AA,

Maths not your strong point I see. The figure you quote is per person, and is out of date I used $13000 pp. To get to the average family you multiply by 4.

1) Unless you were planning to use child labour, the pay back time would be significantly longer.

2) How much income do you get from the $9bn cash hand out, the pink batts, or the vastly over priced school halls? The income from this huge expenditure is virtually zero.

3) Unemployment doubled? unlikely. The school halls pushed up construction costs due to the lack of labor, and so the stimulus was largely wasted.

4) "Australia has net debt at 11.6%. Scheduled by the IMF to rise slightly, then fall to 9.7% within five years." Only because Labor will be in opposition. With Labor in government, the debt has continually risen in spite of record revenues. The crisis is the inability of labor to reign in spending which threatens our AAA rating.

5) That other countries are in a worse condition, is like the man with one eye compared to the blind. It is still better to have both eyes.

Greetings all,

@Ludwig, re: “if we can accrue debt during the best of times, we really are not likely to alleviate that debt when things pull back even just a little bit from the best of times.”

What are the best and worst of times, Ludwig?

Was the boom from 2000 to 2007 the best of times when Australia failed dismally to save income generated – then 2008 onwards the worst of times since the Great Depression?

Re: “we have two parties competing to show who can create the most meaningful short-term gains.”

Really? Would you agree the present Government has pursued long-term national benefit at the expense of popularity and electoral success? It certainly looks like being thrown out on its ear – despite sound management.

@Shadow Minister, yes, Norway, Singapore and Taiwan are in the top twenty. Norway and Singapore are in the top ten, along with Switzerland, Israel and Canada. Taiwan isn’t.

All are well behind Australia.

Norway experienced four negative quarters through the GFC – to Australia’s one; and five negative quarters since – to Australia’s one.

Norway currently has GDP growth at an annual rate of negative 2.7%. Australia has been positive since the devastating floods in 2011.

Norway’s taxation rates is 42.9% – to Australia’s 25.6% [OECD figures]. Inflation is double its interest rate. Norway ranks 31st on economic freedom by Heritage Foundation to Australia’s 3rd.

Singapore copped four consecutive negative quarters in 2009/10 – three of them greater than 8%! Then five negative quarters since 2010.

Along with most of the rest of the world, Singapore’s jobless virtually doubled through 2009 from 1.7% to 3.3%. Australia's moved up from 4.5% to 5.8%.

Singapore is doing worse on GDP per capita, labour costs, retail sales year on year, and interest rates – with a puny 0.03% offering no return on savings. Much worse on productivity, with seven out of the last nine quarters all negative.

Singapore also fails on economic contribution to the world. Australia, for example, resettles around 30,000 refugees each year. Singapore around none.

Taiwan lags even further.

Cheers,

Alan A

Hi Alan,

Seen the latest polls. In all the marginal seats apparently the libs lead them all. Both lab and lib msrginal. What is more significant is that in each of the major cities the seats polled show 2 party preferred 40:60. Ie Corangamite, in Melbourne. Forde in Brisbane, Bradbury's and Bowens in Sydney. Why would the other metro sests be any different. Now do the sums. Oh Dobell is similar.

How dumb were labour to switch back to Rudd.

His polling was always going to fall back to where it was before Gillard knifed him. You know after Gillard knifed him it took 3 months for her polling to reflect anger at her. The same is now happening to Rudd. Lab primary vote will be at 30% within days if it' s not there already. But here is the killer. For months now polsters have been saying there is a relatively large number of disengaged who refuse to answer their polls. The leftie media are now claiming they are mostly young people who haven't been interested. Well Alan I reckon they are people so angry with lab that they have their cricket bats lifted and their teeth gritted in anger waiting for election day.

Enjoy

Keith.

Shadow Minister,
Your points 2, 3 and 4 make little sense.

2) "How much income do you get from the $9bn cash hand out ...."
My comment;
How much income does who get? When each recipient spends, the next business in line gets income some of which goes to pay labour and other costs and some goes to savings. In the third round the same thing happens and after enough rounds the whole cash hand out ended up in private sector savings probably paying off debts incurred by that sector due to the Howard surpluses. Expenditure on imports are lost from the Australian economy.

3) "Unemployment doubled? unlikely. The school halls pushed up construction costs due to the lack of labour, and so the stimulus was largely wasted."
My comment;
The school halls increased employment and savings in every industry that supplied materials for the projects. The costs increased because under our federal system the states diverted some of the money to pay their own bills.

4) "Australia has net debt at 11.6%. Scheduled by the IMF to rise slightly, then fall to 9.7% within five years. Only because Labor will be in opposition."
My Comment;
Over six years, all of the total government deficits together, over and above that necessary to compensate for the six year deficiency in the current account, ended up in the savings and debt reductions of the private sector. Over any period;
Gov. sector deficit = Priv. sector surplus + current account deficit

Read up on sectoral balances at the Modern Money Theory primer I have recommended several times.

Ratings by agencies have no meaning for a money issuing (sovereign) government.

<< What are the best and worst of times, Ludwig? >>

Alan, according to economists, politicians and their ilk, the best of times are when we have maximum export income, low unemployment and high economic growth.

When this falters, even slightly, there is increased pressure on government to spend, spend, spend, in order to stimulate the economy and placate increasing unrest, is there not?

Things don’t have to be particularly bad in order for there to be a whole lot of pressure on government to increase borrowing…. and with their inherent short-term outlook, most governments readily kowtow to this.

<< Would you agree the present Government has pursued long-term national benefit at the expense of popularity and electoral success? >>

YES!

And look what’s happening to them – they’re about to be thrown out on their ear!

Notwithstanding some considerable degree of mismanagement, their very desire to work towards long-term goals has not gone down well with the votership.

So as I say, it points strongly towards governments, of any persuasion, being strongly inclined to strive for short-term achievements, and that those who buck this trend pay for it, big time!

Let’s face it; even without the pink batts debacle, border-protection corruption and other misdemeanours of the Rudd/Gillard government, their long-term strategies would not have gone down well.

So given this inherent huge problem with our political system, coupled with the huge problem of our political system: the worship of continuous growth, whereby we have a rapidly increasing demand for everything - how on earth are we ever going to get into a position where we can actually reduce expenditure and increase debt repayments?

Hi Ludwig,

Thanks for your responses.

Re: “Alan, according to economists, politicians and their ilk, the best of times are when we have maximum export income, low unemployment and high economic growth.”

Correct.

Re: “When this falters, there is increased pressure on government to spend, spend, spend, in order to stimulate the economy and placate increasing unrest, is there not?”

Not really. The Government’s stimulus spending decisions were not responding to community unrest. The media was actually demanding that the spending stop. The Government did what it considered right, regardless of the clamour of the malicious media.

Re: “Notwithstanding some considerable degree of mismanagement, their very desire to work towards long-term goals has not gone down well with the votership.”

First, there was little actual mismanagement. Much baseless media condemnation.

Second, voters don't respond to what the Government is doing. Voters respond to what the media declares the Government is doing. The media in Australia, as has been proven abundantly, are determined serial liars.

Re: “So as I say, it points strongly towards governments, of any persuasion, being inclined to strive for short-term achievements, and that those who buck this trend pay for it, big time!”

No. It points to governments having to do what Rupert Murdoch and Gina Rinehart tell them to do regardless of the interests of the nation – or pay for it big time. We are now observing Mr Abbott kowtowing to them both.

Re: “Let’s face it; even without the pink batts debacle, border-protection corruption and other misdemeanours of the Rudd/Gillard government, their long-term strategies would not have gone down well.”

There was no pink batts debacle, Ludwig. 100% media fabrication. See here:

http://www.independentaustralia.net/2013/politics/we-really-must-talk-about-the-pink-batts/

The border protection “corruption” was the result of the Opposition and minor parties blocking the Government’s intentions relentlessly. No?

Re: “So given this inherent huge problem with our political system … how on earth are we ever going to get into a position where we can actually reduce expenditure and increase debt repayments?”

Australia is doomed, Ludwig, as long as the media maintains the destructive control it now exerts.

Cheers,

AA