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Tag Archives: recession

ScoMo no leader at all.

Capping a week of wacky stunts is Drug-test dole Bludgers a first episode in The Return of the Undead, a schlock-horror series in which the commonwealth is attacked by zombies; bad policy ideas the Coalition has already killed off. Twice. Or so we thought. Totally lacking policy or even vaguely useful ideas, the Morrison government digs up its dead, while dodging shocking reviews of its theatre of cruelty drama, Tamil Family.

Dole Bludgers helps deflect us from Did Treasury shrink the Economy? a Frydenberg-Lowe whodunnit playing centre stage, helped out by “Police State 2.0″ a cop-show sequel involving more raids on whistle-blowers’ homes.

Secrecy, mystery and shock are key to ScoMo’s Police State 2.0, which, like Monty Python’s Spanish Inquisition, thrives on fear and surprise. All we see is a dawn raid. Cops haul black polythene bags. “As this is an ongoing matter, it would not be appropriate to comment further at this time,” an AFP “spokesperson” intones.

Weird? Normal procedure for the AFP, as veteran Canberra Times editor, Jack Waterford, observes, is to tip off selected journalists well in advance of any raid. Not so much better sound but great optics.   Waterford notes,

“It is part of the AFP’s media modus operandi to claim that operational or sub judice considerations prevent it from discussing anything damaging to the force’s image. Such considerations never inhibit the AFP if it expects good publicity from trusted journalists.” Uncannily, ScoMo & Co follow much the same protocol.

This week, Home Affairs Minister Dutton and Morrison are free with all kinds of abuse to help their case, even though the Biloela family would normally be off limits as “an operational matter” or “an individual case”. By Friday, even though the case is before the Federal Court, Dutton tells Nine,

“I would like the family to accept that they are not refugees, they’re not owed protection by our country.”

Yet the same day, Federal Court judge, Justice Mordecai Bromberg, orders Immigration Minister, David Coleman, to provide more evidence to support claims the youngest child has no right to protection. This case returns to court for an interlocutory hearing, 18 September, but a full and final hearing will require extensive preparation. An increasingly out of control Dutton would do well to pull his head in; take a hint from his pals in the AFP.

Suddenly it’s clear that ScoMo has even less power over Dutton than Turnbull, who created Home Affairs just to appease Dutton and his monkey-pod cabal. His capitulation to the bullies, condemned by experts then, is an utter failure now. Above all if we’re going get Police State 2.0 right, the AFP, need to know which boss gives the orders.

The AFP has an unblemished record of being lapdog of the government of the day. Only once in thirty-eight years since its inception has it embarrassed a government. The exception is the case of the investigation and prosecution of Liberal renegade – and Labor-appointed speaker, Peter Slipper, which did not result in a conviction.

The AFP keeps mum on Wednesday’s raid of the Canberra home of a diplomat and defence adviser, Cameron Gill, reports the Canberra Times. But the optics are eloquent. Shots of a burly plain-clothes cop, carrying a couple of black garbage bags or loading the bags into the boot of a black car look ominous at least. “AFP cleans up democracy while trashing Gill’s reputation” is the main pictorial message implied on national news.

“Enacting laws in the name of national security without testing them can result in overreach and the erosion of basic freedoms,” warns Australian Law Council president, Arthur Moses, in his natter to the National Press Club.

Australia leads the free world in beefing up existing and creating world-class, new anti-terror and security laws. In the eighteen years since September 11, 2001, we have encumbered ourselves with no fewer than 54 new laws.

“There’s been a massive amount of legislation passed that prior to then (2011) would have been unthinkable”, Pauline Wright, President of the NSW Council for Civil Liberties says.There have been incursions into freedom of speech, freedom of press, freedom of movement, right to protest, all basic legal rights that underpin our democracy”. It’s almost as if she’s stumbled on the real point of the war on terror.

“Do not be quiet Australians. That is not your job,” warns Moses to the assembled hacks and flacks.

Moses is keen for reporters to “continue questioning” the Commonwealth’s growing national security powers, and “not just those that are threats to your freedoms”. Yet News Corp, from which all other media take their lead, has been actively encouraging the Coalition’s radical expansion of a police state in Australia in the last six years.

Drug test … is more than a government out of ideas. It blends ScoMo & Co’s yen for mindless cruelty, with its signature impracticality – as seen, for example, in its coal fetish. Blend in its shouty populist campaign to deprive the poor and vulnerable of any form of support, let alone compassion – and the drug test ploy may just upstage news that not only have ScoMo & Co given us the worst financial year since 1990-91, they have no plan.

“We have a plan – and only the Coalition has a plan” is Matthias Cormann’s mantra. But there is no plan. Greg Jericho calls on the government to wake up.

“It spent the entire election campaign telling us the economy was strong despite clear evidence that was not the case, and now in the light of some of the worst economic growth figures this century it would have us believe all is going to plan.”

Alan Austin notes “The increase in GDP for the June quarter, announced by the Australian Bureau of Statistics yesterday, was a miserable 0.48%. This brings annual GDP growth to just 1.44% for the year to the end of June if we use seasonally adjusted figures. Trend data, preferred by some, show even worse outcomes.

This is the lowest annual growth for a financial year since 2002-03, during the early 2000s global recession. Prior to that, the year with lower growth than now was back in 1991 during Paul Keating’s “recession we had to have”.

ScoMo calls on us to spend our way into prosperity. But what with? With frozen wages, lost penalty rates, rising utility and fuel costs, not to mention a steep hike in fruit and vegetable prices, given drought, flood and heat has cut supplies, means most households will use their meagre tax refund to pay down debt and on daily essentials.

But look over there! A drug test for Centrelink beneficiaries beckons.

Enter the trial drug testing of 5,000 new recipients of Newstart Allowance and Youth Allowance.  Job-seekers would be tested for a range of illegal drugs in a two-year trial at three locations – Logan, Queensland, Canterbury-Bankstown, NSW and Mandurah, WA. Vital trial details are scarce in the news cycle.

The drug test idea is a neat way to scapegoat those trapped in a cycle of poverty. It recycles a farrago of Liberal lies: job-seekers are not only unsuccessful because they are high on drugs, they are also decadent. Unworthy – a popular slur also seen in refugee demonising. Un-Australian. Seeking pleasure instead of work?

The best form of welfare is a job, ScoMo crows. 722,000 Aussies struggled to get by on Newstart’s $278 per week or less than forty dollars a day in August. ABS figures show expenses, especially rising fuel prices – up 4.5% mean we are going backwards. Half a million of us haven’t worked for over 12 months. ScoMo’s “conservative compassion” means job-seekers just don’t eat; 84 percent of unemployed workers report skipping meals.

Implied in ScoMo’s slogan is a rebuke; neoliberalism’s favourite lie, there are plenty of jobs out there- all you have to do is try harder/re-skill/move to the regions/not be a job snob. It’s absurd but hurtful; cruel nonsense.

It’s not just that are far fewer jobs than job applicants, while jobs are increasingly casual, part time and wage theft and underemployment is rife, drug-testing of welfare recipients has failed everywhere it’s been tried.  And the Abbott-Turnbull-Morrison show knows it’s a failure, as Josh Butler in The Huffington Post pointed out in 2017.

Jurisdictions in Canada and the U.K. proposed then scrapped the idea. In the US, a few states gave up their trials as few as 0.01 percent of those tested actually returned positive drug tests. Above all, an Australian government-funded report from 2013 found there was “no evidence” of any positive effects in drug testing welfare clients, citing social, economic, legal and ethical concerns which meant such a scheme “ought not be considered”.

But “Just because something has been trialled elsewhere and has not worked does not mean it should not be tried again,” argues Senator Scott Ryan, for the Minister for Social Services. No. Just don’t expect it to work.

Drug-testing for welfare recipients was first proposed in the bizarre, 2014 Abbott-Credlin incarnation of the current government and again by the Turnbull iteration. It’s a great distraction from the imminent nation-wide trial of the Indue cashless debit card, a scam also known as “The Healthy Welfare Card” which is not a success in any trials. Still, it is a nifty business enterprise which could return $12,000 to the Liberal Party for each card issued.

Despite the dead cat on the table of the drug test (trial), ScoMo still cannot hide this week’s shocking GDP data.

Stalling Australia’s economic growth has taken six years of hard work. Morrison, in particular, can take a bow.

As Treasurer, he did keep barking that we did not have a revenue problem. No? Now most households do. And we carry record debt. A tax cut won’t help us. We are in per capita recession even if the government insists on applying US Census boffin, Julius Shiskin’s, yard stick of two consecutive quarters of negative growth.

Former RBA Governor Glenn Stevens says it’s, “not very useful”. Proposed in December 1974 by Julius Shishkin, then head of the Economic Research and Analysis Division of the US Census Bureau which publishes the US national accounts, it’s not used to identify recessions in the US. Saul Eslake points out,

It takes no account of differences over time, or as between countries, in the rates of growth of either population or productivity – which are the key determinants of whether a given rate of economic growth is sufficient to prevent a sharp rise in unemployment. This is something which most people (other than economists) would use to delineate a recession.

In brief, we are fooling ourselves, or allowing ourselves to be fooled, by an esoteric measure of what a recession is. By most other measures, we would be calling what Morrison and Frydenberg have engineered, a recession, now. Calling for Frydenberg to resign. As The Guardian Australia‘s Paul Jericho reports,

The 2018-19 financial year had the lowest growth since 2000-01, and it was the eighth worst year out of the 60 since 1960. In the past 35 financial years, only five have seen worse per-capita growth, and in the past 40 only four have seen lower productivity growth.

Happily, there’s always a Liberal love-in happening somewhere to take the sting out of the hard going. ScoMo insults half the population in one gaffe as he addresses the faction-ridden boys’ club of the NSW Liberal Party’s State Council in NSW, weekend conference, its “most vicious” for twenty years. It’s in uproar over abortion.

It almost upstages Monday’s fuss when the PM, Communications minister Paul Fletcher, Birmo and Senator Jane Hume and sundry other Liberal MPs rock up to a function held by Channel Nine at its Willoughby studios.

Nothing to see here, says ScoMo, “I mean they were happy to host an event and I attended an event.”  Prince Andrew could use the same defence of a photo of himself and a seventeen year old girl at a Jeffrey Epstein event.

Except it was a ten-thousand dollar a head Liberal Party fund-raiser which makes a mockery of Nine Newspapers, formerly Fairfax rags’ slogan “Independent Always”. Luckily, everything is OK, because, as CEO Marks explains, the shindig gave Nine time to voice its deep concern over press freedom while it raised money for the Liberals.

Michelle Grattan says it’s bizarre to engage with a government on press freedom, by raking in $100,000 in funds for it. Clearly she’s yet to get into the Trump-Morrison zeitgeist where the press is free to say whatever the government is OK with. This argument is made by Home Affairs Secretary, Mike Pezzullo in senate estimates.

Fortunately, by Saturday, the PM can change the agenda to gender. How Liberal ladies can step up to the plate.

Pro-lifers protest outside the International Convention Centre whilst inside, right-wing Liberals who wish to keep the current bad law, move a vote to allow debate on decriminalising abortion, a bid that threatens to de-rail the Berejiklian government’s bill to make abortion legal in NSW – as it is in all other states. The vote is lost 217-236.

The bill passed the NSW lower house 59 to 31, a month ago, but it created a split within the Liberals. 19 of the party’s 35 MPs voted against it.  Veteran public ethicists, “barking” Barnaby Joyce and “two-bob” Tony Abbott also protest, support which Sydney lawyer, Michael Bradley, writing in Crikey claims, augurs well for the reformers,

“It was sexist paternalism and disrespect that made abortion a crime and has kept it thus for so long. It is this same instinct that seeks to delay and confuse the remediation of that wrong. But, whether because of or despite the Tony/Barnaby Effect, it will shortly lose this battle.”

Amendments proposed will be considered when the NSW Upper House votes on the bill 17 September. Many of these appear to be disingenuous delaying tactics, including fears that a woman will use abortion to select the sex of her baby, a phenomenon that has never occurred elsewhere in the world. So why would it happen here?

ScoMo’s keynote address is about merit. Up to a higher plane. “I want to see more women in our parliament and I want to see the NSW division work with me and my team to deliver that on merit, on merit, that’s the key.”

ScoMo alienates half his audience with his gaffe.

Who better to lecture Liberals on merit and equity than ScoMo? His advocacy for women is now the stuff of Liberal Party legend. He’s got daughters, he says. Enough said. And, my, just look at the way he acted on serious allegations of a party culture of misogyny and bullying, which came to a head around last year’s spontaneous hands-free leadership spill that accidentally, led to ScoMo becoming PM – and without any plotting, lobbying or double-double-crossing. So he says. It caused at least one MP, Julia Banks to resign.

All packed off to an inquiry or review or report or something. And denial from Linda Reynolds who has now gone on to do a mighty job in Defence and Sarah Henderson, who is parachuted back into parliament into former Senator Mitch Fifield’s policy-free Victorian senate seat, this Sunday, despite smears and slurs from religious groups following her support of marriage equality.

Henderson’s not beaten Sophie Mirabella’s hubby, Greg, more of a conservative, but she’s battled vicious email. One accused her of being “a Malcolm Turnbull, gay marriage and abortion supporter”. Unholy Trinity.

Sunday, she wins a 234-197 a vote from five hundred Liberal Party delegates to the NSW conference. Despite intense lobbying from government MPs, the result still suggests as deep a division in Victoria between small ‘l’ liberal Liberals and the rip-roaring right as in NSW. In the end, however, ScoMo has one more token woman MP.

So it’s fitting the PM should be there. Not for the abortion vote – he’s pro-life – but as a father figure who can tell Liberal women they just need to improve their merit; lift their game and work on their CVs, their networking and interview skills. It’s an old lie but it helps explain why today there is the same number of women Liberal MPs as there was in 1996. At the end of the end of the day was it Henderson’s merit or ScoMo’s orchestrated lobbying?

Women everywhere will be chuffed to know that our current crop of mostly male Liberal MPs is a meritocracy.

Merit just shines out of Josh Frydenberg, this week, for one, as he tries to fudge the worst set of GDP figures this century, while blaming Treasury for not getting its forecasts right. And claiming he and his government did.

Merit is also the word that leaps to mind to describe the work of Stuart “Rolex” Robert whose business empire is in a big chill this week, according to reports that he and his partner may lose over $400,000 due to the tragic collapse of Cryo Australia, one of his cooler company investments which have attracted the interest of ASIC.

No inference is given nor suggestion made that Robert has done anything wrong in relation to Cryo Australia, which offered customers therapy sessions in a human-sized cooler. When it was working. Robert does seem dogged by business troubles, however, and it just bad luck given his cabinet role and his duties in charge of both government services and NDIS, two portfolios, which demand sound judgement and due diligence.

Liquidators are investigating whether crimes may have been committed by directors of the company, Cryo Australia, where Robert briefly sat on the board alongside rapist Neran De Silva, reports The Guardian Australia.

“Merit” Morrison himself, whose MPs snubbed rival contender for PM, Julie Bishop, because the blokes said she was a lightweight, won Cook in Sydney’s Sutherland Shire, fair and square with just a little bit of help from The Daily Telegraph’s, four article slander of Michael Towke, a Lebanese Christian Australian, who, in July 2011, was democratically pre-selected rival in Cook- until he was disendorsed by the Party after the articles were published.

Dazzled by the display of merit currently on show in the Liberal party room of our faux-Coalition, an unrepresentative secret agreement which includes a mandatory quota at its core, it’s difficult to tell whether the women members of the Liberal Party are laughing or crying. Just don’t expect a petticoat revolution just yet.

In the meantime, despite its diversions, the week exposes the Morrison government’s false claim to any economic expertise.  It is just another Coalition government; hopeless with money, clueless about women or gender equity, run by the top end of town for the top end of town and increasingly keen to control us by drawing us into the politics of division, unreason and fear.

Helping this control is the apparatus of a police state developed under the aegis of a war on terror, which like the war on drugs, is another toxic US import which can only cause us harm – as it has caused that nation immeasurable suffering and created unimaginable death and destruction for millions of others it has illegally invaded.

The threatened deportation of the Biloela family is an act of gratuitous, if not shockingly sadistic, cruelty which demeans us all. If the Tamil family are returned to Sri Lanka, they will be imprisoned and tortured. Yet even if they were to escape this fate, repatriation would be immoral, illegal under international law preventing refoulement and egregiously wrong in its calculated lack of humanity.

What kind of monsters have we become when we seek to punish innocents, make an example of a traumatised family who have already endured unfathomable suffering whose only mistake is to throw themselves on our mercy and seek our compassion?

Morrison must get Dutton to rescind his decision. Unless he can show the moral courage and the authority to act decisively on this, he is no leader at all.

The only budget emergency is the budget itself

The Hockey budget is an emergency in itself, writes John Corby. Such an emergency, to the extent that it could in fact be recessionary.

We have been told that we are in a financial crisis and that we must all help to restore the disaster caused by the previous government. This contravenes the views of the 25 leading Australian Economists surveyed in the Sydney Morning Herald on July 16 who believe that we are in fact in a very strong financial position with a most manageable deficit of 21.51% of GDP.  Our deficit is far more manageable than virtually all other counties in the western world. These were not “left wing loonies” but were economists from many of Australia’s most respected companies. (See “Economists rubbish talk of debt crisis”).

However, perhaps Joe Hockey (who has a BA in Arts and Law, not economics) is correct and he knows more than all of these Economists, and more than Nobel Prize winning US economist Joseph Stieglitz. Perhaps we really must pull all stops out to fix the deficit immediately in the most direct and effective way to get the economy back on track. Is the 2014 budget going to do this, and will it stimulate the economy in the long run?  I say absolutely not. The government’s own calculations don’t suggest that it will make big inroads into the deficit even if the Senate does pass all measures.

My concern is what I believe will to be the negative effect on the economy that this budget will cause. I don’t see any of these measures stimulating our economy at all, in fact I see that some of the measures will have the opposite effect and will work to retard economic growth.

The decision to force the unemployed 18 to 30 year olds into 6 months out of every 12 with no income support might stimulate the security sector (as this will mean that 1 in 8 people in this group who are not involved in education will be destitute and will probably need to resort to crime to survive).  We will probably need more police, but this will increase government costs, not reduce them. It will however create jobs. (1 in 8 is based on the 12% unemployment level in this sector at the moment.  I believe it is likely to increase so this is a conservative estimate).

The government’s decision to “bury their heads” regarding the huge growth potential of the alternative energy sector will most certainly put Australia behind the 8 ball and force us to export our innovators and import the innovations, after all no one could even entertain the belief that the price of: electricity, petrol, gas, and the other fossil fuels will decrease, regardless of the environment.

These are minor economic concerns compared to what I see as the major problem.  It seems to me that the real damage to our economy will come from the decision to deregulate university fees and change the way student loans are treated.  University graduates traditionally make up a large part of our middle class.  All professional people are university educated.  They are the ones who have a reasonable level of disposable income.  They buy their own homes, regularly eat out at restaurants, go on holidays, turn over their cars every few years and buy new clothes each season.  They play a very important roll in keeping the wheels of our economy turning.  Their demand for goods and services fuels the economy more than any other sector because of their number and the size of their disposable income.

The very rich are a much smaller group within society but they still only eat the same number of meals and wear the same number of clothes. They may own more houses and more cars and have more holidays, but their consumption certainly doesn’t impact the economy to anything like the extent that the middle class does, because there are not many of them.

They are, however the ones that own the businesses and make the decisions on the boards of the companies that employ many of the people. The companies involved in: retail, wholesale, manufacturing, service and primary industry are all demand driven. If there is no demand for something, there is no financial benefit in providing it. If demand for something drops there will be a corresponding drop in the need for people to be employed to provide that particular good or service. Those making financial decisions on the boards of our large companies, or those individuals making decisions for their small and medium sized businesses must respond to the market. If they don’t, they will fail in industry. The market works on demand. No one will employ people based on the good of the country, only on the good of the company.

This brings me back to the deregulation of university fees.

Wealthy people will pay up front to send their children to universities and these graduates will be able to continue their privileged life styles and consume at the rate you would expect. Those that have to borrow to go to university will be in a completely different situation. Not only will their debt be higher than it has been for previous graduates, but there will be an urgent need to pay it off as quickly as possible to avoid the mounting compound interest. Previous graduates owed HECS to the government and were charged at an annual interest rate matched to the CPI, so in effect the size of their debt never increased (in real terms). The next generation will be charged at a 6% compound interest (and this may increase). This means that their unpaid debt would be spiraling upwards.

Although no one knows what the deregulated charges for universities will be, it is certainly going to bring about a substantial fee increase. Graduates would be leaving university with large debts but no assets or income. Their ability to secure a housing loan or other personal loan would be greatly reduced and the pressure to repay the debt before the interest mounts would be enormous. The disposable income of this huge part of society will dry up and the knock on effect will be profound. If there is a substantial drop in demand for: new houses, cars, holidays, restaurants, high end electronics, and the likes, there will be a corresponding huge drop in the supply of these things. This means many businesses will close or scale down. The result must be increased unemployment and negative growth. This budget appears to me to be a sure way to lead to a recession.

Like Mr. Hockey, I am no economist. I proudly received an award for economics in Year 12 but I have spent the rest of my life following other pursuits. I would, however, like someone to explain to me where my logic is flawed and where the economic benefit of this budget actually is. I believe that there certainly is a budget emergency but the emergency is not one left by the previous government, it is one that will eventuate over time because of the current budget.

Australia is NOT an economic basket case

Image by smh.com.au

Image by smh.com.au

Australia is not an economic basket case and the deficit to be announced in the upcoming budget is not the end of the world. Matthew Donovan reports.

MANY OF THE regulars on Independent Australia, you will know by now I am determined to make sure indisputable facts enter the national debate this election year.

I have recently written about how we are the lucky country and why we are being deceived on debt, but it seems the tendency to revert to gloom about our economy persists.

The facts about our budget – expenses versus revenues – just don’t seem to be cutting through. The fact that we came through the Global Financial Crisis (GFC) stronger than almost any other country doesn’t seem to get a hearing.

I take this opportunity to remind people that Australia was the only country in the developed world not to enter recession between 2008 and 2010.

In fact, Australia has not entered recession since 1991. A world record of 21 years, which we achieved last year.

The recent hysteria regarding the deficit that is predicted in the next budget only serves to frustrate me further.

It is for the above reasons I decided to write this article, outlining in simple terms what has happened in our economy since late 2008, when Lehman Brothers collapsed in the United States. (more…)

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