If the government is seeking to bring inflation under control, then the last thing it needs to do is to give the population a tax cut which will be immediately spent and so drive up inflation. A far better idea would be to put the money into peoples superannuation where it will not be squandered. The scheme suggested by the unions has some merit, except that it did not quite go far enough in that the money should go to all worker's super and not just to unions.

David

There seems to be little realisation that the onset of peak oil means that there has to be a substantial reduction in the standard of living, particularly for those using large amount of fossil fuels. This can be achieved by an accord, which uses inflation to achieve the cut, but which must come associated with high interest rates. The best way to achieve the cut would be to reduce wages, but the unions would fight this to the death. Another useful way would be to reintroduce petrol rationing, with ration coupons being freely sold on the stock exchange. The government could give pensioners a substantial allowance instead of the pension, saving itself billions of dollars. Those wishing to compete for the ration cards would provide a comfortable living for the rest.

The other item that is going to get much more expensive is electricity, and I notice that smart meters, which reflect the true price of electricity, are being progressivly installed at present. Any proposal to give any more than the most minimal relief to the poor would be counterproductive, as the important thing is a reduction in demand.

"the important thing is a reduction in demand."

The only way you are going to achieve this is to have less of us demanding - a situation which is nigh on impossible to bring about unless you sterilise all fourteen year old males, or we get widespread famine, the latter being more likely.

David

The previous Accords were an expression of the class collaboration of the trade union leadership and a disaster for workers and unions. The Accord saw the wages share of GDP fall to historic lows and that of profit to historic highs.

And still the profit bludgers attacked us and continue to attack us.

The Accord also disempowered ordinary union members and concentrated power in the hands of a small group of corporatist cowboys.

The end result for workers? Longer working hours, harder work, less proportionate rewards, and a recession in 1991. Oh, and a disastrous decline in union membership and strike activity.

The interests of workers and bosses are fundamentally opposed. It is time for an alternative strategy - one in which class struggle replaces class collaboration.

"The interests of workers and bosses are fundamentally opposed. It is time for an alternative strategy - one in which class struggle replaces class collaboration."

Another poster marching forward to the past. We've had class struggles before and they no longer work. The power of employers is so overwhelming nowadays that only something much bigger than a class struggle will rein them in. Probably a meltdown in the financial system followed by a forced reorganisation of the way things are done.

VK3AUU,

There is another way to achieve the necessary reduction in demand than the one you suggested, which is to offer incentives for people to save. Under the fraudulent keynesian system that we have had under both governments for 60 years, it did not pay to save. Under the bipartisan policy of perpetual inflation, and the tax policy of taxing nominal interest instead of real interest, you would have been an idiot to keep your savings in a bank account. Of course the other side of the policy was its favoured tax treatment of borrowers, which was popular with the big end of town. Needless to say, the result is that we now have a net foreign debt of nearly 600 billion, and it won't be much fun if it is called in.

It can only be hoped that the Rudd government will implement its stated policy of increasing saving by encouraging, not forcing, people to save. If you force people to do something they would not do voluntarily, they will just do the minimum. If you encourage them instead, you will achieve much more.

The other thing that is obvious is that in the near future China will be the principal source of global finance, and that as a result the system will be run along Chinese, not American, lines. This may include a return to the Gold Standard, which kept the world honest for 214 years (from 1717 to 1931), and caused the net effect of inflation over that period to be zero.

The media, which has a vested interest, since it wants people to spend on the items it advertises, will of course oppose this. This is often manifested in their comment about the alleged cost to the budget of superannuation concessions. What they never mention is that if there were no concessions, who would put money into super? Apart from the national security benefits of reducing our foreign debt, superannuation can be shown to be beneficial to the budget, as the 15% tax on super exceeds the 10% withholding tax on the foreign debt it replaces.