Abbott’s recession risk

Opposition Leader Tony Abbott has delivered CEDA’s State of Nation address today. Let’s see how it stacks up.

Ladies and gentlemen, thank you so much for the warm welcome you’ve given me. It is great to be here. This is an important forum for the discussion of ideas for the good of our country and it does bring together people who are interested in the future of Australia, in particular are interested in our economy.

As I look out around this room I don’t see employers who want to persecute their workers. I don’t see taxpayers who are trying to rip off the system. I don’t see business leaders who want to spoil the environment. I see people who are trying to build a better Australia and what I want to do is work with you, not against you, towards this great goal.

Now, I asked my distinguished advisers today for some notes to guide my remarks and I was given a single sheet of paper with one word on it: growth. Economic growth. That is what we need in this country, stronger economic growth. If we do have strong economic growth, profits are up, income is up, employment is up and government revenue is up. In fact, with strong economic growth the government can simultaneously increase spending, cut taxes and boost the surplus and if you say that’s a magic pudding, it is actually what happened for the last five or six years of the Howard Government. Strong economic growth brings a magic to all aspects of our society and that’s why it’s so important that government policies should be about fostering stronger economic growth. Without strong economic growth there is never enough to go around and it’s almost impossible to give more to one without giving less to another. This is why economic growth is so important.

Sure, but Howard’s growth came from a mining boom he had no part in. If anything he over-heated the economy by providing tax cuts when he should have saved the tax windfall. Hence the Australian economy blew off into 2007 with everything too hot, including the interest rates that in part hurt Howard’s re-election chances:

Now, I know if you just look at the raw headline numbers for economic growth, the last few years don’t look too bad. Despite the global financial crisis there was only one quarter of actual negative growth. But if you look behind the numbers the situation is not nearly so good. GDP growth per head of population since 2007 has been only one third of the GDP growth per head in the Howard era, and this is why the Howard era now looks like a lost golden age of prosperity. Over the last five years multifactor productivity in this country has actually declined. It’s actually declined by three per cent. We know that the private savings ratio is massively increased. It’s at the highest level in two decades because people don’t trust the Government to save, that’s why they are saving so much themselves. People don’t feel rich, that’s why they are saving so much themselves. We know that real wealth per head has actually declined over the last five years because of stagnant property prices and because of falling share prices and that’s led to so much more restraint in spending which is why so many of our main street retailers and businesses feel under such pressure today.

I would have thought a better explanation for increased savings is the GFC. Note as well no mention of private debt, just the silly Ricardian notion that we’re all saving to pay off public debt later. It also rather sounds like a promise to get private borrowing and house prices going again.

The great thing about a growth strategy is that it’s also a confidence strategy because that is the missing ingredient in so much of business decision-making right now.

The challenge for government, the challenge for the Coalition should we become the government after the election, is to do more and to do better to get economic growth up and the best way to get economic growth up is, of course, to get the fundamentals right. It’s always the right time to get the economic fundamentals right and what you’ve got to do in terms of the economic fundamentals is understand the iron laws of economics and one of those iron laws is that government doesn’t create wealth, business creates wealth. Sensible governments never go around attacking wealth creators, they never go around accusing people who have invested millions, created thousands of jobs, of being a danger to democracy as this government, I regret to say, has. Sensible governments understand some of the corollaries of the iron laws of economics such as that you don’t speed up the slow lane of our economy by slowing down the fast lane, such as that you do not boost our economic strength by targeting the strongest sectors of our economy and you can never, never, tax your way to prosperity.

Now, I believe that the Coalition I lead understands all of this in the marrow of its bones and that’s why I am confident that should there be a change of government later in the year, there will be an instantaneous adrenaline charge in our economy. There will be an instantaneous surge of confidence because an incoming government will understand that simple truth that business is the source of prosperity, business is the source of economic growth and it will want to work with business rather than against business in boosting the prosperity of every Australian.

The Coalition’s strategy to boost economic growth is really quite straight forward and it starts with getting taxes down. There’s been a lot of talk about the carbon tax. There’s a lot of talk from the Government that the carbon tax hasn’t really been noticed. Well, everyone notices a new tax and people are particularly conscious of a new tax which doesn’t serve any reasonable economic purpose. The problem with the carbon tax is that it’s damaged our economy without helping our environment and that’s why it will go as the first priority of an incoming Coalition government.

This is plain wrong. The carbon tax changes prices, it doesn’t damage growth. In fact, at this point, it’s probably provided stimulus given the rebates have gone out ahead of what price rises we’ve seen. And it will be stimulating investment in new power generation.

Then there’s the mining tax. Now, the mining tax was always a bad idea. This idea that miners don’t pay enough tax is just misleading at best and dead wrong at worst. Miners pay the company tax that everyone else pays. Mining staff pay the tax that every employee pays. But miners have always paid royalties, always have and no doubt always will. So the mining tax was effectively a third tax on a sector which can easily go somewhere else. This idea that the only place you can mine is Australia, again, just dead wrong. Mining capital can go to many other places and it has started to go to many other places since the mining tax was introduced.

Then, of course, there’s the way it was introduced and the outcome of its introduction. It has turned out to be a lose/lose tax, a tax which impacts on investment, impacts on employment but in the end raises hardly any revenue at all and we’ve had the really rather sad spectacle in Parliament this week of minister after minister in denial about this particular tax.

The mining tax is a joke because it’s a failed tax not because it deters investment. If there has been damage it is to government revenues. Royalties are not a tax, they are land use payments. Company tax is a tax, yes. The mining tax was supposed to cut the company tax as I recall.

The trouble with government which is spending unsustainably is that it is always looking for more taxes. There’s the carbon tax, there’s the mining tax, and in all candor there are the coming additional taxes on superannuation. They thought they could get away with a carbon tax because that was only going to be paid by the so-called big polluters. They thought they could get away with a mining tax because that was only going to be paid by the wicked multinationals. But those taxes aren’t raising enough money. That’s why they’re now coming for the ordinary people of Australia with new taxes on superannuation.  Well, under the Coalition the carbon tax is gone, the mining tax is gone, and there will be no further fiddles with superannuation because people’s savings don’t belong to the Government. People’s savings belong to the people and the Government has to respect that.

We’ll get taxes down and we’ll get government spending down. But we will do it honestly, not dishonestly. When the Treasurer said that he was going to deliver a surplus in the current financial year, something that he said on at least 366 separate occasions, I applauded him. Joe Hockey applauded him, Malcolm Turnbull, Julie Bishop, Warren Truss, we all applauded him because a surplus is, as the Treasurer said, the mark of sensible economic management. We deeply lamented the fact that it wasn’t a straight surplus, that it was a fiddle the books surplus but at least the fact that it was going to be a surplus was something that we could applaud, and now that’s gone. That’s gone. But unfortunately though the surplus is gone the fiddling continues. Just this week there was an adjustment to the forward estimates for border protection costs. The Government has reduced border protection costs over the forward estimates period by $2 billion, even though illegal boat arrivals are at an all-time record. That, alas, is the quality of candor that we currently get from our Federal Government.

Now, the Coalition will get spending down. We will do it in ways which we believe are responsible. Some of the ways we will do it will be controversial. For instance, we’ve announced that the so-called school kids bonus will go because this is a cash splash with borrowed money that has nothing necessarily to do with education. We won’t go ahead with the 6,000 person a year increase in the refugee intake because that would send the wrong signal to the people smugglers and in any event, at the moment the people smugglers are determining that intake. We will trim back the Commonwealth public sector, not because we fail to respect the work of public servants – as a minister for nine years I very much respect the work of public servants –  but there’s 20,000 more in the Commonwealth public sector than there were five years ago and there hasn’t been a commensurate increase in service delivery or efficiency. So, just those changes will save about $10 billion over the forward estimates period.

OK, so does this amount to an immediate shot of adrenaline for the economy?

Scrapping the carbon tax does nothing to stimulate unless Abbott leaves the tax cuts that it funds in place. Let’s assume that’s the case so it will mean he’ll have to cut a lot government spending, beyond what he has outlined to reach a surplus. It will stimulate growth in time.

Scrapping a mining tax that is collecting no revenue does nothing.

If the other spending cuts produce a Budget surplus, as opposed to a deficit without them, then they will be contractionary, just as Howard’s were in 1996 and Newman’s were this year. Over time they could restore greater growth if they cause interest rates and the dollar to fall, boosting private debt and tradeables investment. But right now both are weak and will not respond quickly.  Moreover, if Abbott pursues this agenda in September he will be doing it in conjunction with the peak in mining investment, materially increasing an already not insignificant risk of recession.

Then again, there appears to be no actual promise to reach surplus in this speech. And there is the line about restoring growth to produce a surplus. So perhaps the plan is to also abandon the surplus and offset the carbon tax cuts against the promises spending reductions. He just can’t say so. But who knows?

If we don’t go ahead with the National Broadband Network in its current form, that’s about $50 billion less that the Commonwealth will need to borrow. So, we will get government spending sustainably down and most importantly, ladies and gentlemen, we will get productivity up. Now, the last thing I want to do is blow my own trumpet but as a minister I think I had a good record when it comes to getting productivity up. Some of you would remember the Cole Royal Commission into the commercial construction industry and the subsequent Australian Building and Construction Commission. $5 billion a year worth of productivity improvements was the result of the work of the ABCC and the ABCC will be fully restored under an incoming Coalition government.

It is important for all sorts of reasons, productivity not the least of them, that we restore the rule of law in all sectors of our society but particularly, in our workplace. Another announcement from the Coalition that you might have noticed this week is that union malefactors would face the same level of penalties and potential criminal sanctions as corporate malefactors. There ought to be a level playing field for wrongdoing. Wrongdoing is wrongdoing, whether it happens in a company or in a union. So we will make sure that wrong doers face the same penalty for the same sorts of crime, and we will establish a registered organisations commission to act as a watchdog and policeman for the union movement and for employer organisations in the same way as ASIC polices corporate organisations.

The NBN is about the only government initiative underway that is a genuine investment in productivity so putting that in this paragraph is pretty ridiculous. Despite that, the productivity discussion is welcome. However, there is almost nothing here to suggest Abbott can do anything about the issue. Curbing renewed union power will help a little at the margin. The rest can only be achieved through the long slog of increased manufacturing investment, increased infrastructure investment, increased education investment so on and so forth.

There will be a one-stop shop for environmental approvals and this will be part of our campaign, our pledge to reduce your red tape costs, business red tape costs by $1 billion a year, at least $1 billion a year over the life of a Coalition Government and we will get the public sector’s efficiency up by measures such as working with the States to ensure that public schools and public hospitals are run more by their communities and less by distant bureaucracies.

If we get government spending sustainably down, if we can lower the tax burden, if we increase productivity we can make our economy so much stronger. We can unleash the creativity of Australia’s business people. I know that we are capable of more than we are currently achieving. I know because I have seen with my own eyes very successful Australian businesses competing and succeeding in very difficult fields. There is a factory in Burnie in northern Tasmania which produces 25 per cent of the world’s underground mining equipment. There is a workshop in West Gosford which, believe it or not, produces 10 per cent of the world’s aerosol springs – not a particularly glamorous product, ladies and gentlemen, but absolutely necessary to a modern economy and 10 per cent of the world’s billions of aerosol springs are produced at this little workshop in West Gosford. There’s the R.M. Williams factory in Adelaide which successfully produces high quality footwear and clothing, something which we are supposed not to be able to do anymore in this country. So, given that we can do a lot, even now, under unpropitious circumstances, how much more could we do and do well under better circumstances?

This is music to my ears. But what is Abbott going to do help these and other businesses grow into export power houses?  He hasn’t even mentioned the dollar. This is a token mention of an interest group.

That’s the challenge that the Coalition faces. That’s the challenge that I believe we are more than capable of rising to, to put the economic policies in place that will once more give us a dynamic, five pillar economy with a strong service sector and a strong education sector, a resilient and sustainable manufacturing sector as well as the mining and agricultural sectors which have been so important to us over the last few years.

Ladies and gentlemen, I am full of confidence. Yes, these are not great times but great people are more than capable of overcoming difficult circumstances and I think we are a great people. Yes, a great people currently held back by a poor government, but a great people who are just waiting to seize the future that is there for us.

I think there’s very little wrong with our country that a change of government wouldn’t fix and my colleagues and I are working steadily, diligently and enthusiastically to give a great people the better government that they deserve.
Ladies and gentlemen, thank you so much.

Sigh. If this speech captures the state of the nation then we are a sausage stuffed with risk, broken ideology, dated growth hopes and empty promises.

David Llewellyn-Smith
Latest posts by David Llewellyn-Smith (see all)

Comments

    • I simply can’t believe they’re actually running with him… a second time!

      Turnbull obviously doesn’t have the ticker for the job, while Abbott is so stupid he doesn’t recognise how stupid he is. Abbott is simply not PM material!

    • I won’t be voting for either of them.

      However, I do suggest you think about the comic potential of the next government rather than just getting depressed.

      I’m hoping for an Abbott government, with Katter holding the balance of power in the Senate. I have long suspected that in this situation, Abbott could be our greatest PM since Billy McMahon.

          • If you want to make a protest vote on the issue, say, of overpriced housing, vote Green, and be sure to let your Green candidate know that you voted for him/her because of the housing issue.

            If 100,000 people did this, it would quickly cause housing policies like negative gearing to change.

          • The only thing that would tempt me to vote Green because of housing policies, is if the Greens saw the light about the compatibility between “freedom to build” without rural zoning prohibitions, housing affordability, egalitarianism, and “sustainability”.

            There was a time when the original, honest and intelligent Greens would have seen eye to eye with Frank Lloyd Wright on living in harmony with nature, with oodles of space per person, “sustainably”, at very low cost of land, and the elimination of “the tyranny of economic land rent”. However, the Greens have long since become the useful idiots of the “dense urban” property vested interests.

            Frank Lloyd Wright, an architect, would put most contemporary economics specialists to shame in the question of actually understanding economic land rent and the connection with “mobility” and freedom (to build and travel). So would Ebenezer Howard, Henry Ford, Charles Booth, and numerous other utter non-specialists. I recommend Sir Peter Hall’s book “Cities of Tomorrow: an Intellectual History of Urban Planning”, for an eye-opening background on all this.

          • You miss the point. You don’t make a protest vote, for Greens as an example, because the Greens have the ideal housing policies, but because you vote on a single issue and want change, incrementally. If we all voted Green and let our Green rep know why, we’d get that change.

    • There is nothing wrong with Abbott! He is like a large number of Australians. He has a family a mortgage and lives in the suburbs and he cares about this place and he made the decision to make a contribution.

      He made the key point very clear… Businesses create wealth… Not governments or councils or other zombies

      Did you read that – I would have thought that would be music to all your ears, a politician stating a fundamental truth.

      Zombies – that is those who suck the life out of the economy (read as stupid bankers, gutless Venture Capital firms, businesses demanding hand outs – car industry policy anyone? and others who can work but refuse to, say 50% of the Public Servants in this country).

      The issue this country has is none of the other BS you guys carp on about – it is two very simple things – but ultimately very painful things to fix.

      It is the trillions of dollars locked up in the value of unproductive property and the Superannuation system.

      We have deluded ourselves (with the complicity of the banks and the other associated zombies; real estate agents, TV finance ‘experts’, valuers etc) into believing that increasing property values = wealth (my wife is one of them – we argue endlessly about when are we buying the next (dis)investment property)

      The property disaster is a gross miss-allocation of resources has now reached biblical proportions. It is more dangerous than even the ALP/Greens and Climate Change combined.

      Superannuation has mostly turned our share markets into giant officially sanctioned ponzi schemes, with zombies once again sucking the life blood out of the nation (read investment advisers, guru’s and banks etc).

      The ideals for super are fine but as usual the implementation was hopeless. The $1.5 trillion on super should have been used for nation building not bidding up share prices.

      For a country the size of Australia we cannot raise the capital we need to build things – we have to borrow and pay interest on increasing house values.

      Now that is stupid and I defy anyone (in power) to step up tell the country the sad truth.

      And yes Howard is also responsible.

      • “And yes Howard is also responsible.”

        I’m unsure as to why you think Abbott will be any different from Howard.

        • Never said he would – although different circumstances usually dictate different responses.

          The Federal spend level has increased dramatically as a share of GDP, as has Federal revenues, just not as much as ALP needed to feed its zombies.

          I suspect the Libs will have to do something different and better (?) in order to justify all the debt and reckless spending critique leading up to the election.

          BTW, The Febs are collecting more tax that ever before – forget the Labour BS about a collapse in revenues. They are not collecting as much as they needed.

          All governments are subject to special interest lobbying and pressure and then they have to deal with the Public Service to actually get anything done. There is the core problem, no matter how good an idea you may have, the Public Service has to “sign on” otherwise they will stuff you up at every turn.

          So I suspect we are doomed no matter what Abbott’s intentions are, although I am still happier getting screwed by the conservatives, at-least you know what your in for. The ALP will BS you all the way to the cliff’s edge and then shove you off, while you have your backed turned away looking at the view. The Libs will grab you and drag you there and then throw you off. Same result – just more honest.

          • The Feds a recollecting more tax than ever before; but as a % of GDP, it’s a good 1% lower than the Howard era.

            That aside; “We have deluded ourselves (with the complicity of the banks and the other associated zombies; real estate agents, TV finance ‘experts’, valuers etc) into believing that increasing property values = wealth” As H&H pointed out, the tone of Abbott’s speech implied his only plan appears to be to reignite this very situation by making people “feel” wealthy when they really aren’t. Hardly cutting edge policy and hardly honest.

          • “People don’t feel rich, that’s why they are saving so much themselves. We know that real wealth per head has actually declined over the last five years because of stagnant property prices and because of falling share prices and that’s led to so much more restraint in spending which is why so many of our main street retailers and businesses feel under such pressure today”

            This is what Abbott said – and it’s true is it not – we have lost wealth.

            What he did not say is “I am going start another round of asset price inflation”.

            You can imply that if you wish – however there is not much left in the ability of the banks to expand credit – even if Abbott wanted too – and there is nothing in this speech that supports that belief.

            So my point stands – Abbott is ok – sure he could be better – and I predict he will be – as the conservatives around him will ‘hopefully’ enforce some discipline.

          • It’s only the perception of wealth that has changed, as a nation we’ve always been broke. If Abbott is not aiming to expand credit then how is he going to get people “feeling” wealthy again without igniting another round of house price inflation?

          • Well that’s a fair question –

            You can start by removing chaotic decision making from the political process. The Prime Minster and Treasurer have created confusion and down right disgust for the process of government.

            Next you stop making promises that you cannot or do not intend to keep.

            Next you overhaul the processes of government to make it easier to create wealth. You can do that by ensuring innovators get to keep a reasonable share of the wealth they generate.

            Next you resist the urge to drag down the businesses that actually create wealth.

            Next you make Unions do their jobs properly – protecting the powerless.

            Next you build a new Airport for Sydney.

            Next stop supporting dead industries and start supporting those with a future.

            Next get rid of the Federal Depts of Health, Education, Climate change.

            Reduce the top two tax rates.

            Next reduce the Salary Cost of the Public service by 25% over all.

            Next you fund Local Government properly.

            Next allow Public Servants to make mistakes – they-by allowing them the freedom to actually think, but also fire those that don’t perform.

            Next put a time limit of New Start – say 18 months and then you starve.

            You fund the NDIS

            Make teachers accountable and fire 30% of the existing workforce and make the rest re-apply.

            Get rid Naplan – total waste and achieves nothing.

            Bottom line make people responsible for their lives, punish the crooks and make it clear we have to work for our living. While helping those that need help.

            Treat the population as educated adults rather then idiots that need to be looked after by mother.

            That’s a few ideas.

          • Couple of good ideas in there kyle, government does need to be streamlined, the public service more efficient and accountable but a 25% pay cut? Not sure what you expect to achieve by that, maybe save a few dollars, we have enough problems retaining project managers, engineers etc let alone give them a pay cut. It’s obscene the amount of money the APS spends on contractors simply because we can’t hire, let alone retain experienced people. The administrative side, most definitely. NAPLAN – all for it. As someone who’s moved a few times, the only way we could work out which school to send our kids to was NAPLAN/MySchool. It’s not perfect but it’s more than what we’ve had in the past to make a very important decision about your children’s education. If you have an alternate solution how we can rate our schools and present the data, let’s hear it. A lot of your points are valid but in themselves will not make people “feel” wealthy again unless you blow that housing bubble again. The factory worker or tourist operator won’t feel wealthy until the feel secure in their job which means a lower dollar. Inefficient infrastructure will not help the exporter. Asset bubbles create a dislocation of capital, allowing the RBA to use macroprudential tools as and when required to control bubbles will ensure a better flow of capital. Abbott’s tinkering around the periphery whole those hard policies are downright dangerous.

  1. We know that the private savings ratio is massively increased. It’s at the highest level in two decades because people don’t trust the Government to save, that’s why they are saving so much themselves. People don’t feel rich, that’s why they are saving so much themselves.

    If that is true, For the whole of the nation, I’ll have government deficit spending any day over household deficit spending.

    Steve Keen’s Private debt verus Public debt chart

    A small government saving seems to send our people straight to the casinos and run up a humongous tab.

    • We’re saving more than we have for many years and yet we’re still increasing our private debt. Perhaps we’re still not saving enough?

  2. Sorry, folks, hard as I tried, I couldn’t go beyond this point:

    “As I look out around this room I don’t see employers who want to persecute their workers. I don’t see taxpayers who are trying to rip off the system. I don’t see business leaders who want to spoil the environment”.

    The man is blind. And I mean it literally.

    • I could not read any of the Abbott excerpts after this ideologically-blinkered tripe in the 3rd paragraph – “..a single sheet of paper with one word on it: growth. Economic growth. That is what we need in this country, stronger economic growth.”

      When GDP “growth” is in truth mostly just the aggregate of the shuffling of ever greater volume x “value” of electronic digits (ie, debt), then it is time to stop using it as a benchmark.

  3. Come on. It wasn’t that bad. Nobody is talking currency at the moment, except Swan talking it up. Neither side have a handle on that one.

    I imagine it very difficult to detail expenditure in any case, impossible to commit to a surplus when the true state of affairs is unknown.

    Things are looking crook. The current government does not deserve to be re-elected, I seriously doubt an Abbott government could be any worse. I’m prepared to give the Libs a go.

    • Professor Tony Makin:

      “According to the mid-year economic and fiscal outlook figures, net financial worth representing the difference between government financial assets and liabilities is expected to be minus $257.9bn or negative 16.9 per cent of GDP in 2012-13. This compares with minus $18.1bn, or only negative 1.5 per cent of GDP in 2007-08.

      What these numbers tell us is that in the space of five years the federal government’s net worth position has deteriorated in nominal terms by $216.2bn, while the narrower net financial worth position has deteriorated by an even greater $240bn.

      When expressed as a percentage of GDP, this remarkable worsening of each of these key balance sheet items is in the order of a 15 per cent turnaround since 2007-08.

      The rise in net debt liabilities driven by budget deficits, not falling asset values, overwhelmingly explains the transformation of the federal balance sheet during this time…”

      http://www.theaustralian.com.au/national-affairs/opinion/golden-rule-dont-borrow-for-handouts/story-e6frgd0x-1226578235088

    • Well, good for you. I’m just not attracted to sophistry and commitments that bear no relation to reality. That’s you bread and butter, I know.

      I’m screwed. Labor must go on the MRRT alone.

      But Abbott…jeez.

      • While wanting to see the back end of Labour, I’m itching to give the Libs a run if only to prove they are not the great economic managers they’re made out to be.

        • General Disarray

          We need a sarcasm font here 🙂 I do understand where you’re coming from, Wing Nut.

          The MRRT fiasco has ensured Gillard/Swan shouldn’t be back in office, but I can’t bring myself to vote for Abbott.

          With any luck this election will have the highest informal vote ever recorded.

          • GD, following Mark Latham’s Donkey Vote call last election record number of informals were received (c360,000). Some pundits think it was this that ‘saved’ Gillard in NSW and prevented Abbott winning key seats.

            I have no doubt that should polling not improve and closer to the election date (which itself may well be much closer) Labor elements will again bray the Donkey.

          • “With any luck this election will have the highest informal vote ever recorded.”

            You can count on my active support on that one.

          • It has been reported that Union polling in Western Sydney shows a 20% swing against the Assistant Treasurer Bradbury…

        • The Libs already already proved they are not great economic managers by allowing the great Australian private debt blowout, failing to establish a sovereign wealth fund, allowing the build up of structural deficits pre 2007, allowing banks to be over reliant on offshore funding and letting Australia get to about 62nd in the world on Net International Investment Position. They also clearly don’t understand that net saving by the private sector generally reflects as government deficits. They propose a great big new tax on large companies to fund large maternity allowances for well off mums.

          Hockey keeps saying that every budget will be a government surplus under the Liberals. Has Abbott put that in writing yet?

          They are just as bad as Labor, just in different ways and favouring different sectors of the population.

          Remember you are talking about a party executive that thought Barnaby Joyce would be a good finance minister because he was a regional accountant.

    • “I’m prepared to give the Libs a go.”

      Its not as if we have much choice.
      Labor idiocy and Lib ideaolgy – urrgh
      Running a government surplus with the private sector deleveraging and running a chronic CAD, will mean rising unemployment.

    • I am prepared to give the Libs a go. But not for the reasons you outline.

      Abbott is a great candidate as a bubble economy suicide bomber. He’ll blow it all up and we can start anew.

      • Agree. It’ll be worth it just to see the look on his face when he finally knows in his bones that Johnny wasn’t really all that.

      • I’d be more inclined to liken him to a S.W.A.T. team leader facing a situation where a bunch of terrorists have taken hostages, and keep getting given more hostages to appease them so the existing hostages don’t get murdered.

        Everyone else will just keep supplying hostages and hoping for a happy ending. Abbott might just end the stand-off at a terrible cost, but never be credited for saving the lives of all the people who never became hostages as they would have otherwise.

        • “I’d be more inclined to liken him to a S.W.A.T. team leader facing a situation where a bunch of terrorists have taken hostages, and keep getting given more hostages to appease them so the existing hostages don’t get murdered. ”

          I wouldn’t. His entire economic plan is based on continuous increases in private debt (not surprising given his role in the Howard/Costello government).

          http://www.theage.com.au/opinion/political-news/cutting-public-sector-can-save-10bn-says-abbott-20130215-2egsl.html

          “He also said if the Coalition wins the federal election Australians can expect ”an instantaneous adrenaline charge in our economy” and an ”instantaneous surge of confidence”.

          ”People don’t feel rich,” Mr Abbott told an audience in Sydney on Friday morning. ”That’s why they are saving so much themselves”.”

          and

          “”We know that real wealth per head has actually declined over the last five years because of stagnant property prices and because of falling share prices and that’s led to so much more restraint in spending which is why so many of our main street retailers and businesses feel under such pressure today,” he said.”

          • If you’re right, then the guy who said Abbot would blow up the bubble economy like a suicide bomber is wrong.

            Maybe you are correct, and in my analogy, there is simply no-one who is not going to just keep giving the terrorists more hostages – i.e. by trying to “save the economy” by encouraging still more debt-based spending by households.

            If the final meltdown simply never comes and the “hostage” class – by that time a significant proportion of the population – never gets wiped out, then some gravity-defying economic magic will indeed have been performed. I have not seen any explanation yet of what it is – all the “explanations” are of exactly the kind that have been wrong in previous unaffordable-housing States that blew up or stagnated indefinitely.

    • ‘Things are looking crook. The current government does not deserve to be re-elected, I seriously doubt an Abbott government could be any worse. I’m prepared to give the Libs a go.’

      Geez 3d, the casual reader might look at that and think you are a man who 1. has ever voted anything but torynuff or even 2. has somehow had his view political affiliation influenced by the stupidity of the ALParatchiks (particularly the MRRT which you seem to get your schadenfreude kicks from)

      Of course if TestosterTone is any worse then the next government could even make its way into history as a one term government to remember.

      • check it out, it’s a tipping contest. But instead of footy teams it’s what you think a given house will sell for.

        Let the market figure out the odds

  4. What nobody on either side of politics seems to recognize is that what is needed is an increase in productive capacity and in actual production. No society can consume more than it produces long term. If we want to raise our standard of living, we have to produce more. And this doesn’t even take account of the likely hit to our standard of living if the dollar declines, making imports more expensive. Like the Red Queen, we have to run faster just to stand still.

    • PS, when I refer to production I mean real stuff that other people will pay money for. Not the broken windows fallacy stuff.

          • That would follow. Governments of the blind tend to be elected by the blind.

            There is an old Chinese proverb, “in the land of the blind, the one-eyed man is king”. This is wrong. Actually, in the land of the blind, no-one will believe the one-eyed man.

    • But the whole problem is that the nation was essentially founded on the principle of steal, slash and burn. Creating value through ingenuity and effort is not something that we have ever done. Seriously, we don’t even seem to be able to manage our productive farmland for much longer than 100 years without salinity, erosion etc kicking in. The big problem is that we’ve been able to live high on the hog despite all this for a number of generations. Just like they did on Easter Island… There is zero acknowledgement of this fact in public life. The “Sorry” speech is the closest we’ve come, but it only got a quarter of the way there. One of these days a PM is going to be forced to make a speech on these lines. Or let’s hope that one of these days we get a leader that has the courage to make it.

      • “Just like they did on Easter Island”

        But they produced amazing statues and all we’ll be left with is giant pineapples and koalas.

      • He’ll never get to be leader unless he promises the electorate the world first then after the election gives the ‘This is how it really is and this is how it’s going to be’ speech.

        We’ve essentially got what we have always voted for.

        The problem is us.

      • McPaddy, have you considered that Australia would do a lot better allowing its urban economies that currently take up around 0.4% of its total land mass, to grow, and give its urban-production sector a shot in the arm with lower urban land costs?

        It is not as if all that farmland is earning Australia a worthwhile amount per acre to justify preserving another 0.1% of available land for farming versus urban use. Nor is it as if the use of land for farming is especially “clean and green” even relative to the typical MODERN city. Ed Glaeser in “Triumph of the City” argues that “there is nothing greener than blacktop”.

        Imagine if everyone in Manhattan or Silicon Valley was doing subsistence farming, and you will see the point.

        • That could very well be the case, Phil. I’m not sure that it’s really a question of the amount of land available though. I think no matter how much industrial space we allocated, we would still come up against the widespread attitude that is resolutely against value add and innovation.

          I’m not saying there are no exceptions, but I think we all need to admit that we simply do not measure up in this department compared to, say, the US. Hell, even Italy has proud traditions of world class design and manufacture that should make us blush.

          If we had some leadership and vision (as well as a populace that realised we have “hit bottom” – really the key ingredient), this kind of thing could be created even from a base of effectively zero, as has been done in Ireland in the financial services, software and pharmaceutical manufacturing industries via intelligent FDI policies.

          My point re farmland is that our ability to act as stewards of our most basic productive asset is absolutely woeful because the whole founding principle of our nation was smash and grab, no negotiation, no compromise. That is very unusual for a nation the size of Australia (if not unique). A bit like a government that has a crushing majority, the outcome is likely to be extreme.

          • Very interested in what you say about negative attitude to “value add” and innovation.

            If this is a problem (I hadn’t really thought about it), it is a significant one. I recently did get a bit of a surprise looking at manufacturing exports as a proportion of the NZ economy, versus the same statistic for Australia, and NZ was significantly ahead.

            I really thought better of Australians. The larger economy in the first place SHOULD be a huge advantage to manufacturing. Maybe Australia has the affliction that it is not big ENOUGH to grow a home-grown Samsung or Hyundai or Caterpillar or Kenworth, yet it is not small enough for niche high value stuff like NZ’s Rakon and Tait and F&PHealthCare and Weta and MarineAirSystems, to make a difference to its economy.

            Absolutely agree with you about the difference with the USA and even Italy. Italian flair is legendary. Americans don’t have that so much, but they do have atraight-out bold entrepreneurship and venture capital.

            It is often suggested that someone who “might have been Bill Gates” has lived and died undiscovered in, say, Sudan. But we need to wake up to the fact that such people might have lived and died undiscovered in Australia. In fact, even the UK and Europe are woefully short of Bill Gates parallels, probably because they utterly lack the ingredients for anyone like Bill Gates to succeed, that are “in the air Americans breathe”.

  5. “If we don’t go ahead with the National Broadband Network in its current form, that’s about $50 billion less that the Commonwealth will need to borrow” – Tony Abbott 15 Feb 2013

    “The Rudd Government estimated to the total cost of the project initially to be A$43 billion. NBN Co later revised down the cost in its business plan to A$35.9 billion.[37] The project is to be financed by a combination of a Federal Government investment of A$27.5 billion and private investment for the remainder.” – NBN Corporate Plan 2011-2013

    Which statement is correct?

      • What do I think?
        I think you are disputing the documented Govt investment figure provided.
        What do you say is the correct amount and how did you calculate it?

        • I don’t have a strong opinion on what is the correct amount, but I would be pretty certain it is a fair bit more than the government and NBN Co are saying. Based on the performance of estimates for government-funded projects of this scope in the past.

          • Have to agree with Alex here, public service ain’t that good with managing massive billion dollar projects.

          • Temijin. Mismanagement of major projects is not in any way restricted to the public sector. Ask Messrs Albanese and Kloppers about the odd billions of shareholder money sent west through poor project management. Olympic Dam was only terminated after they found out that they hadn’t checked whether the project was actually technically feasible. Whoops! Oh, and I seem to recall some football stadium in the UK that had a few pounds of cost overruns.

            Nope, you would be fooling yourself if you thought that the private sector was any better than the public in this regard.

            It is a recognised cognitive bias called ‘project optimism bias’. Well known to competent project managers, but not necessarily to line management.

            Sad to say.

          • I probably wasn’t clear about what I meant, which was to support Alex’s original argument that given the public service’s history with large projects, it was unlikely NBN was going to be delivered on budget.

            I didn’t say that only the public service mismanages projects, but I can understand how I gave the impression.

          • The Patrician,

            Actually, there is a site run by the UK Treasury which actually has a methodology for calculating time and cost overruns for Government projects as a result of project optimism bias. I have used that methodology (in the background) for managing projects for which I was project manager (outside the public service) and found it to provide a very good estimate by which one could inject some reality into cost increase and time delay estimates.

            Temijin,

            One of the things that could increase economic efficiency in this country would be to provide realistic estimates of cost and time for projects – not only mega projects, but the myriad of small projects going on all the time which are mis-analysed constantly due to project optimism bias.

            Think about the preponderance of projects totalling in the tens of billions in a year in this country – most of which will overrun in terms of time and budget by 20%+. Just a culling of those whose real cost benefit is actually <1 would provide a huge benefit, and a reassessment or delay of the others, another benefit.

            Most people don't even see this. But it is bloody huge.

          • Thanks emess.

            Abbott claims that there will be a 90-100% blow-out in the govts investment in this project. This is an extremely serious claim well outside the bounds of accepted project optimism bias.

            What undisclosed information does he have to support his claim? Why has he not been asked to produce this information?

    • “Recessions are a good thing…preventing them leads to asset bubbles.”

      …..and asset bubbles lead to banking collapses….and banking collapses lead to currency collapses….and currency collapses lead to societal collapses….and societal collapses lead to…..The Bob Katter Party being elected, “cuz it seemed like a good idea at the time”

  6. Less tax – music to my ears.

    Anyone who pledges less government spending and less tax gets my vote.

    Labor has just kept coming back for me, whether it is changes to super, flood levy, carbon tax, all the while hinting that high earners can afford to do more.

      • Libs arent coming for me – they will cut spending. They will actually say no to some hair brained scheme raised as a thought bubble at a press conference, left to the public service who need more numbers to implement

        • Libs arent coming for me – they will cut spending. They will actually say no to some hair brained scheme raised as a thought bubble at a press conference, left to the public service who need more numbers to implement

          Like they did with maternity leave, you mean ?

        • Ahh…just like under Howard and Costello, all that middle class vote buying welfare that frittered away the surplus and created a society addicted to government crack? Abbott’s going to chop that? Jeez, what have you been smoking?

    • Vote for who ever, but don’t be under the mistaken belief that your self-interest is aligned with the interest of the nation.

  7. Garry Shilson-Josling

    “Over the last five years
    multifactor productivity in this
    country has actually declined. It’s
    actually declined by three per
    cent.”

    Mr Abbott’s comment is correct.

    However in the final three years of the coalition’s term (between 2003/04 and 2006/07), market sector multifactor productivity declined by two per cent. Actually, 1.8 per cent.

    So the declining trend in MFP established under Howard was basically unchanged under Rudd and Gillard.

    (5260.0.55.002 – Estimates of Industry Multifactor Productivity, 2011-12, for those who could be bothered.)

    • IF ONLY most people saw the significance of Multifactor Productivity, and punished politicians who oversee a decline in it, even while an artificial bubble economy would otherwise be fooling people.

      • Garry Shilson-Josling

        Actually I’m not really convinced the MFP figures really mean all that much.

        1) Labour productivity estimates, yes, they do mean something, although I think a lot of commentators don’t get the cyclical nature of LP growth, eg the very strong LP growth in the past year or two should not have been a surprise to anyone, but apparently it was.

        2) Capital services productivity (CSP), not so much meaning there, especially given the way capacity is calculated. A crude example: a novelist writes 1 book a year every year for 10 years then, in the 11th year, buys a new PC, with 10 times the memory, 10 times the processing speed, a hard disk 10 times bigger, a 10 times faster modem, etc.
        The CSP estimates are based on the assumption that our novelist is using the full capacity of the PC, therefore the productivity of the novelist’s computer equipment has fallen by 90%. S/he should be writing 10 novels a year just to keep CSP steady.
        Interestingly, the only sectors that have increased CSP in the past decade are finance, where IT is actually driven near full capacity so that assumption is realistic, and to a lesser extent, retailing, where IT is also used if not a full capacity, then at least fairly intensively as an integral part of the business. In other sectors, it’s fallen, not because (IMO) people are lazy or unimaginative, but because IT and comms equipment comes with all the bells and whistles and higher capacity year after year, whether you need it or not.
        Annual GDP would have to be about $A 440 billion higher than it is now just to have kept CSP steady over the past 10 years, let alone increased it.

        3) Combining LP and CSP to get MFP requires a whole new series of assumptions, on top of the one about constant capacity utilisation.
        – perfectly competitive markets, not just in Australia, but worldwide (wages and profits are assumed to be determined in perfect markets, and some corporate profits are determined by world prices, eg mining, so it’s the whole world or nothing – free flow of labour, perfect information and foresight, no monopolies or monopsonies, blah blah blah)
        – a translog production function actually describes the world (we’ll just skip over the theoretical possibility of an aggregate production function, though the original paper by Solow starting this whole thing off acknowledged it was a big fudge).
        – profits are always above some arbitrary rate, even when they really aren’t.

        Now you put all these assumptions together and your theory churns out the wonderful conclusion that capital and labour inputs are directly proportional to wage and profit shares of income. How remarkable! [/sarcasm](That’s why you assume profits above a certain level, otherwise it would imply negative capital inputs when a sector was making a loss and zero capital inputs when the sector was just breaking even, profit-wise.)

        So I’m very sceptical about whether the MFP estimates are really of any practical use.

        Stepping back from all the theory, is it really plausible that we as a nation are getting lazier and stupider by a significant margin year by year? (I mean, seriously!)

        The fact that your PC has 20 times the grunt that NASA needed to put a man on the moon is irrelevant if you’re using it as a word processor and that’s the most profitable way of running your novel-writing career.

        I guess a more important point is that when politicians and industry leaders bring up productivity, it’s typically just a buzz-word being used to justify something. I’m sure that most of the time they have no clue what, if anything, the figures actually mean, especially multi-factor productivity.

        Thanks for listening, I feel so much better now.

        • That is very interesting. Productivity calculations are probably only useful as comparisons between countries at a similar stage of economic development?

          One specialty that you might be interested to look into, is the way that urban land prices and urban planning affect productivity.

          Inflated urban land prices are a significant cause of the lost productivity, economic growth, and employment growth, in UK cities; land prices and indeed the planning system itself remain serious obstacles to the very kind of business start-ups and expansion that are needed for recovery, and which have been foregone for decades. The UK economy would be far better off if it had a few cities like those of Southern USA, whose policies are like “free enterprise zones” in comparison to those of the UK’s cities.

          Highly productive, high density, high land cost cities like London and New York City and Hong Kong, are actually outliers in the data. Their high productivity is due to decades of historical urban-economic evolution of “global” centres of high-income, low-land-requirement business sectors. Forced high density and high land costs via urban planning correlates with low productivity in most cities most of the time.

          This is because of anti-competitive effects; potential participants “priced out” of agglomeration economies (and simply no spare land where agglomeration economies might occur); land-intensive efficient processes in many industries made too costly; congestion dis-economies (contrary to popular wisdom, these are much higher in denser cities), and a congestion-type effect even within individual businesses who lack space and cannot afford more.

          It is also because of capital “sunk” in high land costs and diverted into “property investment”. Housing is unaffordable and low quality, leading to workforce cost pressures and social pressures. Even the national currency value tends to be inflated by various flow-on effects. These things tend to interact with each other in a vicious cycle, the reverse of which is a virtuous cycle in a low-land-cost city.

          One of my favourite cautionary quotes is from the McKinsey Institute’s 1998 paper, “Driving Productivity and Growth in the UK Economy” (the source of much of my argument above); they argue that it would be impossible for anything like Silicon Valley to evolve in the UK’s heavily-planned, expensive-land urban economies.

          You would be very interested in the McKinsey paper referred to above, and Alan W. Evans’ discussion of it in his two 2004 books. Then there is a series of papers from the LSE, summarised in the
          overview paper, “What we Know (And Don’t Know) About the Links Between
          Planning and Economic Performance”,

          http://www.spatialeconomics.ac.uk/textonly/SERC/publications/download/sercpp010.pdf

          and the slightly more recent

          http://www2.lse.ac.uk/researchAndExpertise/units/growthCommission/documents/pdf/contributions/lseGC_SERC_planning.pdf

  8. I thought the plan was to live like kings of home equity while our youth starve after giving us rent money –

    or plan 2 is start investing in anthing but property – or they could tell the banks to keep $10 for every 100 they lend on reserdential prop instead of $1.70 – when every thing gets spent on rent or mortage repayments no wonder there is nothing left to spend and maybe make it worth whilr to invest in jobs sorry just joking.

    But thank god intrest rates will rise – unemployment will come – then we can start turning our childern into debt slaves all over again – sorry someone elses children – yipee

    • I agree with your sentiment on the banks, and I am not sure they have our interest in mind….hopefully the libs will do something about it.

  9. The obvious thing is the LOTO appears to believe his own rhetoric. While he patently has no idea at all about anything, he is nonetheless sublimely happy. He seems to be a contented idiot who mistakes platitudes for something of substance.

    Of course, it is a hallmark of every successful con-artist that they seem to have full faith in their stories, so I shouldn’t be surprised by the ease with which Abbott lies. But this doesn’t exonerate him. It simply demonstrates the magnitude of his deceits and the talent he has for spouting them.

    The thing that most bothers me – that really deeply grinds with me – is the sophistry on climate change. It’s real. It’s already harming the economy. It is the biggest theme of all time, and yet he brushes the whole thing aside as if it is a fiction. Everything he says about climate change belongs in the realm of fiction, including his own so-called policies – things that have dollar signs on them but which are merely tokens of his contempt, and which neither can nor should ever be implemented. The absurd thing is he seems to know all this, making it the purest decadence.

    Climate change is difficult to deal with in the first place; and the difficulties are compounded by the opportunism of the LNP, who have have found a way to turn lies into votes. This could be from Kafka or the Gulag, but he has done it just the same. He should be thrown into exile, but instead he makes light of it, as if reality does not exist at all.

    Abbott is nothing. He is just a fake. He is not serious about the country and believes, like Kevin Rudd, in just one thing: his own biography. He has turned politics into a kind of parody. It is utterly incomprehensible that people take him seriously, and yet they do. He will drive us all mad if he wins. All of us will run screaming into the night, jibbering in disbelief while he incinerates everything.

    • Direct action on climate change will be a non-core promise.

      I think Abbott will be like Malcolm Frazer – a disaster and only two terms. One can only hope that some talent appears in the ALP to fix the resulting mess.

  10. HnH, if the Gillard/Swan team really wished to tax mineral income, they would abolish the existing optional system and replace it with an Export Tax.

    They many not be able to apply Royalties, but they certainly can regulate and tax foreign trade. They could take 5% off the top from the iron trade and maybe something similar from gold. Coal would be less. It would be simple, swift and instant. It wouldn’t be a “rent” but who cares? It’s money. The export tax would affect the taxable earnings of the miners, but the Commonwealth would come out in front. It would be very hard to argue against this.

  11. Is it not the case that interest rates have been cut to the bone…lowest in how many years?….because of a slowdown in the economy? We hear every day how the slashing of interest rates has failed to kickstart growth.

    So when the country and economy are eventually galvanized into action by Tony’s ascension to power and we all, brimming with new found confidence about the future of this great land forget about saving and pile on the debt again pushing house prices to the moon (or higher)….why wouldn’t interest rates rise strongly as a consequence?
    What would that do to many of those who heard Tony’s clarion call and increased their personal levels of debt?

  12. Hmm… 112 comments and nobody has mentioned Noam Chomsky to throw some light on the incestuous state of politics and economics in this world i.e. none of the chumps you will be voting for and who will be taking the reins later this year will really be representing your interests. Wake up. It is not a legitimate choice between:

    – Chump #A who wears a blue ribbon and is sold out to corporate interests
    – Chump #B who wears a red ribbon and is slightly less sold out to corporate interests, but prefers to attack remaining civil liberties in the name of progressive politics

    So perhaps the following Free Market Fantasies series by Noam will help disavow any delusions held by the punters here that Tony or Gillard will make a difference. Because they won’t.

    Tones and Guppie are both just disasters of degree – completely sold out to vested interests and who want to keep you (like the market) completely uninformed in your decision-making and continuing to make irrational, emotional decisions in the absence of good information.

    See here for starters (part 1 of 5)

    https://www.youtube.com/watch?v=SgFlJjnULh0

    This should also quieten down some of the right wingers who persist in expounding their theoretical economic drivel here day in, day out. Noam simply is too bright to be hoodwinked by that neoliberal crap.

      • What? No Rand Rage response from the Randroid GSM? Inconceivable.

        I’ll take “Who is John Galt” for 1000 points…

    • Seriously GSM, I felt like the Pied Piper of Hamelin there for a moment with your quick response. “First!” as they say on the net. 🙂

      Anyhow, what you need to do GSM is come to the realization that we are really living in a one-party system and that as Chomsky and others point out, society has become dominated and distracted by consumerism.

      Why? Because this leads to huge private household and business debts BY DESIGN – because, wait for it….

      1. it’s good for business profits
      2. creditors have the populous by the balls (compliant workforce crushed by modern form of slavery – contractual debts)and
      3. a growing economy artificially pumped up on the steroids of crack credit which is good for politicians’ re-election chances.

      Fancy that. What a fortuitous confluence of events.

      In this cozy arrangement, politicians of both tribes on Survivor Island cease avoiding the huge problems staring us in the face, because they have been captured by the private interests. Pure and simple.

      Surely the MMRT debate of late should be testament to that fact. WTF is anybody apologizing to the mining lobby who are mostly foreign-owned (80 odd percent) with most profits flowing out of the country!? It beggars belief that we have the alternative PM actually apologizing to these sharks in public with a ‘do no harm’ approach for future taxation of limited resources which are extracted in a one-off deal and cause large environmental damage in the process. Given their mining lobby’s track record of undermining democracy, we need to be slapping them down, not sitting around a table drafting 2 page sweet tax deals that impoverishes the rest of the nation because some pinhead in a major party is scared of being axed at the next election.

      When did every politician lose their set of balls under the mini-guillotine in this country? Why weren’t we notified – it would have been quite a spectacle to behold!

      Ask yourself these questions GSM next time you do a tax return or defend a corporate subsidy of some description e.g. why are you paying 3 times the relative rate of tax compared to some foreign multi-national raping this wide brown land which is having sitting political leaders axed in the middle of the night?

      The uncomfortable answer is that we, THE PEOPLE, don’t run this country because we accept the status quo every time we go through the motions at the ballot box.

      We need politicians who are non-aligned with the corporates, non-lobbied, non-career politicians (you know, real people, not lawyers and other hacks), driving policy from an evidence-base and who are clearly not in the pocket of big business like our big man Tones clearly is. Tones needs to realize the unsustainable nature of current business structures and household consumption in a resource-constrained world.

      So when you consider GSM that you’ve been fed propaganda by politicians, the MSM, corporates (through advertising and other brainwashing) and via educational avenues e.g. the crap that passes for a basic economics curriculum at university these days, you can choose to not empower the false dichotomy that passes as democracy in this country these days and either:

      – donkey vote
      – support a minor party
      – heaven forbid support an independent who might give a shit about your electorate and live there etc
      – perhaps agitate for political reform so your rights aren’t continually stripped away from you as a citizen in preference to global citizens in the form of tax-dodging, multinational corporate psychopaths who screw over the little man so that transnational capital is the winner in the econo-sphere rather than needy domestic citizens

      SUMMARY

      a) neither Labor or Liberal (or that bastard child Nationals Party which has no principles at all) represent the little man. They are all to a greater or lessor degree representatives of the “business party”
      b) you can’t change the situation by simply expressing your rage on Macrobusiness and elsewhere

      You can generally live a life unencumbered by debt (shunning credit at all times), refuse to leverage or buy over-inflatted ponzi assets etc.

      You can refuse to support the whole rigged deal. Like me. I simply refuse to play. All I need is a few million more like me and we can crash and reset this pathetic system. As Chomsky notes, the system is rigged to protect the interests of the rich minority against the majority – so why defend it.

      The greater population is ill-informed and simply herded into voting for one of the majors by very slick and very successful propaganda which encourages irrational decision-making e.g. witness the Stop the Boats crap at the last election for example – unbelievable.

      Conclusion:

      The great PR machine works GSM on dumbed down yokels full of piss who are currently getting a hard on somewhere over the latest edition of “The Block”. We unfortunately have 70 – 80% of the population voting for ‘No change we can’t believe in’. If you repeat this pattern like many of your brothers and sisters, perhaps it is time to change your rusted on mind and effect change. But given your love of neo-liberal fantasies and all the associated brainwashing, I’m not sure you can make the transition.

    • I forgot we should address the corporate welfare and tax loopholes subsidizing the lifestyles of the rich and famous e.g. (American examples, but same tactics applied everywhere by filthy rich) for starters.

      I’ll vote for any party looking to rid the system of the following scams for the rich, toffee-nosed, SUV/lexus driving, shallow, inbred, insular elite which aren’t available to most:

      http://www.zerohedge.com/news/2013-02-15/how-super-rich-avoid-paying-taxes

      1. Trust freezing to avoid tax (outlaw it)

      2. Overseas tax havens (time to have a flax tax on funds that can’t prove they have paid legitimate taxes back ‘home’ i.e. all those trillions of laundered cash for starters)

      3. Taking compensation in stock (no more preferential taxation arrangements to apply i.e. taxed within a given year)

      4. Shell companies to channel funds sans taxes (all possible force to be borne on these criminal enterprises. Charge them as the criminal racketeering enterprises they clearly are. Several long jail sentences for a few CEOs could calm down the level of criminality significantly)

      5. Equity swaps (clamp down on avoidance of taxes and transaction costs)

      6. Using stock option loopholes to avoid capital gains tax (outlaw practice)

      7. Deferred compensation plans to accrue taxation benefits (fine – but extend law to everyone. Otherwise can it)

      8. Taxation rorts on ‘charity’ gifts and the like (audit the hell out of this; look for massive increase in value of goods appraised)

      There are rorts galore in your neo-liberal playground GSM. Did you ever stop to think that perhaps your blessed systems and models bred this level of economic injustice in the first place because they value selfish hedonism which ultimately brings out the worst in the individual and larger society?

      Shallow economic paradigms with simpleton idols (Ayn Rand comes to mind) has a lot of explanatory power for global economic problems which abound.

  13. I’ve only ever noticed American’s mention Noam Chomsky. I know nothing about him other than the US thinks he is notionally left but a quick read of his Wikipedia page I did a fair while back indicates nothing of the sort.

    Commenters here might be punters on whether either side might make a difference but I certainly wouldn’t tar the Macro Associate with that brush. Each may have their preferred political party but that doesn’t make their analysis any less independent and impartial.

    On punting though, the masses currently seem convinced that Abbott is a sure thing & at present I’m convinced that he’s not. And in short form without getting into it, I think both parties and leaders are idiots and neither to deserve to be there. That however is not an available choice.

    • I should have clarified that by ‘commentator’ I meant members of the public who choose to comment regularly on MB who occupy the right wing of the spectrum – not the actual guys running the place and writing articles. They know who they are, so I won’t start a flame war, although I am always happy to oblige someone who wants to get it on.

      Granted, I am also not particularly fond on the false right-left divide given we all hold internally inconsistent views on most things when all thoughts are laid bare.

      However, Noam is a genius and puts false ‘free markets’ and the politics that allow it to occur to the sword in this series. Australia is not that much different to the US, so there is much to be learned.

      In 50 mins, Noam outlines effectively how in the modern capitalist system, tough love is only for the poorer and middle classes, politics is rigged to enrich the elite and to further concentrate power in their hands, and capitalism will continue to bail out the bigger man to the detriment of the little man so long as we allow it. Noam also notes how most things of value produced by the public are then later stolen by the private sector and granted monopoly rights over the invention/innovation etc.

  14. If we can’t win against the two party system then we need to perform a machiavellian strategy from within, upon the winning political party regardless.

    Who better to accomplish this than 3d1k? Totally mercenary, totally machiavellian. The smiling, confederate, brotherly assassin. No one I know is better qualified.

    Pick a weak seat and parachute our man in. Before you know it the party will blindsided to oblivion.

    The only caveat, regards our risk management is that we appoint Mav as his ever present secretary. Mav gets the real pistol and 3d1k gets to perform his knife acts on his unsuspecting parliamentary colleagues.

    Mav the minder and the MB machiavellian mercenary minebot 3d1k. No party stands a chance.

    Subscriptions required.

  15. Unfortunately Australia is in the same status as the US. We had two worthless candidates and really needed to have a box that said none of the above until you can produce better candidates……