Good morning all,

Intriguing discussion. Thank you.

@Yabby, re: “The graphs in that speech explain it for you, Alan.”

Yes, the graphs are informative. Thanks. But they support rather than disprove the assertions in this article. No?

And present problems for you, Yabby. Correct?

For example, paragraph 2: “Business investment in Australia is higher now as a share of GDP than at any other time over the past 60 years (Graph 1).”

Yet I’m sure I read somewhere “Just ask the business community what a disaster Labor has been.”

Re: “Brazil came nowhere near that investment by mining, in terms of GDP”

Correct. And this is relevant how? Pretty sure I haven’t mentioned Brazil here at all.

Yabby, you still have the problem of why selling to China saved Australia but didn’t save any other big exporters to China in 2008-09. Or big exporters of high-demand, high-priced minerals.

@Shadow Minister, re: “That a few individuals at one of his [Murdoch’s] many subsidiaries overseas acted unethically in obtaining information does not translate to Australia.”

So how did you go with the quiz question, SM?

How many people, including senior Murdoch executives and police officers, have been arrested and formally charged as a result of the illegal phone-hacking scandal in Britain. [Just in Britain. Just the phone-hacking, not other criminal activities elsewhere]:

(a) a few individuals
(b) 34 arrested, 6 charged
(c) 64 arrested, 13 charged
(d) 104 arrested, 31 charged

Clue: It’s not (a) or (b).

Are you familiar with the Australian Press Council, SM?

@all, regarding the power and influence of Rupert Murdoch, has anyone examined the research in the USA?

According to the academic study reported in Rolling Stone, linked above, reading Murdoch publications not only makes readers less well-informed than readers of other journals, but less well-informed than people who don’t read any newspapers at all.

Intriguing.

And is anyone following the fortunes of the group trying to get a paid advertisement critical of Mr Murdoch’s coverage run on TV in Australia today?

http://www.smh.com.au/entertainment/tv-and-radio/antimurdoch-ad-banned-from-television-20130903-2t37c.html

Do you really have freedom of speech?

Ah, you crazy Aussies!

Cheers,

Alan

Poirot, if you ever read the Perth Sunday Times, you will notice that Murdoch gives it his best shot to get up the State Liberal Govt. It sells papers! Pushing emotional buttons sells far more papers than complicated data analysis. That is why Rupert became rich.

Alan, the graph says it all. Mining investment grew in a decade, from about 1% to 8% of GDP, straight through the GFC. It continued to grow, despite Mr Rudd, who once nearly derailed it, only to have things patched up by Gillard. You mentioned other countries exporting iron ore. There are only really Australia and Brazil, which matter. Brazil has 10 times Australia's population, yet iron ore exports are similar. Per person GDP, that makes a huge difference. Had miners not invested as they did, our economy would have gone through the floor. Miners are limited as to where they can invest, places like Africa and other corrupt countries, are not for the faint hearted. Not so with manufacturing, where there are many options. Labour has made sure that Australia is not the place to invest there.

Alan
I do not say trade with China alone averted recession, I say trade with China AND a 100-year high record in the terms of trade AND good luck and good management in the financial sector AND an inherited strong fiscal position AND fiscal stimulus saved us from recession. It is you who insist than only one of these factors, the last, was overwhelmingly predominant.

Your last post contradicts your article. Your post says “Henry and I don’t disagree about surplus/deficits, structural or nominal.” Your article says

[quote begins]

Henry Ergas in June:
‘… the Howard government ran structural budget surpluses every year averaging 1.4 per cent of GDP; while every year it has been in office, Labor has run structural deficits averaging 2.8 per cent of GDP.’

And:
‘… literally all the structural deficits were incurred on Labor's watch.’

Both untrue. Accurate data shows the average budget surplus for the eleven years of the Howard Government was 0.79%. The average budget deficit during the five years under Labor has been -2.38%.”

A Treasury paper in May showed clearly that Australia's structural deficit problem began in the Howard years:

‘The estimates suggest that the structural budget balance deteriorated from the mid-2000s, with the point estimate of the structural budget balance falling into deficit just prior to the GFC.’

[quote ends]

The link you provide to “prove” the first of these statements “untrue” shows estimates of the underlying budget balance, NOT the structural deficit.

If the point estimate of the shift to structural deficits really occurred just prior to the GFC, as the Treasury paper you quote says, then

a) Ergas is right to say there were surpluses under the Coalition and deficits under Labor, and
b) The shift to structural deficit cannot be justified as a response to the GFC, because it happened before the onset of the GFC

Greetings,

@Yabby, thanks for your persistence here. Still seems you have trade with China coinciding with the GFC. But that’s all. You need more to demonstrate causality.

This analysis still seems safest:

http://onlineopinion.com.au/view.asp?article=15380

@Rhian, re: “I say trade with China AND a 100-year high record in the terms of trade AND good management in the financial sector AND an inherited strong fiscal position AND fiscal stimulus saved us from recession. It is you who insist that only one of these factors, the last, was overwhelmingly predominant.”

Correct. Refer here:

http://onlineopinion.com.au/view.asp?article=15357

Virtually all nations with zero debt or money in the bank were hit the hardest by the GFC. So ‘strong fiscal position’ was no cushion.

Similarly, sound banks made no difference; trade with China and trade in minerals worked nowhere else.

The only correlation we find is with stimulus spending.

Here’s another approach: If your scenario is right, Rhian, then the country second to Australia in “trade with China AND terms of trade AND a sound financial sector AND strong fiscal position AND stimulus” would have done second best. Right?

Seems logical. Which country was that? Brazil? Canada? South Korea? Taiwan? Other?

Nominate whichever you think closest. All fared disastrously.

Now consider the “overwhelming stimulus” theory. Which country was second to Australia in fast, hefty stimulus at the outset – and on that factor alone?

According to the IMF, Poland.

What was Poland’s result through 2008-09? The only other economy in the OECD to cop just one negative quarter.

Seems strong prima facie evidence.

No?

Re: Henry Ergas, yes, his figures appear false.

To my first query, he wrote (June 6):

“My numbers on the structural surplus and deficit come from the PBO publication – averaging using the data in their charts.”

When I asked where in the publication, he again said he would get the data:

“… my numbers are correct to a decimal place, according to my discussions with PBO .... In any case, once I get the PBO file I'll send you the exact data.”

Have asked twice since, including while preparing this article. Nothing.

Cheers,

Alan

Alan, you’ve generated some interesting multifaceted discussions here. That’s great. It’s just what I like to see on this forum – an article writer come back and fully discuss all aspects of the subject.

Thanks for the continuing dialogue with me.

I wrote:

>> We are forever struggling to build ‘much-needed’ infrastructure and improve services. No matter how much effort goes into this over the years, the need remains. <<

You replied:

<< Yes and no, Ludwig. Infrastructure and services provide jobs, apprenticeships, incomes, profits and add to the national estate. All good? >>

Not all good. Not if it is isn’t leading to a net gain for the whole community.

If we didn’t have high immigration and were therefore able to put our efforts more into improving infrastructure and services for the existing population and less into duplicating them all for ever-more people, it WOULD be all good!

We’d still have jobs, apprenticeships, incomes, profits and REAL improvements to add to the national estate, yes?

And we’d be heading towards a balanced economy, an overall surplus, a healthy environment, a steadily improving quality of life and a sustainable society, all at the same time!

I wrote:

>> If we were to head towards a stable population, we would be able to divert a great deal of this effort from duplicating I&S for evermore people into improving it for the existing population. <<

You replied:

<< No problem with this, Ludwig. >>

Excellent!

<< But the world is a long way from population stability. Meanwhile, Australia can accept migrants and appears to be doing so beneficially. >>

We would still have a significant immigration program if we reduced it to net zero, which is what I have always advocated.

Currently we may appear to be accepting a large migrant intake beneficially for our nation’s economy. But if we look more closely and consider all the things that I have raised, we will see it all very differently… and see that current appearances could well be a very long way from reality.

I often wonder what Alan thinks that he is achieving. He continually posts articles in the left whinge fringe blogs such New Matilda and the Independent Australian, that are only read by Left whingers who are unlikely to have ever voted for anyone other than the greens or Labor.

The majority of voters especially swing voters have never heard of these turgid blogs, and the moment he posts his trite articles full of manufactured or cherry picked information on OLO, he does not get his usual sycophantic response, but people calling him out on his distortions.

Alan is suffering from a delusion of relevance.

In two days Labor will be swept from power, and the real audits of the pink batts, BER, NBN can begin and unearth the steaming piles of dung that Labor has tried so hard to hide.