So let me get this straight…..

piggy-bank-locked-upSo let me get this straight,

If I earn over $80,000 I am going to be asked to pay for the $68 billion that Joe Hockey has added to the deficit by his party’s policies.

I have to pay for Hockey’s $9 billion gamble on the Aussie dollar going down.

I am going to have to cough up money to give billions to the worst polluters so they can upgrade their factories, and many more billions in fossil fuel subsides to wealthy mining companies.

I am going to have to pay women on very high salaries almost $3000/week to watch their nanny look after their kid for 6 months whilst they get a rebate for employing her.

I am going to have to pay for a huge fleet of fighter jets to protect me from who? Do you really think we can beat China in a war? If America needs us to help then I am sure they would provide the jets. Hey we could even lend them an airbase to use their own bloody jets to bomb whoever the hell they want to next time. Won’t it all be done by the unmanned drones that I will also be paying for?

Tony is spending over $10 billion on his war games against asylum seekers. I refuse to pay for that. I don’t want to pay over $1 million for Jim Molan to be our “Special Envoy” never to be heard from again. I don’t want to pay $200,000 for every orange life raft that gets used once to set asylum seekers adrift on the ocean. I don’t want to give billions to a security firm that maims the people they are hired to protect.

I don’t want to spend billions on roads whilst ignoring public transport. I want cost benefit analyses done by Infrastructure Australia and I want THEM, the experts, to decide on priorities rather than our “Infrastructure Prime Minister for Women and Aborigines”.

I don’t want to spend $40+ billion on a National Broadband Network  that I won’t even be hooked up to.

I don’t want to pay over $600 million for Tony to buy two big new planes to fly himself and his entourage of Murdoch press, film crews, and businessmen around the world in VIP luxury.

I don’t want to spend over $5 million on bomb-proof BMWs to drive Tony around even if they did give his daughter a job.

I don’t want to pay millions for Tony Abbott to fly backward and forwards to Canberra because he decided to live at Kirribilli House so Margie could keep working and he could keep surfing. When John Howard did that it cost us over $18 million in flights to and from Canberra.

I don’t want to pay for a Royal Commission into the Home Insulation Scheme. There have already been 8 investigations which have made many recommendations. This is a pointless political witch hunt that you want US to pay for. Same for the RC into unions. We have ICAC and similar bodies, as well as the police and judicial system, who already have the resources, experience, and authority to deal with corruption and intimidation.  Why not set up an integrity department that keeps an eye on all you bastards.

I don’t want to commit to paying for a never-ending search for a Malaysian plane.  When there was any hope of survivors then all hands on deck for sure.  But I fail to see why we are now footing the bill for a search that may never bear fruit just so Tony can grandstand.  It was a useful distraction for him for a while but it’s time to say, sorry, we couldn’t find it, and let the Chinese pay to keep searching if they wish.

I don’t want to pay $20 million for marriage guidance vouchers for newlyweds even if it is Kevin Andrews’ area of expertise/income.

I don’t want to reward Tony’s pollie pedal sponsor Cadbury with $16 million to reintroduce factory tours.

I don’t want to pay $10 million to the Manly Sea Eagles to upgrade their grandstand so Tony, their number 1 ticket holder, can watch in comfort. Or $5 million to Rupert’s Brisbane Broncos – hell we just gave him an $882 million tax “rebate” for “historic losses on currency transactions”.  Thanks for that almost $1 billion hole in the budget Rupert.

Must I pay $4.3 million for a research company to trawl through millions of Australian social media posts to advise the government on its immigration policies? Between Scott Morrison and the immigration department alone, you already employ 90 spin doctors. What are THEY doing that you need to pay millions to someone else to look at stuff that is freely available?

All of these reviews and audits and consultants and white papers and green papers are costing us a fortune. The Commissioners of Audit were paid $1500 a day each. Does this imply that NONE of your policies had any basis in fact or solid grounding or research behind them and now you must pay people to make them into something credible? Why use PriceWaterhouseCoopers when we have Treasury, Finance, the Productivity Commission, the Parliamentary Budget Office? Am I to pay for you to get the answers you want to hear?

I don’t want to contribute $2.2 million legal aid for farmers and miners to fight native title claims.

As Opposition Leader, Tony Abbott claimed over $1 million a year in entitlements, on top of his salary. I don’t want to pay thousands of dollars for him to take part in fun runs and charity rides.

I don’t want to pay for jobs for the boys like $320,000 for Tim Wilson who had a job made for him and gifted to him with no qualifications, experience, interview, or application process.

I don’t want to pay for George Brandis’ bookshelves or Tony’s designer rugs.

If we keep the carbon tax and the mining tax and cut all the above wasteful expenditures then we will be a long way towards cutting the deficit without ME having to foot the bill for your decisions which, might I say, show you have absolutely NO idea about spending priorities. I doubt any of you have ever had to work to a budget before because you are making a god almighty mess of it and if I am going to pay to get us out of trouble then I want a say on how it is spent!

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Categories: Politics

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218 replies

  1. donreford you’ve mentioned a couple a really sad cases in pink bats and banksia. From all reports you would have done better investing in Banksia than the pink batts program though. At least you get some some money back from Banksia.

    As for the comments on the dollar, Craig is right and yours are half right. Quantitative easing is being reversed which is not correlating with the dollar (broke down long ago). But don’t pan somebody to try and make an argument when they are making sense.

  2. Thanks for the advice Stephen. I assume, since you pan all my articles and comments from anyone except conservatives, that we don’t make any sense to you. Perhaps you are wasting your time here?

  3. “What we need is more Craigs, to explain to us who are financially dumb, his education may be useful to people like those who invested in Banksia, and lost big money, what we do not want is experts to tell us where we went wrong after the horse has bolted.”

    I think we have one in Joe Hockey’s wife. She looks like she is going to be even more of an asset than her husband.

  4. Come on Australia, find a voice and make these lollies accountable for our money!!

  5. By imposing a ‘deficit levy’ and talking up a ‘budget crisis’, Abbott figures the electorate will actually blame Labor, rather than blame him for the tax hike.

    Somehow the $1.85bn carbon price is supposed to destroy the economy, although it actually came coupled with considerable compensating income tax cuts. Yet an income tax hike of $2.5bn will be good for the economy because it helps reduce the deficit. And of course, the carbon tax revenue ($7.4 billion) somehow doesn’t help address the deficit, does it?

    Meanwhile, a $5.5bn per annum extra hit on the budget in the paid parental leave scheme — which will primarily act to lure women out of the workforce for 6 months — is supposed to enhance the country’s economic performance?

    You’ve got to give it to Tony Abbott. As a Prime Minister, he is a damn good comedian.

    http://www.businessspectator.com.au/article/2014/5/2/climate/tony-abbott-comedian-extraordinaire

  6. Thanks Stephen for your informative response, what you have omitted regarding the pink bats, the money saved by households accrued financial benefit is omitted from your response as is omitted by all of those who have had a saving.
    With regard to Banksia, you would note that the collapse of this well run institute, collapsed after being taken over by new management of CEOs, that were either inept or they were well versed collapsing such financial institutes and targeted this institute as collecting money for management as some would say a Ponzi scheme, the 660 million dollars that went astray is still suspect, only those with insider information would know the inside story.
    The quantitative easing is thwart with problems, with reference to Anthony Randazzo, Sept, 13th, 2012, this concept you have brought into focus, I suggest the Federal Bank, is a questionable organization, I presume you are fairly well off, to suggest this idea, furthermore the commentaries on the Federal bank is as some analysts put forward, a organization that is corrupt, I would be interested if you could Stephen, inform us as to what interpretation you make of quantitative easing? and also what your degrees are as a expert in finance is?

  7. Stephen, being a right wing conservative, is wasting his valuable time on his insightful superiority with those who are lesser mortals, why waste your time with this blog Stephen? your time is better spent looking at stocks and shares.

  8. you left out the 30 billion we are likely to spend buying soryu class submarine from japan

  9. Did not know this, peculiar the Japanese, arrived here in WW2, in submarines, if war broke out as with WW3, not knowing who is the enemy at this time, strange so much military is made abroad in particular computer parts and chips, do we understand the technology of chips becoming a problem? made abroad?

  10. Yes Kaye, you’re right in saying that Chinese demand for resources has been one reason why the AUD was high, as was QE (and I saw some comments before that you disagree on QE – so do I. But to say the Federal Reserve is a corrupt institution, I’ve read a lot of conspiracy stuff on that, it seems scary if true, but in my years of watching the Fed they’ve generally been good but recently I’m concerned – QE works if you’re a reserve currency, but it ships their economic problems to the rest of the world. When other major countries also follow suit like Japan, only the emerging markets end up taking the hit as they cannot afford a run on their currency). What I’m referring to is the recent high AUD after the winding back (or “tapering”) of QE and the cooling of Chinese growth, which the RBA expected would see an AUD closer to $0.80/$0.85 than $0.93 now – and that’s been offshore demand for our bonds (as well as the resultant unwinding of short AUD trades).
    Our AAA rating was re-established under Howard in 2002 (Moody’s) and 2003 (S&P) after Labor lost it in the late 80s. See http://www.ibtimes.com/debt-downgrade-how-australia-lost-and-regained-its-aaa-rating-826857. The Labor govt from Kevin ’07 have only put us in a position that, some time in the future, may threaten that rating. MAY. We are still in one of the best financial situations (Federally) with a relatively low debt/GDP. However, Labor institutionalised a very large growth rate of spending and assumed ridiculous rates of GDP growth to say we’d one day get back to surplus, but no-one in the markets, nor the ratings agencies, took that seriously. But with such a great base (ie. the only debt on issue was essentially to ensure that we had a viable market for bond trading, and futures) the ratings agencies love us, for now. However, our State debt, and private sector debt, is very high, so we need the Federal debt to remain low so that we reduce overall country risk. We have no Federal Budget emergency, but we do have a problematic rise in overall debt. It is a lie that the Liberals say the Federal Budget is in an emergency state, however the growth in debt has been “locked in”, and that’s the problem – but it’s several years down the track, and best dealt with as soon as the economy can withstand it.
    Bacchus, I think my Uni of NSW double major in Economics and Finance with merit and 25 years working for some of the world’s largest financial institutions such as Bankers Trust (yes, Mel Babbage also worked there, Joe Hockey’s wife. One very smart woman), Salomons, Credit Suisse, Schroders, Citigroup, Barclays, Man Financial and my current work as a Financial Reporter does qualify me, and I don’t own a huge amount of shares except for in my super account, just like most Australians. I’ve never really reached the level where I was well remunerated, which was in part due to my tendency to speak up against my bosses when I saw injustice, and in part perhaps a bit of shame as to what I’ve done with most of my life, working for these institutions, alongside some ruthless and selfish individuals. But most of my peers find me a man of integrity, at a cost to me financially. My current role as a market and economic journalist suits me more; I was a trader that didn’t like risk, and a broker that didn’t believe the story I was trying to sell, as brokers need to sell both the buy side and sell side at the same time, which is, in my opinion, unconscionable. So I’ll stick to economics and finance thanks, as at least I have now a very wide working knowledge of both, and you can stick to wine and revelry, Bacchus, given the god status you claim. If you mean that I omitted the fact that the money actually went to the RBA’s Capital And Reserve Bank Reserve Fund, which is more than just a currency manager (in fact, it is never used for currency intervention directly, but it is used to absorb losses on its $90-odd billion ­balance sheet) and also includes demands from the IMF to help with global crises, and that both Libs and Labor have raided the fund for years, then I was trying not to obfuscate the message with detail. I can go into more detail if you’d like. I doubt you do.
    Kaye, I agree in one sense – the money given to the RBA can be seen as an attempt by Hockey to make the budget look worse before he can reap the dividends later. However, it is needed in my opinion (but not in the opinion of many economists that I respect), and has been neglected for years. As yet, it hasn’t been transferred to the RBA as it needs a government appropriations bill. So it hasn’t cost anything yet. It is also up to the markets whether it is a net cost or a gain, depending on how it’s utilised, but it is not in any sense a gamble. That is what I take issue on. And saying it is costing us money is incorrect, hasn’t cost a cent yet as it hasn’t happened. What I can tell you is we have well over $300b in debt outstanding (less about $40b in assets at the RBA), and that is purely due to spending from Labor, and not returning any dividend. If $9b to the RBA costs us $300m a year (but hasn’t yet) then 34 times that costs us over $10b a year in interest, using your numbers. Was the pink bats and BER worth it? And why do the biggest polluters not have to pay the Carbon tax? Gillard never explained that. If it doesn’t apply to all, it’s misguided. And if anyone thinks it will reduce carbon emissions worldwide, they are delusional. Unless we can change China, India, Brazil et al (the BRIICs), what we do is purely a local tax on a world-wide problem. Please don’t anyone start with “but we should act as an example” – an example is only relevant if the audience is listening, and the emerging markets are not, and it would be selfish and arrogant of us to insist that they do after we’ve done what we’ve done for centuries.
    My point is, and it’s just my belief, the government should stay out of such enterprises. They should stick to large infrastructure such as roads, rail etc… (and my dream that one day we build a series of water management “canals” and dams so that we get water from the north to the middle and south, and become the true food bowl of the world, perhaps employing the refugees that we, both Labor and Liberal, incarcerate in inhumane conditions – worked properly that plan could be our Snowy Hydro for the persecuted, and help everyone here). They should not get involved in bail-outs, a business goes broke through supply and demand, as well as price. We should be investing wisely in our future, in education and health, and top-end infrastructure. Not giving $900 cheques to people to by flat-screen TVs. Have a look at this chart for Möbius Ecko “Yes Julian there was plenty written about the most profligate government in our history, the last Liberal government.” http://www.tradingeconomics.com/australia/government-spending. Make the date go back to 1996 when Howard got in. Tell me again that Howard is the most profligate. He WAS responsible for the biggest growth in spending, that much is true. But have a look at the GFC period where spending accelerated at an unprecedented pace. That was a pure vote buy, it was not needed, we didn’t have a problem here, the Government guarantee on the banks and the strong balance sheets that our banks had, as well as our limited exposure to troubled assets were a product of very sensible banking policies from the majors. Anyway, recessions are not a bad thing per se, if we had one it’s not the end of the world, it acts as a clean-out of under-utilised resources. Our problem is that governments fear them so we just kick the can down the road, and now if we have one it may seriously hurt the economy as the level of under-utilisation is at extremes.
    Kaye, I agree on many points you make, I also have a list of preferences of how our money should be spent. But we can only vote a government in or out. Labor got voted out because of it’s inability to manage a budget, and because it broke promises and allowed the Greens to dominate economic policy when their platform is social, not the economy. I also apologise for saying “Wow, unfortunately you are wrong on so many levels here it’s not funny” – that was uncalled for, and incorrect. It was meant mainly as a reference to the RBA which hopefully I’ve explained. I’m sure we’d agree on many things if we ever had a chance to chat. And disagree on just as many issues. Your opinion is widely liked, as seen by the replies, and that’s obviously a feat of working hard on these issues. However, I’m concerned with the recent trend to beat up on Abbott on issues that are actually the result of Labor policies (and even the previous Howard govt), and to believe that he’s some sort of evil person because Gillard called him a misogynist (please remember that speech was when she was questioned about her defence of Peter Slipper, a member of the LNP who somehow, miraculously, decided that personal interest was more important than backing the party he was part of when he entered parliament by democratic vote. anyone who thinks that was all above board is kidding themselves). I don’t particularly like the guy, I don’t think he has a great grasp of economics. But then neither did most of our ex-PMs. But I will defend his right to direct policy for the next three years given he was democratically elected in a landslide, a point which Labor seem to forget. But that will be their loss.
    Donwreford, the losses in Banksia are lamentable. I’m sure I’d be able to advise on such issues on an ad-hoc basis, but I have no current licence (I held a PS 146, now called the RG 146, but I don’t know if that’s applicable anymore. Probably need a refresher, which I have no interest in after spending 20+ years studying to stay up to date before I made my switch to media). However, losses stemmed mainly because people don’t understand what they’re investing in, which I can’t help with. I don’t get why people believe in promises that cannot be true. They were not an authorised depository institution, and that seems obvious to me. They made promises that implied they were. Unfortunately you can’t stop people from ripping others off. Human nature sadly. I hope you weren’t one.
    Sorry if that put you all to sleep.

  11. Your article is long and I will have to go over this again, as you have experience in finance, can you give me information on how America is in debt to some 16 trillion dollars, and Australia is in debt for by comparison a few billion, America is no what I can discern worried, why is Australia, a knee jerk reaction to debt relatively small?

  12. Craig

    Your post is food for thought though and demands attention. The historical contributors to the current state of affairs needs to be debated rationally however It does not deal with the problem of inequity and Thomas Piketty’s evaluation of burgeoning inequality. Our current economic system is not conducive to a sustainable and manageable use of finite resources. The problem is how to restructure contemporary economies to more rationally reflect the dynamics of environmental degradation and a sustainable approach to resource management. The status quo is not a viable option. Wealth transfer is inevitable and we may as well think it through before too many people suffer irreparable damaged. Absurd wealth alongside abject poverty and inequality is not an option on so many moral and practical grounds.

  13. I can’t even begin to imagine the profits our banks would make if we weren’t in a fiscal black hole:

    http://in.reuters.com/article/2014/05/04/australia-westpac-bkg-au-idINL3N0NQ0EF20140504

    Amazing or miracle?

  14. Thanks Stephen, I agree that the system’s broken. I have yet to read Piketty but the critics are calling it just another Marxist theory, which has been attempted before and failed. I unfortunately don’t believe in the positives of human nature enough to think that society will change without a shock, those in power are rarely willing to let that power go. It is also unlikely to change through democratic vote, until it’s completely and unequivocally obvious that we’re heading for a breakdown, and whilst there is some groundswell on that, it’s not enough to force a new party to come forward to challenge the two right leaning parties that dominate Australian politics. I think the answer probably lies in taxing wealth not income, but haven’t done enough work on that to have a hard and fast theory. It is also very hard to stop “bleeding” from the system, as the rich and powerful can fairly easily transfer citizenship etc… to avoid tax. I really don’t know what the answer is, but I do know the solution can only come if all parties work towards it and not cheap point scoring to get into power.

    diannaart – we can only imagine. Westpac shares were down 1.2% after that record profit. Seems that basic greed isn’t enough, what the market wants is massive greed. It’s a sickness.

    donwreford: the US is concerned, which is why they are trying to reduce government spending, and will run a much smaller deficit this year compared to recent years. Their deficit to GDP is at 2.9%. Australia’s last reading was 2.2% (Bloomberg). Their overall Federal Debt to GDP is 72%, ours is 33%, the second best in the developed world. We are AAA rated amongst the big 3 (Moodys, S&P, Fitch) whereas the US is AAA equivalent under Moodys and Fitch, but AA+ at S&P. It’s not really too much of a worry for the US, as their treasury market is the world’s largest and they have no shortage of buyers when they need to raise money, with Japan and China, as well as plenty of oil money (and the Russians!) on the bid. Ratings are more of a concern for small markets like ours, as a drop in the rating seriously affects the rate at which we borrow. For example, if the US gets downgraded or there’s even a hint of that, investors world-wide panic, and shift assets to the most liquid market in the world (called flight-to-quality) which happens to be the bond that’s being downgraded – US Treasuries (that’s a simplification, but that is the mechanism). If we get downgraded, the market sells our bonds (therefore raising borrowing costs) and buy other AAA rated debt, or US Treasuries. The problem lies in overall debt, private sector, Federal and State. Our State debt is high (as is US State debt) and Private sector debt (2011, OECD) is 184% of GDP. Italy, considered a basket case just a few years ago, is 188%. The US 198%. The Scandinavians are around 250-300%, with Federal (sovereign) debt to GDP ranging from the world’s best (Norway at 30%) to 40-50% for Denmark & Sweden, to 73% for the Dutch. That is not a model we want to replicate. The problem for us is if we head towards 50-60% on sovereign debt to GDP and get downgraded, that has a knock-on effect for all borrowers, and will hurt State borrowing as well as Private sector debt raisings, which will in turn hurt the economy. That’s a basic explanation, there’s more to it that that, but that’s a rough reason why we don’t want to grow our debt to much from here. However, much of the deficit is not able to be avoided as it’s part of what Labor managed to get through parliament over 6 years, and any attempts to cut spending are met with rejection by Labor and the Greens in the Senate, what Keating used to call “the unrepresentative swill”. Labor and the Greens still essentially hold power to reject anything through the Senate (they hold 40 of 76 seats), but have only 55 of the 150 seats in the truly representative Lower House whereas the Coalition have 90. 90 to 55 is a landslide in anyone’s world, and they are not allowed to determine policy. What a great system we have.

  15. Thanks Craig, very informative.

  16. Thanks Craig good to understand where you are coming from. Live and learn.

  17. Craig I think Piketty has been unduly maligned. Solid research background. He is not as radical as some have been suggesting. He also considers the solution some kind of wealth tax. His work has sound empirical foundations and he supports a rational market economy. He simply demonstrates that increasing inequity is unavoidable as wealth is more and more centralized, concentrated at the top, and more often than not inherited. This tends to prevent innovators joining the fray as upward mobility and creativity is dampened by monopoly capital. Piketty is not an ideologue he openly accepts criticism and any other sensible alternative solutions.

  18. Thanks Kaye and Craig for your informative comments. I think when we are thinking about the economy we need to recognise that to cut the spending power of the less well off, this will will have knock on effects and damage the economy overall. The less well off have little discretioning spending so their money is more likely to enter the economy. I believe that the Left understand this, but the Right to not.

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