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Tag Archives: Wayne Swan

The Coalition and Financial Management … an Oxymoron

Poor Joe Hockey! One could be sucked in to feeling sorry for him … not! The Government’s election promise, the much touted public service staff cuts of 12,000, has vaporised. Joe can’t implement this promise because Labor beat him to the punch. The public service efficiency dividend, a mechanism governments of both persuasions have been using for the past 30 years, has already factored in cuts of 14,500. There is no more efficiency room left unless huge chunks of government delivered services are contracted out to private companies. What a blow! You would think Joe would be happy about that. Labor has inadvertently fulfilled one of the Coalition’s election promises. Is he happy? Not our Joe. He now has to look for other cost saving measures to avoid an increase in the budget deficit and further borrowings. You would have thought the Coalition, these economic gurus, would have known this long before they announced their pre-election promise. It’s not as if it was a secret. It was in the previous government’s budget papers. Someone in the Coalition was sleeping on the job.

So, where to now?

Sooner, rather than later, Joe and the Government are going to have to own the budget. They will have to accept responsibility for the state of our finances. By next May when the next budget is handed down it will belong to Joe and blaming Labor just won’t wash anymore. Then we shall see the cut of his jib. The May budget will certainly show yet another deficit of around $40 billion; one similar to what we have become use to under Labor. I suspect, also, it is going to contain some unpopular cuts involving broken election promises for which there will be a myriad of excuses. Why? Because Joe and the Coalition will be seen to be no better at raising revenue than Wayne Swan and Labor and that’s going to hurt him, personally. Joe spent a lot of time and energy telling us about fiscal mismanagement, budget emergencies and other bits and pieces. To be cast as just another Wayne Swan won’t go down well.

Economics is not an exact science. It relies on a whole host of uncertainties. There’s a lot of guesswork, estimating, crystal ball gazing and most important of all, events not yet known. Kevin Rudd learned that the hard way; his unexpected event was the GFC. Perhaps another GFC-like event is just around the corner, who knows. But whatever happens, it will belong to Joe Hockey. He won’t be able to blame any subsequent economic ills on Labor. It will be a good test of the false public perception that the Liberals are the better economic managers.

Who started that rumour anyway?

Matt Wade from the Sunday Age in his article, ‘Our National Journey to Prosperity‘ (24 Nov ‘13) highlights the beginning of Australia’s rise to world prominence in wealth, health and education which began when Bob Hawke became Prime Minister in 1983. Just prior to that, we were a basket case under the former Coalition Treasurer, John Howard. Paul Keating became the new Labor treasurer and over the next decade restructured our economy in five critical areas. It was the floating of the Australian dollar, which Reserve Bank governor Glen Stevens recently described as, ‘‘one of most profound economic policy decisions in Australia’s modern history’’, together with tariff reductions, de-regulation of the banking system, the trade union and labour market accords and the independence of the Reserve Bank that changed the Australian economic scene and our way of life, generally.

When talking about events, the next foreseeable one is the Indonesian Presidential elections in 2014. By the time that is decided, Tony Abbott will know just how good a friend President Susilo Bambang Yudhoyono was to us and how difficult it is going to be with the incoming president, whoever that might be. None of the candidates are particularly disposed toward us. This will create additional problems for Joe Hockey because he will have to re-visit all of our foreign aid commitments and find some grovel money albeit after just cutting the foreign aid budget to the bone. Tough times lay ahead for Joe and they have nothing to do with the six years Labor was in office. The repeal of the carbon tax might get through the senate next year although that is not a certainty. If it does, all revenue from that will cease as will the pittance coming from the mining tax. This is, of course, the government forsaking revenue to honour a promise they think helped win them office. But, most painful of all, as the Indonesian economy continues to gather strength and our near neighbour becomes the third Asian tiger, Australia will be denied access to valuable markets in favour of other friendlier nations. That is going to hurt us … big time.

So let me do a little crystal ball gazing of my own. Joe Hockey is the new John Howard (the 1982 version). Over the next six years the Coalition is going to systematically stuff up the Australian economy and re-define the parameters of fiscal ineptness pushing the national debt out beyond $500 billion. Why? Because they don’t have a vision for the future. They govern for today; they think tomorrow will take care of itself. Well, this time they won’t have a mining boom to mask their collective lack of ability which will translate economically into a probable recession and massive unemployment. Consequently, around 2019, if not before, Australia will be back where it was in 1982 and Labor will once again be invited back into office to clean up the mess.

And those misguided voters who thought the Coalition were the better financial managers, will scratch their heads and seek psychiatric counseling. History doesn’t lie.

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It’s official: Joe Hockey has lost the plot!

With the announcement that the Reserve Bank is tipped to cut rates today, Joe Hockey has pounced:

Mr Hockey says the expected cut shows Labor has lost control of the economy.

But, he adds:

“Of course interest rates on average should be lower but if interest rates come down today it is because the economy is struggling, not because it’s doing well,” he told ABC radio on Tuesday morning.

Is it just me, or does the above statement make absolutely no sense or offer no logic whatsoever? Have I missed something? Or has Joe Hockey finally made it publicly clear that he has well and truly lost the plot?

I suspected all along that he lost the plot eons ago. His history of erratic announcements on interest rates confirm this. And no matter what happens to interest rates today, he will see it as a result of bad government.

Last January I published Wiping the egg off Joe Hockey’s face where I showed he is all over the shop when it comes to talking about – or knowing about – interest rates. Given his latest gaffe it is fitting that I reprint the article (and the rantings of this laughable man) below. He has history.

Enjoy!

The Prime Minister’s early announcement that the election will be held on September 14 relegates the recent Liberal Party’s ‘Our Plan: Real Solutions for all Australians’ to the waste paper basket. It probably belonged there anyway; offering nothing but statements and bereft of strategies. They’ll be busy coming up with something more substantial over the coming weeks, one would expect.

I also expect they will retain this commitment from the Plan:

The Coalition will protect the Australian economy from economic shocks and create the conditions which keep interest rates as low as possible . . .

I wonder if Joe Hockey knows about this. Was he even consulted? Is the party aware that Joe has been telling us for some time now that interest rate cuts are a bad, bad thing?

Or maybe Joe was consulted about the Plan a couple of years ago when he trumpeted that interest rate cuts were a good thing.

After all, in August 2010 he told us he wanted them to come down:

. . . what I did say is I would want to see the Reserve Bank move further in cutting interest rates.

Then in September 2010 the thought of rising interest rates made him livid and it was all the Government’s fault:

The Gillard Government must accept the blame for higher interest rates.

History tells us that the rates were put on hold that month, incidentally. But Joe was livid nonetheless.

In November 2010 after a rate rise he was still livid:

Australian families were the victims of a government who was no longer talking about interest rate rises, childcare costs and other costs of living, Mr Hockey said.

Families would struggle to buy Christmas presents, he said.

“It hasn’t been the usual practice of the Reserve Bank to increase interest rates in December because that is like a body blow to the heart of retail in Australia.

“But that body blow has been delivered, it’s been delivered by the Reserve Bank, by the banks and it’s all come about by this government.”

Fast forward to his 2011 Budget Reply Speech a more relaxed Mr Hockey told Parliament that:

. . . this Budget does nothing to reduce the upward pressure on interest rates.

Funnily, however, there were no rate rises in 2011 up to the day of his reply. But he was about to get livid again.

On Oct 1 2011 in anticipation of an increase he pointed the fickle finger of blame at the Government:

Of course the Reserve Bank should not be increasing interest rates tomorrow, but if they do then it will be Julia Gillard and Wayne Swan’s interest rate increase because they have done nothing to address core underlying inflation pressures.

Guess what? They never went up. Nothing to blame the Government for after all. Good try though.

Like all hard working Australians he announced on Jan 27 2012 he wanted the RBA to cut rates:

“I think the Reserve Bank has the capacity to do much of the initial heavy lifting and to stimulate economic growth by reducing interest rates.”

And he alone could save us when on March 27 2012 he proudly announced that:

He would work though on realising lower interest rates that would prop up the finances of many Australian households.

But . . . when they did come down, on May 11 2012 he was back to his livid self:

. . . shadow treasurer Joe Hockey said the rate cut was a sign that the Government had lost control of the economy.

Yet he left us dumfounded on June 4 2012:

Opposition treasury spokesman Joe Hockey has conceded Australia’s economy is in reasonable shape and endorsed Wayne Swan’s commitment to returning the budget to surplus.

Speaking to an international audience on Bloomberg TV, Mr Hockey said Australia was vulnerable “like everyone else”, but its economic fundamentals were strong.

“Australia is in a better position than most other western nations,” he told Bloomberg’s Asia Edge program.

“We have an unemployment rate of around 5 per cent, we have strong demand for our commodities and even though they probably won’t get there we have a government that at least is promising to deliver a surplus budget.”

[yet] When the Reserve Bank lowered interest rates by 50 basis points last month, Mr Hockey said it confirmed the “weakness in the Australian economy”. In his budget reply he said economic growth under Labor had been “very poor”.

The very next day, after a rate cut he sniggered to the adoring media that:

The Reserve makes clear it is worried about Australia’s underperforming economy and deteriorating international conditions.

But before the month was over they were apparently going up according to Mr Hockey:

Well you know what’s interesting . . . we’ve been saying this for three years now, that if the government actually delivers a surplus then it’s going to take upward pressure off interest rates.

Which is good, because it fits in with his Nov 2010 prediction:

Australia is set for high interest rates.

And also in November that year after an increase he declared:

. . . the Gillard government and its ”insipidly weak Treasurer” owned the interest rate rises.

And when we didn’t get a cut he laments in June 2012 that:

“A week ago Australians were expecting an interest rate cut – now they are facing interest rises. That undermines consumer confidence, it undermines business confidence and it leaves Australians fighting higher prices.”

But when the rates went down on Oct 2 2012 it was back to the Government’s fault again:

The Reserve Bank has cut interest rates today not because the economy is doing well, but because parts of the economy are doing it tough.

And on Oct 10 last year he took on a dire tone:

Last week’s reduction in the cash rate, to 3.25 per cent, took it to levels only one cut away from the lows reached during the financial crisis. The Reserve Bank are cutting interest rates not because the Australian economy is doing well but because the Australian economy is deteriorating.

But also in October 2012 we learn he wished for an interest rate cut and his wish was rewarded. And he was happy:

Last Tuesday, at the Elmore Field Days, he called on the Reserve Bank to drop interest rates.

And lo and behold, an hour or so later, that’s just what the bank did.

So chuffed was Big Joe, he grabbed a tractor and raised it above his head, roaring King Kong style.

OK, it’s a toy tractor.

And when they don’t go down we get this statement on Nov 6 2012 to blame the Government for them being put on hold:

Joe Hockey claims the Reserve Bank did not reduce the cash rate because the economy is overheating:

‘This shows it is now manifestly clear that it is the policies of this government which are pushing up the cost of living and staying the Reserve’s hand in delivering further interest rate relief to home buyers and small businesses.’

Again in November last year:

. . . the carbon tax is going to make it harder to cut interest rates.

But he doesn’t like them being cut. Remember? It means the country’s in a mess and it’s all Labor’s fault.

Such as it was with this announcement on Dec 4 2012:

The Reserve Bank has today cut the cash rate from 3.25% to 3%. Clearly the Reserve Bank is trying to catch a falling Australian economy . . .

Followed by this the very next day:

The Federal Opposition says the RBA rate cut foreshadows tough times ahead for the Australian economy.

Coalition treasury spokesman Joe Hockey says the move shows the RBA is intervening to counter Labor’s big spending policies like the promised Gonski education reforms and the National Disability Insurance Scheme (NDIS).

But he’s not alone. When joined by his boss in June last year:

Alas, Hockey was (inexplicably) joined at that press conference by Abbott, which reduced the average economic IQ of the room by 20 points. Abbott proceeded to lay out his understanding of the rate cut. Abbott thought the RBA had cut rates because “economic conditions are soft. The stock market is down. Profits are weak. Retail sales are weak. The property market is down.” Glenn Stevens’ statement that the bank had cut rates because of “modest” domestic growth, a weakening international environment and low inflation was politely ignored.

Yep, it’s all the Government’s fault. It’s only good if cuts come under a Coalition Government. To repeat the old Liberal meme, here’s what Joe had to say back on Aug 9 2010:

Mr Hockey also argued “interest rates are always lower” under the Coalition – an argument described by Mr Swan as one of the “bigger distortions” he’s heard in recent times.

Laughable, isn’t it?

I like what Leigh Sales asked him on the 7:30 Report on Nov 1 2011:

So, how come when interest rates go down the Government never gets credit, but when they go up it’s always the Government’s fault?

Follow the link if you want to see his answer, but don’t expect anything intelligent. You won’t find it.

If Joe Hockey keeps this up then between now and the election someone will be wiping a lot of egg off his face.

Maybe they should find a way to shut him up. Or maybe they could get rid of him. This economic buffoon could be our next Treasurer.

Frightening, isn’t it?

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Class Warfare?

The following quotes are just a few ideas from Abbott and Rinehart:

“TONY Abbott has proposed banning the dole for people under 30 in a bid to entice the unemployed to head west and fill massive skill shortages in the booming resources sector.” The Australian, April 21, 2010

“Mr Abbott advocated all welfare-dependent families with children should have half their income held back for food and essentials.” The Sydney Morning Herald February 24, 2010

‘I was in Canberra last week and had the opportunity to ask Opposition Leader Tony Abbott whether a government under his direction would continue with the Rudd government’s goal of halving homelessness by 2020. His answer was no. In justifying his stance, Abbott quoted from the Gospel of Matthew: ”The poor will always be with us,” he said, and referred to the fact there is little a government can do for people who choose to be homeless.’ National Times, February 16th 2010

“Mrs Rinehart also suggests the government should lower the minimum wage of $606.40 per week and cut taxes to stimulate employment.” The Australian, August 30th, 2012

But when Swan criticises Rinehart, Forrest and Palmer over their opposition to the mining tax, that’s class warfare. When it’s suggested that maybe schools who have better performance facilities than the Melbourne Arts Centre may receive less funding in the future, that’s class warfare. When it’s suggested that people earning more than $150,000 a year should be means-tested for any welfare payments, that’s class warfare, because people on that sort of income are “struggling”, but anyone on the minimum wage doesn’t need a rise because they’re already being paid too much.

We don’t need class warfare rhetoric. What we need is a little consistency.

 

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Why Labor must not win the 2013 election

In a nutshell, we have a Government who have hoisted us to the top of the international economic tree; who have delivered policies that will drive us into the future; and yet who trail the Opposition badly in the opinion polls. In nutshell number 2, we have a mainstream media who clamber over each other in telling us how incompetent this Government is while instilling in our minds that only Tony Abbott can deliver us from the burning fires of hell.

What if it were the other way around? What if the much-loved Tony Abbott (media loved, that is) had guided us through the global financial crisis (GFC) and safely out the other side; had a raft of policies on the table that held Australia high as a country willing to embrace social and political change, and yet were facing a wipe-out in the September election?

Not only would the Abbott Government be fighting for survival, but the media will be standing with them, shoulder to shoulder, fighting too. What would they be saying about the likely election result?

I’ve candidly put together a number of hypothetical examples. My responses might appear somewhat absurd, but it’s only absurdities that we’ve come to expect from our pathetic media. Let’s play along.

The falling dollar: The dollar is in free fall because the market is nervous about the prospect of Labor taking charge of the economy later this year. They don’t have a good history of economic management and the market is jittery in anticipation. Australian overseas travelers will also be hit hard. Forget those annual trips to Las Vegas taking in shows and shopping. Labor will ruin that for you. Forget too, the annual pilgrimage to Anzac Cove. Labor will ruin that planned holiday as well. Our dollar will sink into irrelevance.

The economy: Joe Hockey not only guided Australia through the Global Financial Crisis but his sound economic management has seen Australia receive AAA credit ratings from the world’s three major rating agencies. This is a first for our country. Nobody before him has been able to achieve this feat. He has also seen interest rates, the unemployment rate and inflation all fall below 5% at the one time. This has not been achieved in over 40 years. Euromoney awarded him with the prestigious Finance Minister of the Year in 2011. Australian voters want to award him with a seat on the Opposition benches.

If Labor win the election and Wayne Swan gets his hands on the savings of hard working Australians then we might become the next Cyprus. Best to keep your savings under the bed.

Refugee boats: How much longer can Julia Gillard promise to ‘stop the boats’ without laying a plan on the table? How much longer can she get away with calling asylum seekers ‘illegal immigrants’? She has been given a free license to scare and to lie and the average voter believes her. And the threat to tow them back to Indonesia could not only create an international incident, put put the lives of Navy personnel at risk.

Julia Gillard’s rudeness: Not even the holder of the highest office in the land commands her respect. Her disgraceful shouts of ‘he’ or ‘him’ when addressing Prime Minister Tony Abbott make one wonder that, given that her arrogance towards the Prime Minister is appalling, how must she then hold hard working Australians in lowly contempt. She’d think she’s even too good to kiss President Obama.

Foreign Affairs: In Julie Bishop Australia has a Foreign Minister we feel proud to represent us on the international stage. Can you imagine Bob Carr attempting dialogue with foreign governments and dignitaries as equally as commanding and gracious than Julie Bishop? Of course not. Do we want a Foreign Minister who just stares at people? One who couldn’t even find Indonesia on a map? One then, who would just stare at maps?

Interest rates: Home buyers have never had it so good under the Abbott Government. The last Labor Government presided over 11 successive increases. No wonder the market is jittery. Oh how easily people forget.

Infrastructure: There will be none. Simple.

Education: Shadow Minister Peter Garrett hasn’t asked one question to his counterpart, Christopher Pyne in two years. Does this display any ounce of interest in his portfolio? He is more interested in glaring at the Speaker or attempting to burst blood vessels in his neck than he is in education. His only comments on education have been to the adoring media that teachers are incompetent which he’ll fix by sacking 43,000 of them across Australia.

The Budget: Labor want to return to a surplus at the expense of jobs and infrastructure. Joe Hockey saved 230,000 Australian jobs with his gutsy move to spend money during the GFC and now Labor want to take those jobs back. Do we really need a surplus if it is going to cost jobs and services?

Those are a few reasons why Labor must not win the 2013 election.

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