By Denis Bright
The federal LNP wants the national election to become an ideological auction about the merits of its prescription for market ideology with its unaffordable housing, homelessness and falling real wages.
Ironically, for the professional ideologies in the federal LNP, there is scant attention to trends in private sector investment which should be the forte of outstanding centre-right leaders worldwide.
In the marginal LNP Queensland federal electorate of Capricornia is still a strong supporter of the old economy (Katharine Murphy in The Guardian online 17 April 2019):
One of the Morrison government’s strongest backers of the controversial Adani coal project, Michelle Landry, says the company has attended fundraisers for her re-election campaign, but she doesn’t have a figure on how much has been donated.
Landry, who is the member for Capricornia, told the ABC on Wednesday she was not in control of her campaign finances, so she wasn’t in a position to nominate a specific figure for Adani donations. She said taking financial support from a company trying to secure federal and state backing for the project “certainly doesn’t sway me”.
“My main job is to look after the people of Capricornia, and [the Adani project] is about jobs for the people of Capricornia,” the Queensland MP said.
“I have the biggest coal mining electorate in this nation, and I stand up for my people here and will continue to do that”.
An analysis by the Australian Conservation Foundation of federal and Queensland donations data shows Adani has given the Liberal and National parties $60,800 since the last federal election.
One Nation has received $30,000 from Adani. Labor received $2,200, but later returned the money to the company.
The ACF’s Stop Adani campaigner, Christian Slattery, notes that Queensland has real-time donation disclosure laws, but it can take up to 18 months at the federal level for donations to be made public.
Josh Frydenberg wanted to dazzle the electorate with hopes of a $7.1 billion surplus for the financial year ahead in his budget delivery speech. Then came the welcome distraction posed by Bill Shorten’s response to a reporter’s question about Labor’s long-standing superannuation contribution tax concessions for incomes above $200,000 (ABC News Online 16 April 2019).
This is very old school political debate as apologists for the current market economy wait for the next El Dorado to replace the resources and property market booms while keeping tabs on opposition leaders under pressure without the resources available to a government in office in caretaker mode.
Balanced private sector investment to promote economic diversification is no art-form in current government policies.
Coverage of Investment in the 2019 Budget Speech
Like successive LNP Treasurers, Josh Frydenberg has squandered the opportunity to extend national investment levels by the temptation to offer the most generous tax concessions to its upper middle-income support base (from John Kehoe as Senior Reporter for AFR Online 12 April 2019):
Completely overlooked in the federal LNP’s rhetoric about that Stronger Economy are the languishing trends in private capital expenditure which accounts for 75-80 per cent of all investment in the Australian economy.
In the private sector, investment trends have plateaued since the election of the federal LNP in 2013 with an anomalous improvement in the December Quarter data for 2018-19. This will be the last set of private capital expenditure data to be released before the forthcoming election.
Capital expenditure in the Australian economy has lagged since the federal LNP was narrowly re-elected in 2016 as shown by the plateauing out of the longer-term trend-line of private sector capital expenditure. Only the last December Quarter in the series offered a good seasonally adjusted result due largely to a vast improvement in expenditure on plant and equipment associated with inducements to tax write-offs which commenced in the 2018 budget and were continued this year with bipartisan support.
The federal LNP’s blind-spots on the need for policies to foster economic diversification continues in the budget. Investment was mentioned six times in the budget delivery speech. Each time it was about the need for prudent government investment with overall government spending below 23.9 per cent of GDP to 2029-30.
Amidst all this rhetoric about containing government spending little attention was given to the trend-lines for Australian Capital Expenditure which should be the forte of any conservative government.
Percentage Trend-lines in Australian Private Capital Expenditure
The latest global data from the McKinsey Global Institute (19 January 2019) shows the importance of these new forwardly looking investment strategies for application in a middle-sized economy like ours.
Best practice in the application of the McKinsey Model occurs in the Scandinavian style of social market economies which achieve bipartisan support from the mainstream political parties.
As Australians are not ready to accept such high levels of taxation and government intervention to implement the McKinsey prescription for economic diversification, our future must lie in taxing every opportunity of available investment from the global market economy.
Missed Investment Opportunities: Missed Diversification Options
Missed Opportunities for the Consolidation of Net Capital Inflows to Australia from Asia have not been assisted by the federal LNP’s deference to policy directions from the Trump Administration with its America First focus. This makes Australia a client state in key areas of economic diversification.
Co-operation between Financial Consultants KMPG and the University of Sydney can offer new strategies for a progressive incoming Australian Government with real initiatives to break with the old economic jargon from the federal LNP. The full report from KMPG is available online.
While China is repairing its financial relationships with immediate neighbours like Japan, South Korea and Taiwan its financial relationships with the Indo Pacific Basin are being extended by Belt and Road initiatives in the important areas of higher technology investment and financial services which are crucial to the Australian economy.
Since the election of the Trump Administration the scope of China’s investment outreach has been contained with some assistance locally from investment controls by the federal LNP. Let data contained in the new report assist in explaining the situation:
Fortunately, a reservoir of goodwill exists between China and Australia which cannot be extinguished in just two terms of a federal LNP Government:
Great opportunities are available to continue to diversify Chinese investment away from the strategically safe areas of property investment to potential growth areas like healthcare, infrastructure, renewable energy and IT sectors:
New horizons present themselves for Australia if the federal LNP does not spook the electorate before 18 May 2019 with the quest for the market El Dorado to replace the resources and property boom with a new age of mass consumption for the aspirational side of town in the hope that the benefits of new tax packages might be passed down the line.
Despite the regressive certainty of our federal LNP leaders, a new investment direction is available that is quite mainstream in its assumptions about the opportunities for stabilising change. Like President Roosevelt of old, Bill Shorten can hopefully calm the fear strategies from the LNP’s most eloquent fear strategists to upset the leadership transition after 18 May 2019.
Will theme music be developed for application to Australia’s successful social market transitions at the 2022 elections?
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Some farcical but thrilling road-blocks were encountered in attempts to extend this article through phone calls and emails relating to private sector investment trends.
From the Treasurer’s Media Office Melbourne
Thank you for your email.
Treasury is best placed to respond to your questions and will do so.
Can everyone conclude that the federal LNP is flying without radar in tracking projected private sector investment trends? I don’t belief that this is true so let’s wait for the ABS data from future quarters which the mainstream press has chosen to ignore in the past.
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