivity is at its highest annual rate since 2001-02. The fall in multi-factor productivity is mostly due to the fall in capital productivity, rather than labour productivity.

    Wages growth – as measured by the ABS wage price index – is running at the very low end of the range it has been in since the late 1990s.

    The high Aussie dollar, caused to a large degree by mining, has been a very large factor in the demise of manufacturing. The withdrawal of government subsidies and capitulation on free trade agreements were definitely large contributing factors also.

    TWO-THIRDS of the migrant workers on 457 visas have taken jobs that did not have to be advertised to Australians. Half of Australia’s migrant workers are recruited onshore, with one in every 20 backpackers last year ­receiving a 457 visa to stay working here for four more years.

    On 12 March, the Government confirmed that employers would no longer be penalised if they breach the law on how many foreign workers they bring in to Australia. An employer approved for, say, five skilled staff from overseas can now bring in an unlimited number of labourers, without fear of government action.

  45. Kaye Lee

    “The entire premise is based around the rather fact-free proposition that the reason most people are unemployed is because they are not trying hard enough to get a job and that somehow working for the dole and forcing unemployed to send out 40 applications a month will improve their chances of getting paid work.

    Given the Government is spending about $5.1billion on its policy, one would hope it was supported by extensive research. But alas, no.

    Mr Hartsuyker dismissed research on work for the dole that has shown it doesn’t work and can actually hinder the ability for jobseekers to get a job as “very old”. This “very old” research covered the Howard government’s work for the dole scheme, which the Government lauds as a success.

    One can only suggest as well that Mr Hartsuyker is ignorant of research into the UK work for the dole scheme done only two years ago in 2012 that showed it has utterly failed.”

    http://www.abc.net.au/news/2014-07-30/jericho-sorting-fact-from-fiction-in-dole-policy/5631940

  46. Don Winther

    Ha Choppa what do you do for a job?

  47. Neil of Sydney

    “Hockey’s figures were subsequently found to have an $11 billion black hole, “

    Maybe so but the bottom, bottom, bottom line was that the Coalition budget way back in 2010 would improve the budget bottom line more than Labors, it was just not as good as the Coalition claimed according to Treasury

    http://www.abc.net.au/news/2010-09-01/treasury-finds-black-hole-in-coalition-costings/2245360

    “But Treasury analysis given to Tony Windsor and his fellow independents Rob Oakeshott and Bob Katter shows the Coalition’s promises would only add between $860 million and $4.5 billion to the bottom line”

    Get that?? The Coalition said the budget would improve by $11.5B over 4 years whereas Treasury said it was only better by $0.86B- $4.5B.

    And what did Treasury say about Labors costings

    “Labor said its promises would improve the Budget bottom line by about $44 million over four years, but Treasury says it is actually more than that – about $106 million”

    Not surprising that Treasury agrees with Labor since as Gittins says “The government is largely feeding back to the bureaucrats their own costings, whereas the opposition runs a high risk of slipping up somehow and being monstered by the Treasurer”

    But the bottom line was that even with the black hole the Coalition budget was better than the ALP budget so why did Windsor and Oakshott side with Gillard??

  48. Kaye Lee

    According to PEFO (produced by Treasury and Finance independently in August 2013) there was a projected cumulative deficit of $54.6 billion over the forward estimates with a small surplus in 2016-17.

    Joe Hockey took over and started spending money and cutting revenue so, 3 months into office, the cumulative deficits over the forward estimates had blown out to $122.7 billion with no surplus for a decade.

    The bottom line is why did anyone vote for these charlatans and are they feeling justifiably pissed off at being conned?

  49. Kaye Lee

    “why did Windsor and Oakshott side with Gillard”

    “Both men said that they had more faith in Julia Gillard’s ability to manage a minority government than they had in Tony Abbott’s. They saw she had superior negotiating skills. They believed her when she said that she wanted the parliament to run its full term. In contrast, they felt strongly that Abbott wanted a quick return to the polls to install a ‘legitimate’ government, having already declared that a Gillard government would be ‘illegitimate’, a position from which he never retreated. They sensed he was not at all interested in a long-run parliament.

    Yet they were aware that Abbott badly wanted to be prime minister, and would ‘do anything’ to get that prize in his hands, except, as Windsor later reported, ”to offer his arse, and he would consider even that”, so desperate was he! They reported that he was even prepared to introduce a carbon tax if that was one of their conditions, although he had ruled out any such notion early in the negotiations. They judged Abbott to be not ready for the high office he coveted. After three years of minority government, Windsor confirmed that view when he said that they had “probably done Tony a good turn by not handing it to him”, as clearly he was unready.

    Oakeshott indicated that he and Windsor, both representing regional electorates, had been able to negotiate with Julia Gillard a good local package for their electorates, a good regional package that offered equity to regional areas, and a good national outcome. The NBN, climate change, mining and gas extraction, regional education and minimizing the chances of an early election, were crucial elements. They judged Julia Gillard as one who could successfully lead a minority government. Their judgement proved to be correct.

    In reaching their initial decision, there were some parliamentary matters that were pivotal. They were interested in assuring ‘supply’ and ‘confidence’, and in lifting parliamentary standards and the quality of committee work.

    Strongly supportive of the NBN, they recognized how essential it was for the development of regional business, and for its competitiveness. Armidale, at the centre of Windsor’s electorate of New England, was an early recipient of the NBN. Anecdotal stories soon emerged of how the NBN had benefitted businesses there, especially with the improved upload speeds it offered. Developing a plan for the management of water in the Murray-Darling system was a high priority to them both; they played a major role during committee work in achieving a ‘once in a century’ plan.

    They were both convinced that man-made global warming was a reality and that urgent action was necessary to slow it down by reducing carbon emissions. They supported the notion of putting a price on carbon preparatory to moving to an emissions trading scheme. Oakeshott had the preservation of biodiversity at the top of his wish list. They could see that was Julia Gillard’s intent, which contrasted starkly with the Coalition’s Direct Action Plan, one that was supported neither by economists nor environmentalists as an appropriate answer to global warming. Both were prepared to say so, while most of the Fourth Estate avoided doing so.”

  50. Neil of Sydney

    “are they feeling justifiably pissed off at being conned?”

    Conned?? Swan said in his first budget there would be a $21.7B surplus and we ended up with a $27B deficit.

    A $48B turn around.

    I would believe numbers supplied by the Coalition over anybody.

    Too bad you have no conscience and don’t feel conned by Swan/ALP/Treasury who promised surplus after surplus and gave us deficit after deficit.

    The four years of surpluses I announce tonight are a powerful endorsement of the strength of our economy, resilience of our people, and success of our policies.

    Wayne Swan 2012

    Now i wonder what you lot would be saying if a Coalition Treasurer said that and it did not happen?

  51. Kaye Lee

    In Hockey’s own MYEFO statement:

    “The projected level of net debt in 2016‑17 is $280.5 billion (15.7 per cent of GDP), which is $63.2 billion higher than at the 2013 PEFO.

    The main factor contributing to the increase in net debt is the higher expected issuance of CGS relative to the 2013 PEFO of around $60 billion in face value terms as a result of the increased financing requirement.”

    Let’s remember that the net debt when Hockey took over was $191.52 billion.

  52. Neil of Sydney

    So Wayne Swan lying to us for six years means nothing? The whole Opposition burst out with laughter when Swan announced his 4 years of surpluses in 2012.

    Anybody with any honesty knew it was a lie. But ALP supporters do not care about ALP lies.

    And i would trust anything posted by Hockey over anybody else.

  53. Möbius Ecko

    Kaye Lee don’t let Neil derail this topic. You are bringing up pertinent facts but he will just ignore them, not respond to anything you ask of him and continually harp back to Labor.

    Without reading any of his posts I can already tell you he’s mentioned Labor debt and Hawke and/or Keating.

    He will do this over and over the moment any facts are raised that show the Liberals and their leaders to be wanting, deceptive, liars and failing. The one thing he will never do is address the topics highlighting those things, instead his answer to everything will be “Labor”.

    To illustrate his gross hypocrisy. When Labor was in power, raised in another blog were points on Howard’s failings both in government and as Treasurer under Fraser. Neil remonstrated that was in the past and Labor was in government so they had to be held accountable. I can just about bet my house on it that Neil is not addressing this current woeful government, or if he is it’s only superficially, and he’s harping back to the past about Labor.

    If people want to engage him them fine, but be aware of the fact that every time you do he’s successfully derailed the discussion and he will not present anything new but unerringly regurgitate the same points he has for years, so much so you can almost write his responses for him before he’s posted them.

  54. Kaye Lee

    Did you trust Joe when he said this?

  55. Kaye Lee

    If you DID trust Joe’s word, then how does it reconcile with this?

    “A group of Catholic and Christian church leaders have accused the Abbott government of ”state sanctioned child abuse” in the immigration detention system, and called for Immigration Minister Scott Morrison to step down from his position as guardian for all unaccompanied minors.

    Leaders from nine Christian denominations, which form the Australian Churches Refugee Taskforce, will release a report on Wednesday that commends a raft of recommendations to the Abbott government to improve the wellbeing and treatment of children in onshore and offshore immigration detention centres.

    The claims were rejected by Mr Morrison.”

    http://www.smh.com.au/federal-politics/political-news/morrison-accused-of-state-sanctioned-child-abuse-20140729-3cs3i.html

  56. Möbius Ecko

    Kaye his answer to that will be “Labor”. It will be along the lines of Labor put children in detention as well so according to Neil logic that makes it OK for this government to abuse them even more.

    And of course they are saving their lives but stopping them from drowning at sea.

  57. Kaye Lee

    ME,

    I know Neil’s modus operandi but I consider him a wonderful straight man. He unthinkingly regurgitates lines he has been fed and is incapable of critical analysis but he allows me to show others just how spurious his arguments are. His total avoidance of facts about the current government only underline their poor performance. All he can do is express his adoration then retreat to the past because he is unwilling to face the present. I am not trying to convince him – he is just practice and a very easy foil.

  58. Neil of Sydney

    So Wayne Swans 6 years of lies means nothing?

    And that is what they were. They were not mistakes which all people make.

  59. Kaye Lee

    CGS on issue 30 June 2013 $257.37 billion
    CGS on issue 25 July 2014 $325.887 billion

    Joe just keeps on borrowing…… $68 billion in less than a year.

  60. Möbius Ecko

    I’ll try to find the source Kaye but I heard on radio a week or so ago that Joe borrowed several billion more for something to do with accountancy. I bet that gets added to Labor’s debt figure.

    Your point on Neil is taken and appreciated as you’re right, it allows us to see the facts and figures we wouldn’t see otherwise.

  61. Neil of Sydney

    “Joe just keeps on borrowing…… $68 billion in less than a year.

    Yep, debt is like a runaway train. But you lot keep telling me it is not a problem because we are sovereign in our own currency so what is the problem? Also debt is low so it is not a problem. Right?

    It shows you how great Costello was. To turn around the deficit budgets of Keating was a major achievement.

    As usual the Coalition has to clean up the mess created by Labor. Look at what Campbell Newman was handed.

    https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/8642/width668/3gvw56bg-1331785441.jpg

    I am sure there would be a graph like that for every Labor govt both State and Federal for the last 35 years. Except for NSW where the Labor govt is fiscally conservative.

  62. Kaye Lee

    So what is your opinion on having $100 billion sitting in a future fund rather than helping pay off the debt? What do you think of sick Australians contributing another $20 billion to sit there in another future fund? Is this the best way to use the money?

    The government could actually borrow the money, put it in the future fund, get a greater return than the interest rate at which they borrowed, and leave us out of it. What’s your opinion on that?

  63. Neil of Sydney

    The FF is for Public Servants Superannuation (Police, Politicians, Army, Navy etc). If you start touching peoples Superannuation you will get people worried.

    Actually i stopped salary sacrificing. I used to SS 7.5% of my salary and then i realised some time in the future a socialist govt will get into power and trash the budget so badly they will have to wipe out people Superannuation to pay off the debt. So i decided to pay off my home loan with the extra money rather than SS.

    But we had no problems until Australia voted for Rudd/Gillard/Swan in 2007.

    Trouble with Australia borrowing money is that we have to get most of it from overseas. Of our current interest bill of $1B/month we have to send $700M of that to overseas investors. That is a lot of money to leave the country every month. And of course it will get much higher if nothing is done.

  64. darrel nay

    Sick of over reaching governments,

    The average Australian wouldn’t steal money from people but for too long we have supported governments who steal our money everyday. We wouldn,t rob our neighbour, so why are we comfortable with empowering the government to do it for us. Compulsory taxation is simply theft by another name. Compulsory superannuation is theft too. Governments use a monopoly on force to tax us into submission – they are a violent gang of war mongering thieves.

    We are adults and we are more than capable of making our own choices with how we spend our money – we don’t need some clowns from Canberra deciding for us. Governments are corrupt and inefficient when it comes to spending our money.

    Cheers

  65. Michael Taylor

    Kaye, Neil usually gets his information from Murdoch sites. He’s one of the few Australians who considers them a reputable source.

  66. Möbius Ecko

    And don’t forget the Liberal Party site and even direct from Liberal minister’s sites who he states he trusts even when their lies and misinformation are highlighted to him. According to Neil only Labor is corrupt and only their supporters lie and can’t be trusted.

    Neil was a laugh at first but wore out the humour a long time ago and after losing count of the same point repeated over the years, mostly on Labor debt being bad, which makes up about 95% of his posts, I just gave up.

  67. Möbius Ecko

    And talking of honesty here’s another misdirection by Abbott.

    After all his chest beating against Putin and the media making out he and rusty iron lady Bishop the younger gave Russia what-for today it’s been announced that the US, Europe and other major economies are going to impose harsh sanctions on Russia’s energy, finance, defence and other key sectors.

    So wimptough man Abbott should have been right up there announcing his sanctions against the man he gave so much what-for just a short time ago. Of course Abbott, the man who supposedly led the dissent against Putin and Russia, is not going to impose any sanctions.

    His reason.

    His job is to get the dead home, but he doesn’t rule out tough action against Russia later.

    Yep, PM Abbott can only do one thing at a time. By his own admission he can’t bring home the bodies of Australians and impose sanctions on a country at the same time, something other countries are managing.

  68. Neil of Sydney

    Well i read it in the newspaper that we have to get 70% of our borrowed money from overseas meaning 70% of the interest on our debt goes offshore.

    But i found this link on the page you linked to

    http://aofm.gov.au/statistics/non-resident-holdings/

    I think it says that 67% of CGS are held by non-residents. Don’t know where you get your figure of only 15% from

  69. Kaye Lee

    That looks correct Neil. I must be misunderstanding. The place I got the figures from was the “Beneficial ownership by country of residence” which gives Australia 16.6% and domestic custodian and nominee companies 68.5%. I’m not actually sure what that means so you may well be correct.

  70. darrel nay

    Evening Everyone,

    I love people from around the world but in an age where economic warfare rages around us I think it is sensible to have a look at which ‘foreigners’ actually own our debt. We are in a position where foreign governments, big business and the UN (and all its minions ie. World Bank, IMF, etc.) are increasingly able to leverage policy in this country – this spells trouble for the average person and their children/family.

    It’s great to see more people on the website – the more the merrier.

    Peace

  71. RalphG

    Choppa, MMT simply describes how fiat money systems actually work. Get over it.

    As long as Austalian dollars are the only legal tender in this country and as long as the Australian dollar is the only currency that can be used by people to extinguish their tax obligations, there will always be a demand for the Australian dollar.

    It wouldn’t matter a fetid dingo’s kidney if no other country in the world wanted Australian dollars. We need them.

    Where in the bloody hell did you get the idea that a government could spend as much of its own currency as it likes and that doing so would not have an impact on that country’s economy? If you think that is what MMT expounds then you are very much mistaken. If you think that is what I wrote you are also very much mistaken.

    “The concept that debt is just additional money to the private sector is stupidity – we don’t live in a bubble, the private sector does not solely source its funds from within Australia. The mechanics are understood, the conspiracy theorists were put to bed 5 years ago.”

    What in the zarking fardwarks are you on about?

  72. Neil of Sydney

    I believe it is not as bad for the USA. Everybody knows that China lends the USA lots of money but i believe the USA gets 30% of its bond money from foreigners which is much lower than Australia. Furthermore the USA has lots of assets overseas which more than covers the amount the USA owes foreigners.

    Even furthermore, even though we have AAA credit rating we are paying much higher interest rates on our borrowed money than some European countries with downgraded credit ratings.

    There is indeed a budget emergency. We need to get the budget back into surplus ASAP. If interest rates start to increase we will be saddled with sending billion of dollars overseas every year just to pay the interest on the debt. We are already sending $8B/year to foreigners thanks to Rudd/Gillard/Swan and the people who voted for them.

    Furthermore i don’t believe we are sovereign in our own currency crap so debt does not matter.

  73. jimhaz

    MMT cannot be a perpetual motion machine, just a smoother of peaks and troughs, but with great potential for misuse. I don’t really get the theories, but even so, reality has no freebies. The US people will eventually pay for their misuse of their economic size and dollar status, which has allowed them a lot more freedom to abuse by what seems to me to by MMT-like monetary policy. The 1% have been grateful (to the GOP). For most though real wages have not risen for a long long time.

  74. Neil of Sydney

    “I wonder where you get your information from. You really should stop making things up.

    I wonder if you could give me some examples of me making stuff up? It looks like i was right that we have to source 70% of our debt from foreign investors meaning another $700M has left the country this month. It would not be so bad if we lent the money to ourselves then the money would stay in the country.

    I think the banks do the same. I have read they have to source some money from overseas to lend here because they do not have enough deposits to cover all the lending requirements.

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