The lash of karma is beating Robert Gottleibsen today:
…Let’s look at what is happening to cause the commodity rout and where there could be some good news.
We need to start with what is happening on the ground in our biggest market, China…Business Spectator’s Peter Cai…tells the story of province after province in deep financial trouble and a banking system that is cracking.
…On the supply side, the story in iron ore, coal and oil is the same. The low-cost producers are lifting production to drive out the high cost producers.
…Unless there is a change in these conditions is there anything that can save Australia? The answer is that we may see a further boost in Chinese investment on the east coast and a further rise in tourism. That’s what is happening now and long may it continue — at least while the commodity export rout is taking place.
We need the money, although it prices our young people out of the housing market, which will have long-term side effects. However, if China’s local problems stopped the flow of tourism and dwelling money, house prices would fall, which would in turn cause a huge spike in loan defaults at Australian banks.
What should have been done, Gotti, was the establishment of a minerals resource rent tax during the boom to prevent the over-inflation of the economy, to preserve the fiscal balance through the cycle, and to save money for investment after the boom.
But you killed the idea by channeling a violent mining vested interests campaign that unseated a Prime Minister. Sadly the nation must now reap what you sowed, old boy.
