Scummo fully endorses making Australia stupid again

Via Domain comes Scummo’s endorsement of Make Australia Stupid Again (MASA):

“At the end of the day when we have to decide, do we think that the United Australia Party would be more dangerous to the Australian economy than Bill Shorten, the Labor Party and the Greens? Well I’m sorry, I think Bill Shorten the Labor Party and the Greens are,” he told the leader’s debate on Monday.

OK, so what are MASA policies?

Other policies expected include:

  • $150 a week increase in the age pension at $15bn cost;
  • tax deduction for the interest paid on ALL mortgages at $7bn cost so long as it is only new mortgages. If it is all (and it would surely have to be) then it will cost something like $60bn;
  • 20% cuts tax paid by people domiciled more than 200kms from major cities at unknown cost;
  • restrict super funds to investment within Australia (cause we live on an island);
  • fast trains for Sydney or Melbourne to deliver peeps to CBDs within one hour from 300kms which would probably cost $100bn being very conservative.

As well, by killing PAYG, there is a new $70bn black hole in the Budget for the first year that everyone seems happy to ignore.

Prima facie, then, amortising MASA over three year forward estimates would deliver an annual Budget black hole of roughly $125bn.

To offset that we would have an extra $70bn to spend in the private economy in the first year plus enormous asset price bubbles in housing and shares for several years. This would send consumption crazy so the MASA claim that GST would increase is true, though that would all go to state governments not federal. Indeed, state budgets would boom with stamp duties too.

The Federal Government would benefit from higher income tax and capital gains but lose on lower nominal growth as interest rates were hiked by 150bps and the Australian dollar shot straight to 90 cents. Let’s be very kind and say that the Budget fills in $25bn of the $125bn black hole.

Then, in two years, the party would end abruptly as the RBA panics with inflation taking off. Housing and share prices would crash and we’d find ourselves back where we started except with $300bn more public debt, an additional $300bn in household debt, a titanic $100bn structural Budget black hole growing every minute as China’s structural slowdown hammers commodity prices and the local economy implodes.

We’d need to immediately reverse many MASA policies to repair the Budget, exacerbating both the housing and share market crashes and intensifying a pro-cyclical super-recession sending us into some kind of downwards growth spiral that would not stop until the AUD hit 30 cents.

This is all back of the envelope (like MASA costings) but it gives the gist of it. It would certainly be fun but I’m not sure it qualifies as responsible.

Perhaps Scummo should take another look?

Houses and Holes

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the fouding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.

He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.

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Comments

  1. Anything is better than the clown world Labor/Greens will impose on Australia if they win.

  2. “Make home loans tax deductable

    This egregious typo is reason enough not to vote for UAP.

  3. I voted yesterday, and put the majors last in the reps, and filled in 18 on the senate and they didn’t get a tick. I avoided the red/blue/green shirts by walking the roped off grass to get to the door. On my way out others were doing the same on the way in.

  4. I like this plan. Goose the economy big time, rort it silly, and fuck off just before it burns to the ground.

    Sell my USD when the Coalition of the nutters wins and buy a pile when the AUD hits 90c and ride it South into the long long winter of discontent

  5. Not that the following will do anything. But I sent my views to a prominent radio station.

    =====================

    You know X.

    If someone in politics would just slam the door on population, freeze it for a number of years to give our haemorrhaging cities time to breathe and catch up with infrastructure, to loosen the valve on increasing healthcare pressures and waiting lists, to reduce the high numbers of people going for fewer and fewer jobs, to allow the standard of living to improve on a per capita basis.

    If only in politics we had people who could not be bought.
    If only in politics the retailers and developers and foreign interested groups truly had no sway in how political decisions were crystallised.

    But then again, maybe I’m the one that needs to move to Mars, along with all the voters who want the same thing yet continually shout and fall on deaf ears.

    These are the reasons us in the real world have given up.

    A lot of what Clive Palmer says resonates with the average Joe out here in the real world. I suppose that’s because the 2 major parties choose by design to not go there.

    Having said that, apparently Palmer’s campaign has cost over 50 million dollars! And it’s all me me me!

    With the money, he would have secured more votes by doing things this country so desperately needs, like building emergency social housing accommodation for vulnerable people. Did you know X that the social housing waiting list average time for priority access candidates is FIVE (5) years?

    Meanwhile, we want to build more footy stadiums etc.

    This country is so screwed for our future generations it beggars belief.

    S

    ===================

    God (or someone/something) help our kids.

  6. I’m pretty sure Palmer’s decentralisation policy via tax discounts is flat out unconstitutional.

    He’d do better with Pyne on his side. Get some Submarine contracts for Alice Springs. That’ll bring the jerbs.

  7. GeordieMEMBER

    Having spent the week with one of my boomer parents and their partner, I am completely dumbfounded as to how utterly brainwashed they are. Here are the key points:

    * The Liberals are the best economic managers, end of story.
    * The Libs create surpluses and save money, the ALP then spend it.
    * All retirees should not be taxed at all. Period. Saves money on pensions, you see.
    * Everyone who doesn’t have a job should get one.
    * Anthropogenic climate change is a complete fiction.
    * War is a thing of the past, and passive acceptance of that is more than adequate.
    * The MSM is 100% fact, evidence based independent journalism and reading the SMH and The Australian gives a well rounded, centrist view of the nation.

    Doing my fricken head in.

    But they can’t explain any of it. For example, they can’t explain what the reforms to franking credits are and how they’re a bad idea. Endless, baseless opinion and nothing more. Might as well be a religion.

    You can’t argue when facts have no value and logic is second to belief.

    We’re still screwed.

    • Unfortunately, that is what most Boomers I speak to say, or something fairly similar to those things.

      When I point to them that they’ve ridden a private credit super-cycle for 40 years (generating a trend of govt surpluses), and that they are not nearly as responsible or deserving of their success as they are, they generally don’t know what to say as most of them haven’t thought of that before…

      “Paddling on tsunamis” is how I describe most of their “success” – you are swimming, yes; and you are going forward, yes; but most of it is not your effort….your are on a private credit tsunami….!!

    • There needs to be an age limit on voting at the higher end as well as the lower end. My suburb seems to have an average age of 100 and their only sources of information are newspapers and the daily television news. Subsequently I already know some liberal parasite will win comfortably.

  8. Amazing how he says nothing about mass immigration. Why the heck does a miner need mass immigration?

    Alaska exports oil to South Korea – neither Alaska nor South Korea have mass immigration.

    “create more jobs”

    But the jobs are given to 457 visa staff.

    Instead of just the slogan, copy the policies of Trump. Ban the unskilled wives of 457 visa staff from working here:

    25 Apr 2019

    https://www.wired.com/story/h-1b-visa-rejections-spike-under-trump/