It’s not Rocket Science
The shortly to be released Mid-Year Economic and Fiscal Outlook (MYEFO) for 2014/15 is expected to tell us what we already knew. There is a blowout in the current budgeted deficit from $29 billion to $34 billion. By any measure one could have seen that coming as far back as June 2014.
Furthermore, budget deficits projected in the forward estimates through to 2017/18 will be exceeded as well. Again, no surprise there. Reduced revenues, largely in the mining sector, and a host of other miscalculations have led us to this point which means the much sought after surpluses that the present government so desperately yearns for, will not be happening.
Is anyone surprised? If they are, they shouldn’t be.
What it means in very simple terms is that the government is spending more money than it is taking in. Well so what? With the private sector not spending what they were expected to, the government should be spending more. That’s how our economy should work. But don’t tell Joe Hockey or Mathias Cormann that. They think government should spend less and tax less all the time.
In a perfect world they might be right but the economies of the world haven’t been perfect for 100 years. And they are not going to start now. Joe Hockey is a captive of neo-liberal economic philosophy proffered by conservative think tanks and business lobby groups that thrive on surpluses.
Why? Because continued surpluses mean continued unemployment at a level sufficiently high enough to control wages growth. Joe Hockey’s austerity budget will only serve to redirect national income away from working families and increase the income of the already wealthy in our society through company profits, higher share prices, imputation dividends and so on.
Surpluses undermine economic growth when they are achieved by austerity measures which is what Hockey et al, are trying to impose. That is the backward, twisted nature of neo liberal economics. All they are going to achieve is a reduction in domestic spending power.
When people don’t spend, business slows and unemployment and underemployment grows. It’s not rocket science. MYEFO will likely show that the combined unemployment and underemployment rate is now at 15% and rising. That is not a signal to try and achieve a surplus.
If our most important trading partner, China, continues to slow down its growth rate, Hockey will continue his austerity policy which will mean even slower growth, or no growth for us, leading to recession, increased unemployment and underemployment. How stupid is that?
The Australian public have been deceived. They have continually been led down the garden path by politicians and media economists giving the wrong advice. The metaphors of doom have been allowed to overshadow responsible reporting with crisis headlines like: ‘budget emergency’, ‘alarm bells are ringing’, ‘budget black hole’, ‘burdening our grandchildren’, ‘mushrooming budget deficit’, ‘unsustainable spending’, ‘spending like drunken sailors’ and a dozen others I could mention.
But no one seems willing to give the credit where it is due.
In 2008 the world faced the mother of all economic meltdowns all of which was due to the excessive greed and the most irresponsible actions piloted by sections the wealth sector. What did our government do under Kevin Rudd’s leadership? It ‘spent like drunken sailors’.
And what was the result? We were the only OECD country not to fall into recession. Our GDP increased, employment held steady and we were the envy of a world that is still struggling with the aftermath of that meltdown today.
And who opposed Kevin Rudd’s stimulus measures? The present government. And what is their solution today? Austerity. What fools!
What should we be doing?
In the words of Bill Mitchell, Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at the University of Newcastle, NSW, Australia, we should, “Get back to doing what governments are elected to do and that is advance public welfare and stand against the vested interests that seek to unfairly gain income and advantage at the expense of the masses.
Contrast these words with what you are going to hear from Joe Hockey, Mathias Cormann other government members over the next week or so when MYEFO is released. Then go and bang your head against a brick wall.
It’s not rocket science.
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Return to home pageexcellent article , I want to read more from John Kelly
And what annoys me most is Labor’s inability or lack of courage to counter the Libs lies in the so called budget emergency, where are they in pointing out the huge increase to the deficit since the Libs took over, the answer is no where. Abbott and Hockey will spend the next 2 years ramping home how they had to fix Labor’s budget mess and by not challenging this assumption and lies Labor will continue to perpetuate the myth of Libs being the better economic managers.
“Reduced revenues, largely in the mining sector”?
BHP and Rio Tinto have seen their profits climb as increased iron ore production offsets the price slide.
BHP unveiled a $US13.8 billion full year profit in August, while Rio made a $US5.1 billion profit for the year to June 30.
Operating profits rose nearly eight per cent to a record $270.8 billion for the year to June.
The drop in iron ore prices has been compensated for by increased production so using that excuse is just another fib.
Great article as usual John.
Furthermore the major miners are actually increasing production as the price falls to weed out the marginal small miners who will go to the wall if the price does not recover. These guys are merciless and their actions often counterintuitive to the ridiculous posturing of economic rationalism and the competition mantra. In fact if you look at mining and the media they do everything possible to destroy competition by forming mega-corporations. Thieves and liars. Who would think the mining and media magnates in bed with each other?
That is a great quote by Bill Mitchell and should be the rallying cry of the left.
Posters on this sight have consistently provided a rational retort to the right however where the hell is Labor’s voice?
Getting the LNP out is urgent however if there is not a comprehensive paradigm shift we will be left with more of the same surplus deficit nonsense under Labor. They need to squash this foolishness well before the next elections to give them a chance to govern effectively by promoting an understanding in the public why deficit spending is good policy during recession or impending recession.
Their whole strategy makes no sense. They want the economy to grow. To achieve this they cut disposable income to the lowest paid families – the people who would recycle every cent of income. They increase the number of people below the poverty line and raise fuel prices and possibly GST. They slash public service jobs and cut funding leading to more job losses just as manufacturing is declining and mining is moving into production phase.
Whenever I have needed more money I work harder to increase my income. Why is this government so completely ignoring revenue? The tax white paper should prove very revealing.
“The Prime Minister has already indicated that tax reform is not about finding a way to raise taxes. “
Not only are they ignoring it, Kaye; they’re killing it.
If the General public has less to spend the income from GST becomes less …. People will spend more on-line to save… so retailers overseas will collect more of our revenue and again no GST and all other tax income becomes lost to our economy not to mention employment loss here etc…Shop local they say keep money in our local communities but how will we be able to afford this with so much new pressure on our Kitty…….fuel ,Uni,co payment,……….
I’m no economist but then neither are Hockey and Cormann so I’ll proffer this advice. Stop flogging your dead dog budget as if all that’s needed is a better sales job with no need to improve the product. It’s always going to stink. Revenue is the issue and it’s time to recognize that the handouts made by the Howard/ Costello government on the back of a now past mining boom need to be recouped. The party is over and asking the hired help to foot the bill for this largesse will not be accepted by any fair minded Australian.
Why is capital gains tax only 50% compared to other taxes. What’s so special about this form of income? Removal of this lark would also serve to improve the situation vis á vis housing rental and ownership. Why are such enormous concessions made to those who are wealthy enough to supplement their employer guaranteed superannuation. 15% instead of 48% in many cases and much of it to those already receiving quite generous amounts through this scheme. I’d rather have 9.5% of $150000 going in than 9.5% of $50000 anyday. What about you?
Howard and Costello pissed $300 billion up the wall leaving a piddly $20 billion surplus at the same time as attacking work place conditions, undermining public health and education at every opportunity they could and selling anything that wasn’t bolted down. And the Conservatives look on this as a golden age. Well I guess it was for those who benefitted from the cash splash. Were they better economic managers because they had a bigger pie to slice up? No. Did they display any greater degree of foresight as they bought their way through 11 years of government? No. As far as I can see those who received the most are those best placed to redress the structural deficit that these clever dicks left in their wakes. As I said, the hired help are there to empty the ash trays and pour the drinks, not to pay for the champagne and cigars.
I recall the Labor government trying to bring in a super profits mining tax for the very reason such bounty would not last forever, which of course, was watered down by our present government.
No its not rocket science, although for the Abbott government it may as well be.
Look forward to a bleak Christmas, have not heard anyone discuss buying presents.
The tories will continue to find ways of punishing ordinary Australians instead of looking for extra revenue from their rich donors, we have three and a half million people in Australia trying to survive on $37,000 per annum or less yet this tory government refuses to even consider a 1% wealth tax on the several multimillionaires and billionaires who make squillions out of ordinary people. If one raises the subject they say it the politics of envy, far from the truth, it is the politics of fairness, balance and common sense. The LNP must be the most hated political party in history due to their sustained attack on we ordinary people, yet obviously some uninformed people in this bracket continue to vote for them, why?
CMMC there will be no presents in my house this year, which is very hard to explain to a nine year old, but as I have explained to her presents don’t feed you or put a roof over ones head or pay the water rates, land rates, electricity and gas bills, and internet so we can keep in touch with the world
but goodwill costs nothing so we are making presents from what we have in our house and shed for anyone who needs a present from us 🙂
The Federal Government has slashed funding to a key United Nations environment agency by more than 80 per cent, stunning environmental groups ahead of a global climate change summit in Peru.
The ABC has learned the Government cut $4 million from the UN Environment Program (UNEP), which provides advice on environmental policies and climate change negotiations.
Meanwhile, we spend $243.8 million on school chaplains and give Kevin Andrews $20 million for marriage counselling vouchers.
“Marriage seems to protect from contracting cancer and offers a better chance of survival after diagnosis.” – Kevin Andrews, Maybe ‘I Do’: Modern Marriage and the Pursuit of Happiness (Connor Court Publishing, 2012).
We have spent $7.5 million on one-use orange life rafts despite Widodo already flagging his opposition to Australia’s policy of sending asylum seekers back to Indonesian waters.
Tony Abbott tells defence to find the $17 million to reinstate leave entitlements for ADF personnel while spending over $600 million on new planes for him and his press entourage.
The Abbott government has created a hub of 37 communication and social media specialists to monitor social media and offer strategic communications advice costing taxpayers almost $4.3 million a year.
In June this year Senate documents revealed that Mr Morrison’s departments hired 95 communications staff and spin doctors, costing taxpayers at least $8 million a year.
Details released showed the departments of Immigration, Border Protection and Australian Customs had 85 permanent and 10 other staff responsible for media monitoring, internal communication and public relations.
The Immigration Minister Scott Morrison and the Assistant Immigration Minister Michaelia Cash have spent nearly $120,000 monitoring the media for mentions of their names and the immigration portfolio, eclipsing cabinet colleagues including Foreign Minister Julie Bishop.
“No one is buying what you are selling, what you are laying down. that is the problem”
http://www.watoday.com.au/federal-politics/political-news/tony-abbott-declares-labor-feral-during-morning-tv-blitz-20141201-11y2sl.html
Good article John. The LNP is also expecting the private sector to invest money into services that the government should be providing. Of course, the private sector is only going to do this if they can make money from it. There are plenty of public services that cannot be run at a profit. The Labor government is also expecting the private sector to provide what should be public services. Both groups need to wake up and shape up.
The quote from Bill Mitchell is powerful and compelling. Any politician who does not agree does not believe in democracy and should not hold their elected office.
@DanDark: Thanks for putting up that Today Abbott interview clip. It went for about 90 seconds.
Here is the full 10 minutes version that is even more revealing if you can bear to watch Abbott staggering and sloganeering through the entire interview. (Note the ribbon that appears about 7:00 Cheeky bastards!):
Dan Dark, and other victims of the Abbott recession, keep an eye on Gumtree. They have a ‘Free’ section, and you would be surprised at what people give away.
I recently helped an old friend set up their new house, largely with items from Gumtree at no cost.
Fancy Italian washing machine, matching Westinghouse fridge/freezer, huge blonde leather sofa.
So well said John Kelly! The bottom line is private enterprise can look after itself for all the reasons the LNP idiots claim government enterprises should be able to look after themselves. Government “businesses” (Medibank Private, Australia Post, ABC SBS etc etc etc) exist to serve those of us who need help in certain areas so that no one misses out! And it is the job of Government to see that no one falls behind. To protect the majority not favour those who do not need help!!!
This Government is a miserable failure on all levels and has damaged this Country irreparably!
Of course they should be voted out, but they should all be punished by having taxpayer funded entitlements, pensions, super removed.
They do not deserve to be rewarded for punishing us and we deserve to be rewarded by punishing them!
LOOK! TERRORISTS! OVER THERE!
What is not rocket science, is that if the whole world is going backwards economically… and you spend everything you don’t have to keep yourself moving forwards… sooner or later you are so far ahead of the pack there is nowhere to go but backwards.
Rudd didn’t save us, he delayed it, and made it worse – with INTEREST… the main beneficiaries of Rudds actions are those who needed a safe economy to invest their money in, Rudd made us financial slaves for the rest of the world, and they loved him for it.
To keep spending more money that we don’t have and getting ourselves in further debt is just lunacy. We should have taken the little pain that was coming our way then, rather than the massive pain that you quite rightly see in our future. Thanks for nothing Rudd.
Andrew,
Can you tell me what difference a deficit makes to your life? Could we discuss what a difference unemployment makes to people’s lives?
What is the massive pain you fear? Do you think someone will foreclose on your house to pay the national debt rather than just issuing bonds that investors are lining up to buy?
@Kaye I think their philosophy is to fragment the workforce and diminish the workers ability to collectively bargain. More unemployed places more downward pressure on wages. The more desperate people are to find any job, the more they are likely to take a job with degraded conditions. It plays into the hands of their sponsors to stop workers collectively standing together and bargaining for better pay. Instead they want powerless individuals unable to fight against the might of an entire organisation.
Andrew,
Can you also tell us to whom does the Australian government owe interest?
Capitalism requires a large compliant workforce who respects authority and is who is willing to work to increase the wealth of the few. As workers struggle to provide their families with all the temptations that a Capitalist society offers they are far less likely to risk their employment, and less able to improve their situation.
The conflict between the bourgeoisie (those that own the means of production) and the proletariat (those who sell their labour) is crucial to the maintenance of capitalism. Its function is to create an obedient, docile, uncritical workforce who will work to support the upper-class’s lifestyle and the economy. Keeping wages low, or debt pressure high, means workers will be less likely to complain or make demands.
Demonising unions and defunding advocacy groups takes away any hope of a collective voice for the people and, with the government squarely on the side of corporations whose aim is to maximise profits, we are slaves to corporate greed.
Considering almost a third of companies listed on the ASX 200 pay 10 per cent or less in corporate tax one would wonder why we are going to lower company tax by a further 1.5%.
If Rudd’s actions during the GFC were so bad, why did every economist of renown, plus the world bank and IMF praise him for taking such decisive action to avoid recession?
If the COALition had been in charge at the time we would still be trying to recover from recession, just like the rest of the world.
The only people who can’t see this are right-wing ideologues and their rusted-on supporters.
http://independentaustralia.net/wordpress-opt/wp-content/2013/04/AustraliasDebt.png
Yes Andrew we’re a real financial slave to the rest of the world.
If that’s the case then the rest of the world is also enslaved, but way more so. So just who are we and the rest of the world slaves to?
Andrew, to say,”To keep spending more money that we don’t have and getting ourselves in further debt is just lunacy,” is to ignore the function of a Central Bank, i.e. in our case, the Reserve Bank. We are not in debt. That is the great lie of neo liberal economics. The Reserve Bank can wipe debt as quickly as it creates it. No interest to pay, not real money, just a number in a computer. We go through this charade of debt to convince the nation that a sovereign government runs its economy the same as we run a household when, in reality, it doesn’t. The Reserve Bank creates our money out of thin air, as and when it judges we need it. It also destroys money as and when it decides necessary. The notion of national debt is a myth because a country that creates its own money cannot owe itself anything. If you are interested in learning more about this, then follow Bill Mitchell’s ‘billy blog’ and I promise you a whole new world of economic management will materialise before your very eyes.
On the topic of real science – could the Abbottoir get any more stupid? They love to talk up cost while knowing the value of absolutely nothing:
http://www.canberratimes.com.au/technology/sci-tech/nobel-prize-contender-san-thang-cut-from-csiro-20141201-11xvaf.html
Economic experts?
The Abbottoir has turned blatant stupidity into an artform.
Another good post Kay.
I hope Andrew reads it and of course am in agreement with fellow MMT advocates. Good blogs sisters and brothers.
Wow, I touched a nerve… Posts addressing mine in order:
@Kaye Lee: Government debt means more of the money raised in taxes is used to fund the promise made yesterday, than could otherwise be used to fund the pensions tomorrow. Sure you don’t see it directly, but every dollar used to fund the debt is one less available for now… and unless that money was used for something that will raise more money… it’s not a good investment, it’s just robbing the future. (NOTE: I hated the idea of the future fund the Howard government implemented too.) My fear is that the pain will be an amplified slowdown, so instead of 10% unemployment without the government assistance back then… the inflation takes it to 12-15% unemployment tomorrow instead… as I said, not averted, just delayed.
@Lee: http://aofm.gov.au/commonwealth-government-securities/treasury-bonds/
Government raises money for 42 inch LCD stimulation by selling bonds with the assurance of a return for your investment…. interest in anyone’s book. They are taken up by financial institutions and rich people the world over (I don’t have a list)… but lets just say a good portion of the money our government raises in taxes ends up with the people you don’t like.
@Kaye Lee: No, Capitalism relies on the concepts of supply and demand, and risk and reward, … and the fact that not everyone is willing to take the risk to get the reward. Talk to any business owner about the risks they took to get to where they are now, the hard work, the potential for ruin (financial and personal)… then go ask the regular worker if they would be willing to do that. Successful people say you can have what I have if you are willing to do what I did… the fact is that so many people are not willing to do what they did to get it…. Here is some motivation: http://www.inc.com/lolly-daskal/100-motivational-quotes-that-will-inspire-you-to-succeed.html
Risk and reward are built into the fabric of the world and cannot be circumvented for long. The farmer risks the seed to reap the reward. The ship risks the storm to fulfill it’s purpose, it has always been so, some people understand this, some do not. Only taxing mining that makes a profit is a bad idea because it messes with the risk-reward. (less risk as you don’t pay if it’s not profitable, but less reward if it is profitable)… if the minerals are worth more, then just demand it up-front and let the business decide if the reward is worth the risk.
@Anomander: If someone does something that helps you, and agrees with your own way of thinking, you praise them for it… simple. In my opinion all Rudd did was ensure that Australia shouldered it’s fair share of western debt, and they appreciated our graft.
@Möbius Ecko: Yes, the western world in particular are enslaved financially, http://en.wikipedia.org/wiki/Debt-to-GDP_ratio Meaning we work for someone else’s benefit… the chains are not physical anymore, we are enslaved by our own desires, and passions…. we see we want, we borrow… then we pay…. Is it wrong for me to wish we were free like we used to be before Rudd (and the GFC) came along?
@John Kelly: Yes, we could just print more money… let’s face it a piece of plastic or a number in an electronic device has no value other than what we all agree it does…. How much is a house worth??? (What someone is willing to pay for it)… the problem with printing more money is that you relatively devalue the whole amount… it sort of works, but then it doesn’t…. If I give you a gold bar and you melt it down into 10 bars, it is probably worth less than the original (due to spillage), don’t fall for the lie that you can create real worth from nothing… someone pays for the lottery win (and the lottery company to keep going)…. personally I’m not in to voluntary taxation.
Andrew,
http://bilbo.economicoutlook.net/blog/?p=332 Deficit spending 101 part 1
http://bilbo.economicoutlook.net/blog/?p=352 Deficit spending 101 part 2
http://bilbo.economicoutlook.net/blog/?p=381 Deficit spending 101 part 3
Recommended reading : The 7 Deadly Innocent Frauds of Economic Policy (MMT – Modern Monetary Theory Book 2) by Warren Mosler, currently available for US 88c for the Kindle version at Amazon.
This is hilarious, for all the wrong reasons. Or maybe it’s just me.
I visit many sites for information and do not watch MSM, other than the ABC. There was an article by a fellow called Oakes on the ABC website today titled “Oakes on the rise of spin”. My reading was his lamenting of loss of access to “real” information without the interference of “spin doctors”.
This site, as well as many others, has pointed to the number of spin doctors paid for by taxpayers to “monitor” social media. I am presuming here, but they don’t monitor with the intent of just listening. Government, generally, has understood it must intervene. Now I am going into the “maybe it’s just me”, but has anyone else thought there are more “trolls” than normal. I identify trolls by a pattern. They start with an attack on the author, not the message. They introduce “facts”, usually selected at random and without verification, to obfuscate real facts. Known knowns and unknown knowns.
But what I have found amazing, particularly in the last week, across so many sites, is the number of postings by people who are ardently supportive of this government’s policies, apparently very well resourced (look at the times for replies to come through) and without any credible sociological statement.
Governments exist to set standards. Businesses exist to make profits. I can argue this one really well. After many decades, I still can’t see the two being capable of being in the same space. They have different functions. That’s why I don’t bother with the distraction of trolls, but really enjoy the genuine argument, or robust discussion. I really think they are, also, different functions.
Oh, as a thought, Mr Kelly. Your reference to “head banging” reminded me of an Irish joke told to me (as an Irish immigrant). Paddy – “Sean, why are you hitting your head against the wall?”. Sean – “It just feels so good when you stop.”. Maybe, bring on the next election and many of us will stop! Take care
Andrew
Taxation isn’t designed to pay for things. It is to control the amount of money in circulation. When governments stop spending, private debt skyrockets as happenned during the Howard era. The idea that the interest we pay on CGS stops us from spending on other things is erroneous. We can issue bonds to pay the interest You talk of “successful people working hard” yet you ignore the fact that they use debt to run their successful businesses. Why did Gina Rinehart just borrow $7 billion for her Roy Hill mine? She had enough money to cover that herself but that would be stupid. Even my business has a large open line of credit. I pay interest on that but that is a business cost that is acceptable because it allows me to invest in things that bring a greater return. Unlike me, the government does not have to prepare for retirement. You are bemoaning our debt saying it will cause inflation but that patently has not happenned as inflation remains very low, I know it is a hard concept but you must stop thinking of government spending like it’s a credit card that must be paid off before you die and leave your children with a debt. It just doesn’t work that way.Employment is far more important than debt
Andrew you didn’t answer who those nations sovereign in their own currency are enslaved to.
You’re commixing government finances with capitalism and private finances. They’re not the same.
Andrew, where do I start? I won’t. Lee, Kaye and Möbius Ecko have given you some food for thought but I’m not sure you will ‘get it’. If you allow your head to absorb the fact that taxes don’t fund spending, then we might have a chance with you. But, if you can’t, nothing else we say will cut through. I would strongly recommend that you read the Deficit Spending 101 links that Lee has posted. They are written by Bill Mitchell whose economic credentials make politicians look like school children. That is your best bet to avoid joining the coalition of the ignorant. Good luck with that.
Andrew the job of Government is to provide services for the people so that standards of living are acceptable and humane. Money in the bank will not do this! If we have a surplus, say by having a huge Medical Research Fund that will only be used for research once a suitable level of money has been squeezed out of sick people visiting their doctor and the money is left untouched until then, that means that money is sitting there so that Smokin’ Joe can claim it as a surplus when it could have been financing sick people getting treatment!!!
Geez I am a housewife and at least I understand the financial scamming being purported as “policy”.
Kyran, agreed. Hence the reason why I posted links instead of engaged in a lengthy discussion. If the reader doesn’t understand the links, or argues against them, then engaging further is a waste of time.
@Lee; I read those documents… I’m still not sure how the interest (public and private) fit into that framework, and whether it is a drag on the economy or whether they balance each other out… I do figure it is a vast simplification as there are time delays in the system, the currency transfers are not instantaneous (if they were why do I have to wait to get my money?)… yes they do balance in an accounting sense (at all times), but anyway, it’s a simplification. To go back to the first article… if there were only two people (Gov and Private) and the government spent 100 dollars and the other person refused to pay tax or work….???? If the role of the government was to ensure full “employment” (??why was work-for-the-dole so hated then??), where is the desire to pursue any activity that would attract being taxed? The government would spend 100, get 0, private assets would increase by 100, causing the government to issue an iou for 100 (plus interest at a later date) in order to stop the monetary rate dropping to zero… all well and good… but unless the government gets some taxation to tear up the iou at some point, the process repeats until the iou becomes worthless and it all falls apart. An iou is only as good as the trust that it will be paid at some point…. more risk of non-return results in higher rates of interest being required by those taking the iou, until they just won’t take them anymore. Ok so in a closed system (“The Flanian Pobble Bead is a currency, however it is only exchangable for other Flanian Pobble Beads.” – Douglas adams) anyone receiving government spending has to save (government iou) or spend it in turn (taxation eventually)… but somewhere in there is an incentive to do something with your life…
@Kryan; If you were referring to myself… sorry not a troll, not government sponsored, not trying to attack the author or name call, just trying to offer a different view to the one you are used to. I would argue that governments enforce standards (where they can), but that the community actually sets the standards…. I mean the government can make a law, but if no-one enforces it, or believes in it, then it is a waste of space… eg: http://www.abc.net.au/news/2013-08-17/northern-territory-to-ditch-their-witchcraft-law/4894086
@Kaye Lee: If public debt = private savings… then why now that we have massive public debt did the private debt plateau, and not drop? Something has been over simplified here. According to the documents Lee linked to bonds are issued to constrain interest rates, not service debt. Gina Reinhart borrowed money because if you can borrow money at a lower rate than the return you can earn on it, then you are making a Profit… while “own money” is used when people stop lending to you or things go haywire… simple really. Your business line of credit is used to cover activities that will help to earn more money, not fund pony rides or spend time surfing. I think I understand the Bill Mitchell view of things, but it seems to miss out on motivation… “I wouldn’t get out of bed for less than $10,000″… at what cost is full employment achieved? People are people.
@Möbius Ecko: If you read the Bill Mitchell blog, then the answer seems to be the banks that are allowed to trade in the currency (have accounts with the reserve)… but it seems to gloss over foreign investment, or currency exchange… also a bank balance with the reserve is determined by the people who hold funds in it… which is everyone really… so a banks stability depends on the currency it holds reserves in? I say enslaved, because the borrower is always enslaved to the lender (I must work to pay the debt), or in the government case either tax more than they spend (to service the debt), or have someone willing to defer the debt (issue more bonds), and more to the point consider the currency valuable enough to hold promissory notes in it. Unless there is a one-world currency and one-world government this is not a totally closed system. People move, corporations have headquarters in more tax-favorable locations…
@John Kelly: read them… anything else you would suggest for my education?
@Kerri: One model of government states that it’s reason for existence is to provide protection for its residents (??relative safety included in standard of living??), but as the world is without wars we have moved on? I agree that the “Future fund” and “Medical research” funds are horrible ideas, not for quite the same reasons as you it would appear… ie for Medical research… the risk in medical research is that you will not find the cure for anything useful, ie no reward for the investment…. it is not the government’s job to take that risk… if they did who would get any of the hopeful reward? It is not for the government to run a “profitable enterprise”… also anything the government guarantees supply for warps the market… why would private companies try to compete with the government’s research… do they still provide a tax benefit for their private competitors? It is not for the government to “pick winners”… anyway, I agree, not the Government’s job, I think Tony is barking up the wrong tree there, and Costello also did us a disservice trying to put the government in the public market. Yes, bad policy, hope it doesn’t get through… Housewives are wonderful, I have one of those.
@Lee: I am but a humble seeker of the truth, willing to have my views challenged… I think I am grasping the concepts… just wondering why I keep working then… I’ll let you know if I have any further revelations thanks to your prodding.
Andrew,
A job guarantee is not the same as work for the dole. A job guarantee pays a living wage, whereas work for the dole is slave labour. The job guarantee would provide a job to anyone who wants to work (and is capable of working). A lot of unemployed people actually do want to work and be paid a fair wage for their efforts. That is incentive to work, so they can afford things that they want rather than always struggling to afford absolute necessities. With a job guarantee in place, if someone is capable of working but then chooses not to work, the government would be quite justified in refusing to pay unemployment benefits to them.
Income tax does not pay for anything. It is used to regulate the economy. With more people employed in jobs that pay at least minimum wage, there are a lot more people with money to spend so they spend it and businesses grow. However, if the demand for goods and services exceeds the ability to supply them, then hyperinflation will result. Income tax applied at an appropriate rate will keep that in check. We also have levies and consumption taxes, such as the GST. If people are spending more, then they are paying more of those taxes and levies, which are used by the states to provide public services. The states’ budgets do run like a household budget, so they can provide more services when they have greater revenue. So all of us are actually better off when the gap between rich and poor is narrowed.
If you take a look at countries like Sweden, where the government does provide a lot of social services and unemployment is low, people don’t seem to mind paying high taxes because they get a lot in return. Note Sweden is not sovereign to its own currency, so income tax is needed to fund public services. A read of social media in Australia reveals a lot of Australians who would not mind paying tax, or more tax, if the government actually provided some decent services.
Fiat currency explained:
Yet Andrew you still haven’t told me who we’re enslaved to. A “lender”? The lenders or foreign investment are also entities and countries in debt, far more debt than Australia in many cases, and Australia also invests in foreign countries, so are we enslaving them whilst being enslaved?
Are we slaves to the central banks who create the liquidity for the banks to create money who loan it out or some other unseen nefarious entity?
Andrew, your comments are too flippant and dismissive for me to take you seriously. Your ‘road to Damascus’ moment will have to wait.
@Lee: Thank you… re FIAT currency, consider me educated (I admit I was ignorant)…. though work-for-dole = slavery, while job guarantee = fairness?? What is the difference, the amount given? Which is all relative and based on perception anyway? Wouldn’t that just be another way to create or control inflation? ie mess with supply and demand just like printing more money would?
@Möbius Ecko: I think I am beginning to see your point of view… thanks for your patience.
In 2011 I lived in Houston, America, on the drive home of an evening all the major intersections were filled with ragged people begging.
When I commented to a group of young engineers that this was a shocking state of affairs, their response was a general blank look. It wasn’t that they didn’t care, they just didn’t see what was in front of them every day.
When I added this state of affairs was surely the result of the destruction of the middle class, the ones with a disposable income, some scoffed the others didn’t know or seem to care.
These were extremely smart university educated young people who knew nothing of how their economy worked.
It’s the same here, the only thing that keeps us from becoming little America is our innate sense of fairness and if more people learn how our economy actually works we would have less economic illiterate politicians and then maybe we will have a chance of not becoming America. And believe me, you don’t want us to become little America.
Listen to what Bill Mitchell says.
@Andrew – Sorry I implied that minimum wage and living wage are the same thing but they are not. Minimum wage, which is defined by legislation, may still be lower than what is needed to live. A job guarantee should be paying a living wage. Work for the dole pays less than minimum wage. What we are seeing in the US is that wages are so low in many fields of employment that workers are having to work 2 or even 3 jobs in order to earn a living wage, hence the term ‘working poor’.
Gina Rinehart says that Australians don’t want to work and as proof she offers up the fact that people in central Africa are working for $2 per day. No one in Australia can survive on $2 per day. The job guarantee has to provide a living wage. To date, the employment schemes set up by our governments typically provides some sort of financial assistance to an employer for a limited period of time to take on an unemployed person. When the money from the government runs out, that person is sacked and the employer takes on a new employee so that the government assistance starts over.
There is actually work to be done. I work in the pubic health system. The number of people requiring our services is increasing, due in part to population increases, people living longer and our increasingly unhealthy lifestyles that are leading to more health problems. But we’re being made to provide the same services to more people with less staff to do the job. We’re seeing more errors that impact upon patients because staff are stressed and being pushed to their limits and beyond on a regular basis. The non-urgent tasks that we are required to do fall behind because our priority is treating patients. So the government can invest more in health to create jobs, reduce the stress on the current staff, reduce errors and provide much needed services to patients. The same can be said of numerous services in various fields. All over our communities we do actually have work that needs doing and services that need to be provided. We’ve got a high level of unemployment comprised mainly of people who do actually want to work. What we need is the funding to pay the wages.
The public service also provides employment to people with disabilities who would have great difficulty finding employment in the private sector. This information is on the Australia Post website:
Australia Post and StarTrack have more than 36,000 employees in addition to around 10,000 licensees, franchisees and mail contractors
6.9% of our workforce has a disability
Total revenue – $6.4 billion
Profit before tax – $103 million
Profit after income tax – $116.2 million
Dividend to Australian Government – $142.3 million
Costs of Community Service Obligations – $203.5 million
It costs the government nothing to run Australia Post and they are receiving a dividend from its operations. It provides employment for tens of thousands of people, including a large number of folks with disabilities, and the government wants to sell it. As soon as its sold jobs will go, no doubt including many of those people with disabilities and the government will no longer receive a dividend each year. Once they have blown through the proceeds from the sale that’s it and as we’ve seen in the past, those proceeds are not always spent wisely. The Howard government for example blew a lot of this money on middle class welfare when it could have been used to provide employment.
Capitalism relies on a high level of unemployment. Business owners want people so desperate that they will work in appalling conditions and for less than a living wage. The biggest advocates are those who will sell their product anyway, regardless of how bad the economy becomes. We need electricity, so Gina will always be able to sell coal, until all of it is gone. Rupert has no competition for many of his media outlets. Even though his income is decreasing for his newspapers and Foxtel, there are still more than enough people buying what he sells. The owners of Walmart are some of the richest people in the US, yet the working conditions for their employees are appalling and wages are extremely low. But Walmart still gets lots of business because their products are cheap and lots of people in the US don’t have much money to spend. The small businesses are more critical of the government’s austerity measures because they are ones hardest hit when people have no money to spend.
Thank you for yours Andrew. Thing is I’m an ignoramus in matters economic and government money. Sure I can manage my household budget, but spend the minimal necessary time on it, so am probably more wasteful than I should be.
Current Neoclassical, Neocon and Modern Monetary Theory (MMT) are just that, theories, along with Keynesian, quantitative monetarism etc. Advocates of each will argue their points in favour of theirs and against the others, just as opponents will argue against.
Having come across MMT in another blog and then more on this blog, then reading into it and some of the posted sources, it seems to me to be the one that makes the most sense and describes the way government finances work, at least at the highest levels of government. This is reinforced by the fact that some countries sovereign in their own currency have been in worse debt and have not left their children and children’s children in dire straights, indeed in many cases these countries have ended better off with increased long term infrastructure and services.
Look at the opposite under Howard, who by racking up record surplus after record surplus, was allowing most major infrastructure and services to run down and shifted debt onto the private sector, to the measure that even Peter Costello said was unsustainable. So it can be argued that governments who rack up surpluses whilst allowing infrastructure and services to run down are the ones leaving their children and children’s children in dire straights, as fixing that will cost them far more down the track than being able to service a debt that is well within the means of the country.
Lee: So… you are saying that it is the goverment’s job to provide the difference between what a company is willing to pay for someone to perform a task (what the job is worth to them) and what someone needs to sustain a lifestyle (what they are willing to work for)? Or have I missed the point again?
Yes you have missed the point. I’m not talking about funding a lifestyle, but providing sufficient income to pay for necessities like a modest roof over the head, clothing, food, basic health care, transport to work, utilities such as gas and electricity, etc. Employees are enabling company CEOs to earn extremely high salaries and share holders to receive generous dividends. Without people who are willing to work, the people at the top don’t have a company to run. Why should those employees be treated like crap and paid a wage that is insufficient to live on while the CEOs and share holders are raking in a fortune due largely to the work performed by their employees?
Successive governments for some time have been obsessed with destroying the public service. This is where the job guarantee should be situated. So much of the previous public sector work which has been contracted out to the private sector is now performed poorly because the private sector is concerned with operating at a profit. There are some public services that do not operate at a profit. So the contractors either don’t provide those services, or else they take short cuts in the provision of their services, which in turn may affect the service offered to clients or in some cases I’ve known the public sector has to redo the work that was done poorly the first time by a private contractor.
The job guarantees in the public sector provide a living wage to the unemployed as well as important training and work experience. These people then have money to spend, much of which is spent in the private sector, thus creating jobs in the private sector. The maintenance of the public service also provides a pool of people in the community with sufficient income to keep spending in the private sector during times when the going gets tough for the private sector.
Increasing Newstart by $50 a week would also give the economy a boost while helping lift people out of poverty and making it more possible for them to get a job.
http://www.theage.com.au/business/the-economy/gdp-australia-enters-income-recession-dollar-dives-as-economy-stalls-20141203-11z2bk.html
Terrific posts, Lee.
Thank you
Yet another big dent in this government’s ego. This quarter’s economic growth was expected to be very strong despite lower commodity prices, and I saw an economic article presciently praising Hockey if that turned out to be the case.
The growth figures were not good, less than half of what the most pessimistic expected. So I expect Hockey to remain in hiding or to come out blaming Labor for not passing his woeful budget. He can’t hide for too long as he has to bring out his MYEFO this month, which will be interesting for a whole lot of reasons, not the least of which will be the amount of utter bullshit it will certainly contain.
I have my red pen ready to go ME
He is out on ABC now with an explanation, this is the new strategy push the ministers and arms of gov out to lie and talk crap instead of Tones all the time….I wonder if he will turn from Smokin Joe back to sweaty Joe 🙂
Lee; A modest roof, etc are a lifestyle… the western lifestyle, other cultures and people choose to live differently… you seem to be confusing desire and custom with necessity. Employee-employer relationship is a symbiotic one… without a company (which exists for profits), the workers would all be working for the government… is that what you want? As I said in an earlier post, if running a company is so easy, and without risk, why isn’t everyone willing to do it? Don’t envy a woman unless you are willing to walk in her stilettos.
With the job guarantee, is that why the government must fund the ABC… the private contractors do a poor job of it?? The employees of the ABC wouldn’t have a job otherwise because they are unemployable by a profit-based organisation??
Andrew,
in case you failed to notice, we live in a western democracy and our citizens are entitled to share in the wealth of our country. A symbiotic relationship implies mutual benefit. It’s called parasitism when one body is sucked dry to make the other fatter.
Ok Andrew, thanks for proving you are a troll. Don’t let the door hit your arse on the way out.
I love the way these people want to take away our national broadcaster but seem quite happy to give Rupert Murdoch almost a billion dollars of our money because he is good at tax evasion.
The Universal Declaration of Human Rights, to which Australia is a signatory (and also helped to draft): http://www.un.org/en/documents/udhr/
Notice that our western lifestyle is recognised by many nations as an international human right.
“I love the way these people want to take away our national broadcaster but seem quite happy to give Rupert Murdoch almost a billion dollars of our money because he is good at tax evasion.”
Add to that invades privacy to the extent where he breaks the law, plus cultivates fear, hatred and lies.
Yes DanDark that’s one thing I’ve been wrong on lately. In the past when things went south for whatever reason, but especially of their own making, the relevant minister would go into hiding, none more so than Abbott, who can disappear for long periods with no explanation. Recently as soon as there’s a whiff of something turning sour they are out there spinning for all its worth.
Methinks the millions being spent on monitoring social media is at play here, as at the same time out come the RWNJ trolls flooding social media and opinion pieces with anti-Labor posts, most of the time digging up things way in the past.
John Kelly …….. thanks for an informative and interesting article ….
And for your post ( December 2, 2014 at 2:43 pm ) ………. excellent.
Am also always interested in just WHO buys up the Government ( Treasury ) Bonds issues. …. I would think the big banks would be first on the list ? …… Overseas interests, big to bigger businesses ?
But then – I stand to be corrected. ….. I am definitely NOT proficient in economics …….
@Kaye Lee: Exactly, so when wages are increased to the point that the government and companies are bled dry, the workers are parasites? Or is the argument that wages increase, so spending increases, so profit increases and the government and companies make an even bigger profit covering the wages (and extra bonuses for the fat cats)?? I’m still obviously confused… what exactly are you advocating, everyone doing their fair share of the work and no-one receiving any benefit or reason to work harder than anyone else? Are we really heading back to communism? What utopia are you trying to take us to?
@Lee: Ok, so yeah we might be getting to the realm of opinion, and perhaps I have taken too much licence with your generosity… and no this is not the group of people I normally associate with… so forgive my fascination with your points of view… rough edges don’t get removed without a little rubbing…. but please name calling?
@Kaye Lee: No, I am not happy about tax evasion… from big corporations to those who do cash jobs on the side (so they don’t pay maintenance or GST)… sooner or later cash is going for this very reason.
@Lee: You do have the right to live how you like… I do not have the right to stop you from attaining them… you are allowed to borrow as much as you like…. Just like I have the right to freedom of speech, doesn’t mean this blog can’t be moderated and my posts banned (I don’t have a right to this platform)… perhaps we would all be happier. The preamble indicates a right to freedom from fear… so the government will take away fears of clowns (like me)? Just because the government shouldn’t restrict something, doesn’t mean it has to provide it freely.
@Annie B: read my posts, and the links others provided for me… if you understand them, try again.
“With the job guarantee, is that why the government must fund the ABC… the private contractors do a poor job of it??”
Well yes actually. I haven’t watched any tv stations apart from ABC and SBS for at least 5 years. I’m not interested in the mindless reality tv shows, shows that are being rerun for the umpteenth time, nor am I interested in football and cricket. The small volume of shows they have that interest me I obtain from overseas long before the local stations telecast them. I don’t take much notice of, much less pay for anything owned by Murdoch because he’s pushing his own biased agenda. Fairfax Media has been drifting to the right in recent years – no surprise there since Gina Rinehart is the biggest shareholder.
Andrew ……. thanks.
I will try and understand what it is I read, when I get a moment to come back and click on the links, and re-read your posts.
………
Andrew,
My problem is that the top 1% now own 48% of all global personal wealth. In Australia it is even worse – Australia’s richest 1% own more wealth than 60% of population while one in seven live in poverty. My problem is that the world’s richest 85 people across the globe share a combined wealth as much as the poorest 3.5 billion of the world’s population.
And who are Tony Abbott and Joe Hockey targeting with their budget?
Add to that in 2011-12, the 75 wealthiest people in Australia paid no income tax.
Gina Rinehart wants Australians to work for $2 per day but she lives in Singapore as a tax dodge. She’s worth over $20 billion. She could give away 19/20 of her wealth, never earn another cent and still live in luxury for the rest of her life. Why is the Abbott government pandering to the Ginas of this world and targeting the poor?
And let’s add that almost a third of companies listed on the ASX 200 pay 10 per cent or less in corporate tax.
This is substantially less than the statutory 30 per cent corporate tax rate.
Some companies, such as James Hardie and Westfield Retail Trust, pay zero tax.
Rupert Murdoch’s 21st Century Fox pays 1 per cent tax and casino group Echo Entertainment pays 5 per cent tax.
The report says the government is losing out on at least $8.4 billion in tax each year, which is substantial but may be the tip of the iceberg.
http://www.abc.net.au/news/2014-09-29/a-third-of-top-australian-companies-pay-less-than-10pc-tax/5775870
But let’s cut family payments and the dole and pensions and dismantle medicare and make universities unaffordable.
And while we are at it we better cut company tax even further so they don’t have to work so hard avoiding paying it.
And let’s pay the workers a pittance while we’re keeping billions for ourselves and our share holders.
Kaye Lee: Not being either insanely rich, nor destitute I’m not sure I qualify to comment, but will point out that capitalism has done more to improve the fortunes of the poor than anything else… as we bought goods from Japan, Korea, Singapore, Taiwan, China… what happened to their standard of living? On the other hand some countries have received massive humanitarian support… has their standard of living improved in the same way?
What do the rich people do with their money? Employ people, buy artwork (that I don’t care for, when a print is just as pretty), pay twice what an item is worth for the brand name on the box… fund hospitals, schools, found universities… Do I wish more rich people did that… YES! http://www.news.com.au/finance/money/who-are-the-worlds-nicest-billionaires/story-e6frfmci-1227142457749 As Spiderman’s dad said “with great power comes great responsibility”… same goes for wealth… I personally would struggle with employing 500 people and feeling responsible for their livelihood (I know my previous employer took that responsibility seriously, to his benefit, but the company’s detriment)… it’s too much responsibility. I don’t envy the rich (well most of the time), and the fact is that if I envied them less, then I would need/desire less, spend less and probably be the happier for it.
Lee: I do agree that people and corporations should pay tax where it is earned… there is a push for this at the moment, and I hope it is fruitful.
Kaye Lee: I suspect the figures you quoted for company tax are exaggerated a little… or do the people reporting it have no ideological barrow to push? I think all missed sources of government revenue should be pursued, loopholes closed, etc. I’m not going to bite on the cuts, except to state that many times things reported as “cuts” were not decreases, but lack of (planned) increases which are not exactly the same thing. Do I wish everyone was gainfully employed, pensioners adequately supported, health and education affordable or available freely, yes I do… if the government get it wrong they will be hammered at the next election…. the 1% rich people don’t control 85% of the votes (unless you are a mining magnate in parliament who you feel you have to vote for or be out of a job… sigh)
We got rid of the carbon tax and the mining tax and the Aussie dollar has dropped about 20% and yet we are seeing investment fall, manufacturing continue to decline, and unemployment rise. In NSW we are still being bombarded with ads of actors wearing beat-up hats saying “My job depends on the mining industry” which is probably true – they employ a hell of a lot of advertising people.
Möbius while the anti labor trolls are digging up the past they are digging their own graves,
Tones is history this soon will be the new future and the more they troll the more damage they are doing to the Lying Liberals, they are just to dumb to realise that, but the polls tell the story and these are looking very sad and sorry for Tones and Co and any amount of bullshit and their Ning Nong trolls they push out the worse the polls will get, Bye Bye Tony…….
Andrew, don’t you think that the consumption of foods, goods and services by millions of low income people creates employment for anyone? Businesses don’t exist without customers.
As for your inappropriate analogy about humanitarian aid, many of those people aided have corrupt governments that won’t help them. No one here is advocating that our country is run like that.
Banned TED Talk: Nick Hanauer “Rich people don’t create jobs”
“Trickle down theory” – The principle that the poor, who must subsist on the table scraps of the rich, can best be served by giving the rich bigger meals.
Oh dear, Chinese workers are being screwed by capitalists too.
http://www.businessweek.com/articles/2014-02-20/behind-chinas-labor-unrest-factory-workers-and-taxi-drivers
“What do the rich people do with their money? Employ people…”
As Lee has linked to above, people like billionaire Nick Hanauer who actually know, disagree with you Andrew. That’s partly what the Job Guarantee is about – putting money into the pockets of the many so they can buy what is produced by all those businesses, enabling those businesses to employ people. How do you expect businesses to thrive if no-one can afford to buy what they have to sell?
As Nick Hanauer succinctly puts it, “The most ironic thing about rising inequality is how completely unnecessary and self-defeating it is. If we do something about it, if we adjust our policies in the way that, say, Franklin D. Roosevelt did during the Great Depression—so that we help the 99 percent and preempt the revolutionaries and crazies, the ones with the pitchforks—that will be the best thing possible for us rich folks, too. It’s not just that we’ll escape with our lives; it’s that we’ll most certainly get even richer.”
http://www.politico.com/magazine/story/2014/06/the-pitchforks-are-coming-for-us-plutocrats-108014.html#.VH7UPMltKGk
Australians are the wealthiest people in the world, according to the Credit Suisse Global Wealth Report 2011, yet the report “Good Times and Philanthropy: Giving by Australia’s Affluent” showed that wealthy Americans allocate 3.8% of income to charities while wealthy Australians give less than 0.5%.
Lee: Watched the TED talk… if you truly believe that, then why all the angst about “middle class welfare”?? According to the presenter, that is the best way to benefit everyone… Also I never stated that the rich create jobs… we all know demand does… if no-one wants the product, there is no job to make it (except the government will step in and pay someone to do it, so we can achieve full employment)… we also know that if you want a secure and well paying job you can do those things that no-one else wants to do…. but here is where the capitalist comes in – they help to see the need, then risk their money to provide a service or product that fills that need… and if they are good, they succeed… no they didn’t “create” the demand (or jobs if you will) as such, but they did fulfill a vital part of the process…. if you have been following along I have already stated that it is our desires and wants that fuel much of this process… The thing is you either force rich people to give up their money (with pitchforks and the like)… or you encourage them to have a heart change and fulfill the obligations of the rich to the poor… which one are you leaning towards? Is being angry and resentful going to change them? Why does Charles Dickens come to mind at this time of year?
I am angry and resentful because the wealthy are NOT fulfilling their obligations. The poor and sick and elderly and unemployed are being asked to fill the gap by tightening their belts even further.
https://www.youtube.com/watch?v=MUBnxqEVKlk
A whistleblower at Gina Rinehart’s Roy Hill iron ore project in Western Australia’s Pilbara region claims workers on 457 visas are working excessive hours and being grossly underpaid.
The whistleblower says up to 200 white-collar 457 visa workers, about half of whom are Korean nationals aged under 30, are clocking up more than 84 hours a week. Many are female.
They are employed by the contractor Samsung C&T and being paid about $16 an hour. Many are not working in the occupations approved for their visas – a breach of the sponsoring employer’s obligations.
What’s that about the largesse of the rich and jobs again?
I should add that Andrew Robb, in his haste to get a signature on a free trade agreement with China, has agreed to allow them to bring in Chinese workers for their projects here.
Kaye Lee: If the 457 visas are being abused then they should be prosecuted to the full extent of the law.
“Many are female”… what’s that got to do with anything?
Oh FFS Andrew stop being so obtuse. Abbott wants to pay rich women to have babies but pay nothing whatsoever to unemployed people under 30 for 6 months. He even wants to withdraw welfare from unemployed pregnant women. And he has the audacity to pretend that he is pro-life. When the poor people get so desperate that they become violent, I hope they target the homes of the Liberal voters first.
Now I’m done with this conversation. It’s quite obvious that you’re not here to learn anything. You’re here to troll.
Andrew the piss ant said “Many are female”… what’s that got to do with anything?
Well geeeeee last time I checked, half the population are women you fool, what a twit and a pretty pathetic one at that
How Much does Tones pay you to push/troll your bullshit Andrew,
he is wasting his money what a waste of space you are on this site….
shut the door on your way out……thanks 🙂
you can only rake up a certain amount of bullshit from the paddock and your paddock of bullshit is is empty by the looks…you are now like a broken record the same shit over and over again……
Annie B, yes banks are the main buyers of bonds mainly to park excess reserves where they can get interest. Also, Institutional investment houses buy them to hedge against their riskier portfolios. There is some overseas buyer interest but as they are sold in $A dollars, OS investors would want to be careful about which way the foreign exchange markets are moving.
Non-resident holdings of Commonwealth Government Securities – 66.1%
Non-resident holdings of Australian Commonwealth Government Bonds – 67.3%
http://aofm.gov.au/statistics/non-resident-holdings/
They also have this spreadsheet
Table 2: Beneficial Ownership by Country of Residence of Australian Government Securities and State Government Securities Guaranteed by the Australian Government
Australia 19.4%
Domestic custodian and nominee companies 66.1%
http://aofm.gov.au/statistics/public-register-of-government-borrowings/
@Lee: the “Many are female” was in the middle of the post stating how bad the abuse of 457 visas was… meanwhile people are trying to claim equality of the sexes… I’m just saying that as the sexes are equal, and should be treated equal, the gender of the 457 visa holders does not belong in a list of offences… It is known that the mining companies prefer women drivers for the big trucks as they tend to be more patient and careful… perhaps those are the roles they are filling? And yes the liberal supporters will be the first homes targeted, because it will never be the liberal supporters marching with pitchforks… too many of them actually believe that you should do unto others as you would have them do to you.
@DanDark: I guess you missed my point… see @Lee above.
@Lee: the “Many are female” was in the middle of the post stating how bad the abuse of 457 visas was…
Kaye was quoting the report from the whistleblower. Why don’t you ask the whistle blower? Perhaps it is linked to the occupation documented on their visas. I notice you focused on the gender. I could argue that their nationality isn’t relevant, nor is their age. But you had to zoom in on gender and get a cheap shot in on women.
How about a look at this from a slightly different perspective?
The old economic models don’t apply in the 21st century
And perhaps a look at what happens when you try to do things Andrew’s way – Kansas 🙄
Sam Brownback’s failed ‘experiment’ puts state on path to penury
@John Kelly – ( your reply December 3, 2014 at 11:36 pm ) ……..
Thank you for taking the time to reply to my question. I am not too good with the economics !! Know a fraction, and that’s about it.
—–
@ Kaye Lee —— thanks too for the stats and link.
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@ Andrew …… ( your comment, in part – December 4, 2014 at 9:18 am ) ……. ” >>>> it will never be the liberal supporters marching with pitchforks… too many of them actually believe that you should do unto others as you would have them do to you. ”
I have to take that as a wry comment from you – almost an attempt at humour. ? Do unto others, etc ? …….. Something, then – has gone awfully amiss with the Liberal party – and followers, beliefs. ….. But then, we know that already.
Libs are indeed ‘ doing unto others ( cruelly ) ‘ …… but would certainly NOT like to have the same done to them. If it were – they’d be the first out their doors, with more than pitchforks !!!
………..
From Randall Wray’s blog 2 days ago: The answer to the unemployment problem is more jobs.
http://www.economonitor.com/lrwray/2014/12/02/the-answer-to-the-unemployment-problem-is-more-jobs/
Rut ro. Bill Mitchell’s blog today. This is a real worry. Bankers just might find themselves being killed by disgruntled customers if this happens.
http://bilbo.economicoutlook.net/blog/?p=29645 The Cyprus confiscation becomes the model for bank insolvency.