Whoever wins this election is likely to presented with the worst economic outlook faced by any incoming government since 1975.

These are some of the issues the government will be faced with:

* rising interest rates. The recent rise is merely the first of many to come over the next year or so. Even a 25 point rise has the folks screaming about mortgage pain. Wait until you see a 200- or 300-point rise.

* rising inflation. Its already at 5% but will go higher yet. In the US its at 8% and rising. Double digit inflation in Europe is likely. Inflation in these places will be exported here.

* while real GDP remains strong and will benefit from the increased prices of commodities following the Ukrainian invasion, this is a temporary sugar-hit. Forecasts are for real GDP to fall significantly in 2023.

* we now have a debt approaching $1 trillion with a massive structure deficit that may see the gross debt getting to $1.3T in the life of the next parliament.

* the international situation is disastrous. Probable stagflation in the US…welcome back Carter. Recession in Europe is widely forecast and growth estimates for China are being downgraded.

So an incoming government is faced with addressing the problems caused by the profligacy of the ‘lockdown’ debacles. Yet is either party even talking about how these issues are to addressed? Not even close. Indeed both sides now seem to have adopted the policy that everything can be addressed by just throwing money at it. When petrol prices rose and threatened Lib votes, they just cut the excise. Cost of living increases? No problem….here’s $250. Medical costs worrying you? Fear not…we’ll cut the costs. Not by actually cutting costs mind you. Instead we’ll subsidise meds and get the next generation to pick up the tab.

The Libs are a financial disaster and have abandoned all that even looks like fiscal conservatism.
And the ALP are the ALP so no joy there. Whichever way we vote, things are going to be rough for the government but worse for the people.

I think you're overestimating the problem.
Headline inflation is high, but that's largely due to supply problems - partly because of Covid and partly due to the Ukrainian war. These have caused prices to increase, but it's a one off - the supply problems are unlikely to worsen. Therefore the underlying inflation rate isn't particularly high. Even the headline rate is pretty low by late 20th century standards, and will fall when commodity prices do.

If Europe has double digit inflation, the Euro will probably fall against the Aussie dollar, preventing their inflation being exported here.

Practically all of Australia's public debt is in Australian dollars, so there's literally no chance at all of Australia being unable to service its debt. And no generation is under any obligation to eliminate the debt, so please stop spreading the lie that the next generation will have to pick up the tab! It's the current generation that pays, be it in higher taxes, higher interest rates or higher inflation (yes, measures designed to reduce inflation can have the opposite effect if they don't result in higher productivity).

Germany's economy will be destroyed without Russian gas

we now have a debt approaching $1 trillion
maze,
I would not at all be surprised if 95% of that has gone towards Public Service bureaucracy !
Those who work in producing industry create their own revenue & it's that what makes economies rolling on.

That idea doesn't seem to worry the candidates busting a gut to win the election.

The rise in interest rates is no big deal. The shock/horror comes from people too young to remember really high interest rates, when people had the grit and intelligence to adjust their spending to hang onto their houses. Interest rates have been stupidly low. No matter who takes government this time, the RBA will still be independent and will set interest rates.

We can't do much about our politicians, who are pretty much the same, no matter who they are or what they say. It's up to us to take control of our own lives and not rely on government - any government. Life will go on with the Coalition or Green Labor. It's time for the gimme, gimme generation to realise that the socialism now beloved of both parties - only because that's what the naive people wanted - doesn't work.

ttbn,
Reminds me of a cartoon on Facebook where a Uni graduate sits in front of a whiteboard onto which the lecturer wrote; Student Debt problem solved. You took out a loan-pay it back !

"The Reserve Bank’s interest rate decision didn’t even over-excite the Treasury debate, let alone dominate the campaign trail yesterday. Barbs were exchanged about cost of living, and the PM called on banks to pass on the rise to savings as well as mortgages, but the caravan simply moved on". (A Terry Barnes observation).

individual.

Good one.

The people most affected will be those who took out "liar loans" - understating their expenses to get a bigger mortgage. How stupid can people (a surprisingly high number) be!

Albanese is an accident just waiting to happen.
Just his campaign shows enuff incompetence that we should know what to expect.
If we vote this guy in, then we deserve everything we get.

If you can't support Scomo, and there's a few reasons to think he's let us down;
- Then the smart vote should be none of the above.
Or, the only choice is independents with Majors last.

Democracy's really on its last legs if this is the best we can do.
What happens when change is only for the sake of change,
- But the change we can expect is not going to be for the better?
What are our options?

Here's a few thoughts I wrote on another thread:

How will you vote
Re-elect Morrison so he can gloat?
Or make it easy with Albanese?
Or is Pauline Hanson in with a chance?
Perhaps Big Spender Palmer can lead the dance?

The outspoken Greens are climate aware
Concerned Independents really do care
Whoever we support will find
It's going to be a bumpy ride

Again, I find myself in full agreement with TTBN. This gentleman seems to have both, his ear to the ground (being the pragmatist he is) and bucket loads of 'C D F' as we used to say in the CIB whenever we spoke of the absence or otherwise of commonsense. And his commentary today is no exception to his usual pragmatic approach.

INDIVIDUAL is another contributor embrued with an abundance of CDF 'Common Dog F...' as evidenced by the thoughtfulness of many of his articles.

There are many such folk on here who exhibit pragmatism, usually those who've had to be industrious and frugal with what they've earned for most of their adult lives. And for whatever reason, chose careers that didn't include a few years at Uni. You know the type of men and women to whom I refer?

Some even go so far as to say, it's many of these types of people, who helped build this great nation despite several world wars and a crippling depression.

And I suspect it's people of my generation and perhaps later, who appear to be dragging this once proud nation asunder?

Aidan,

You say inflation is a temporary matter caused by supply-side problems. They've been saying that in the US for over a year now and only recently did the authorities there concede that, it is indeed an on-going and immediate problem. Hence the raising of rates there by the largest jump in a generation.

The inflation in Australia is caused by over-spending by the government. Of course, the only way they could implement the lockdown was by throwing money at people who were no longer productive, but that does have consequences, which we are now seeing. Whatismore, in classical fashion the inflation is being locked in with demands for wage rises coming left and right, and rising transport costs flowing throughout the economy.

I know that you are wedded to the concepts of Modern Monetary Theory and think that governments can borrow and spend without consequence. But that fallacy is now being exposed all around the world. It may be true that governments don't have to and may not pay the debts back, but that doesn't mean the country doesn't pay for those debts. We are starting to see those payments now with higher inflation, higher interest rates, lower growth and declining consumer confidence.

The notion that we could borrow money, spend it willy-nilly and not suffer consequences was always bonkers. The next generation may not have to pay the debt back but they will pay with lower standards of living than would otherwise be the case.

PS..."Inflation is taxation without legislation." Friedman.

The point here is that the next government will be faced with these emerging economic problems (is disaster too strong a word?) and neither party are suited or prepared for the challenge. But as the problems grow and become more apparent, the government, whoever they are will be blamed.

Although the real culprits are the most recent leaders, the current government will carry the odium. This is why winning will be a poisoned pill. Addressing the errors of the last 5 years will take a generation, but the government for the next 3 years will carry the burden and blame for not doing so.

This is caused by Josh Frydenberg and Morrison, so its to be hoped that they will exit the scene. But there is no one, literally no one, in the ALP who is capable of doing what is needed. The last time a Labor government was greeted with economic problems of this scale they had the personnel to do what was need. But Albanese ain't Hawke and Chalmers definitely isn't Keating.

Interesting times...and you know what the Chinese purported say about interesting times.

Not so shore Labor had the right man to handle the problem mhaze. I was living on a resort island, with all keep provided, [I don't drink smoke or gamble], so my bank A/C grew quite quickly. Plus I was getting $17,000 a year in interest on just $100,000 deposit. It was great for me, but those with borrowings were often in sever trouble at over 17% interest. Quite a few I knew lost homes & businesses.

Business loans were even worse. The division I ran was paying over a million in interest on just over four million borrowings. We were profitable to handle it, but many were not.

The whole covid thing is even more ridiculous when you think just half a dozen covid cases had Victoria locked down for months, but now anyone can fly in no questions asked. All the destruction of lives, & money wasted was for absolutely nothing.

The next real challenge for whoever "wins" will be making home ownership easier despite rising interest rates and inflation without allowing the value of existing property to fall.

Shorten was on the right track about "grandfathering" existing negative gearing and then restricting it to new dwellings but now the ALP has been spooked into abandoning it.

The best that the Libs have suggested (besides buying a house in order to avoid rising rent costs) was to "get a better job that pays more money".
Visionaries!

mhaze: "The last time a Labor government was greeted with economic problems of this scale they had the personnel to do what was need."

Well, to be fair, they were in a way better position to handle it because they had a lot of public assets that they could flog off to get them out of trouble (a trick which was continued in Howard's era).

Note however, that in me saying this that I'm not against the privatisation of national assets that has occurred. Indeed, I'm all for it: the public sector simply can't run things as efficiently as the private sector. But I'd dead against is the racking up of public debt and treating it as a good thing- current monetary thinking is foolish. What the government should be doing is saving a bit of money in the good times (ie: the last 30+ years pre-covid) for the bad times (eg: covid that we've just had). Public debt will almost always* eventually cause inflation and inflation is more than as mhaze quoted "Inflation is taxation without legislation", but rather a taxation without legislation on the poor.

*:theoretically public debt spending can increase the productivity of the economy enough to offset the cost, (eg: building a new bridge or educating the young and (re)skilling the workforce) but in reality most of the spending is wasted on non-productive programs. And when it is spent on a project that successfully boosts productivity, since it is the government doing it you can be london-to-a-brick sure that it would have been better for the private sector to handle it.

Stopping all the green garbage restricting subdivision would go a long way towards making housing affordable, as it would drastically bring down land costs.

I am not allowed to split off a block off my 19.5 acres for my daughter to build on, nor can she build a second house on my property, all for greeny ratbagery. This despite 3 acre blocks opposite me on the other side of the road, 4000 Sq Mt blocks just a kilometer away, & 400 Sq Mt just a couple of Ks up the road.

mhaze,
>You say inflation is a temporary matter caused by supply-side problems.
Not quite. I say a large component of the inflation is a temporary matter caused by supply side problems. There is also some conventional inflation that can be dealt with by increasing interest rates or tightening fiscal policy, but that solution won't work for what's caused by supply side problems; it would just result in stagflation.

>I know that you are wedded to the concepts of Modern Monetary Theory and
>think that governments can borrow and spend without consequence.
No you don't know that - you IMAGINE it.

In reality I have NEVER claimed tat governments can borrow and spend without consequences. In fact I've previously said that only a complete idiot would make that claim.
What I've said is the consequences are often not what you think they are, and are always the result of the deficit not the debt.

I'm certainly not wedded to the concept of MMT; it's just that so far it always fits the facts and I've no reason to believe it won't continue to do so. Most of the criticisms of it are based on strawmen. MMT people would agree that "The notion that we could borrow money, spend it willy-nilly and not suffer consequences was always bonkers".

MMT people do tend to be more dovish on inflation than mainstream economists. That's due to the values they hold rather than MMT itself, though it's undoubtedly informed by the fact that inflation has little effect on a generation's standard of living.

Talking about inflation I started wondering just how much it effected me personally, & my kids.

I bought this place 30 years ago. Since then it's "value" has increased by conservatively $1,200,000, & perhaps by 1,5 million. So being conservative it is earning me, or my kids, at least $40,000 a year & perhaps $50,000. Of course the greedy council wants a chunk of this, although they have spent precisely not a cent on our district in that time. The $340 a year rates are now $3700, for which we get 3 hours of library truck 46 times a year.

A mate of mine bought a 1,5 acre block in a near by subdivision 5 years ago for $45,000. All up a house & the land cost him $360,000. He sold it a couple of months back for $840,000.

I would hate to be a kid trying to get into the market today, unless they have inherited from a dad like me or my mate. We need to stop population growth, fulled by migration right now to give our kids a chance.

In this up coming election I will be voting only for candidates or minor parties who are strongly anti immigration. I don't need my place to inflate another half a million.

Good talk- thanks all.

Hi there Hassy,

You aloud to one of the problems in society. We have the state supported, with aged welfare, landed gentry such as yourself sitting on vast estates, whilst the young and refugees can't get a look in. Would it not be better if we moved people like you into bed/sits in Moonie Ponds, and devided your vast estates among the young and displaced. You would have no inflation problem, as there would be no compensation for you, just cold beans and food stamps.

How typically communist Paul.

Wouldn't it be better if those who earned the money to pay for a property were allowed to do what they wanted with it.

Wouldn't it be better if we stopped giving handouts to useless bludgers who aren't prepared to make their country of origin a decent place to live, & those born in a decent country got off their buts, took advantage of a free education system & developed a meaningful life for them selves, rather than bludging on others?

If those like me could split off a few blocks, now we don't have kids horses to graze & train, & sold them for a reasonable price, it would be a much cheaper world.

Wouldn't it be much better if councils & state governments got their grasping fingers out of developers & buyers pockets, so the cost of developing a block of land could come down the $45,000 they add to the costs with fees & charges doing nothing.

Why not wait just a few more years until we have Australians go to other countries by claiming refugee status !
If Labor gets in again it'll be even sooner !

individual,

Hopefully it won't be that bad; but if the next 3 years are to be a to be a poison chalice, who better than Albo to get the blame for it. People might be brought to their senses, kick him out after one term, and never again think of Labor as being fit for office.

.resumption of boat arrivals
.return to illegals having access to our legal system
.massive increases in power prices
.regular power outages when there is no wind or sun, no coal
.bigger subsidies for for unreliable energy shysters
.increased taxes to pay for the welfare promises
.even worse than now educational services
.cuts in defence spending
.kowtowing to Communist China.

And, whatever else they Labor is hiding from us.

ttbn, talk about "crying in your beer", the D and A of the Labor and Liberal parties today is 90% identical. The differences are in emphasis not policy. There's plenty for you to choose from, One Nation, Palmer, the Fascist LDP, take your pick. Bad luck your man Corny Banana took you for ride last time, but that's politics.

I just watched several Labor supporters being interviewed, their mentality was nothing short of scary considering they could vote in a Govt that sends Australia down the tube.
None of actually knew why they vote Labor. Probably aspiring bureaucrats & contenders for the Peter Principal.

Indy, was that on your free government issued tee-vee?

Paul1405,
No, the one You paid for ! ;-)

WeChat posts spread misinformation saying Labor plans ‘to turn children gay’ and ‘destroy Chinese wealth’
http://www.theguardian.com/australia-news/2022/may/11/wechat-posts-warn-labor-plans-to-turn-children-gay-and-destroy-chinese-wealth

"A subterranean campaign on the Chinese-language social media platform WeChat has ramped up in the final weeks of the 2022 federal election campaign, with material being shared in private groups that alleges Labor and the Greens will fund school programs to turn students gay, impose new taxes and destroy Chinese wealth."

Now I don't know about destroying Chinese wealth, but as far as I'm concerned they more-or-less are trying to turn kids gay.

If the article from 'The Australian' shown in the flyer is accurate - ALP Policy Platform has dropped the words 'Mother' 'Breastfeeding' and 'Pregnant mothers' from their Policy Platform - is accurate, which by a quick google search looks to be so.

http://www.google.com/search?client=firefox-b-d&q=ALP+Policy+Platform+has+dropped+the+words+%27Mother%27+%27Breastfeeding%27+and+%27Pregnant+mothers%27+from+their+Policy+Platform

- Then they aren't lying are they?
Pretty sure we've established over the Solomon Islands issue that the West wants to involve themselves in their issues.

Given The Guardian article states "It is impossible to determine their origins and whether they are the work of an individual, a group, a party or a state actor."

It looks to me that they are trying to allege election tampering by a state actor?

Who even cares if they do?
Not me, in fact I think it's totally hypocritical for the West to impose themselves on what China does (especially when the West has a policy of involving itself in there affairs and complaining about their countries mode of politics - Xi Jinping being and then scream bloody murder when the Chinese tries to stand up for what it considers a different set of values.

This article displays their hypocrisy and arrogance.
http://www.abc.net.au/news/2022-05-10/spy-boss-suggests-chinese-officials-leaking-to-australia/101053414

'espionage opportunities' 'abolish term limits' 'authoriatarian states' 'strongman leaders'

[Cont.]
- This is not a policy of mutual respect.
- This is a policy of the West to dictate how China acts
- Yet we complain about how they act?
- And are alleging 'election tampering by state actors, when they stand up for what they believe?

Our democracy is not a democracy anyway, its a weaponized international democracy, that brings all countries down to 2 horse-race, one party for traditional nationalists, and the other a party a collection of combined minorities, designed to overthrow the existing status quo under foreign (UN) dictates that like a chameleon is designed to support the western monetary system, which also uses trade and sanctions as weapons.

This is Labors platform

When the Wokest Hate the Woke..It's Delicious
http://youtu.be/ju_CxFE86uc

I don't support this backwards crap.
Watch to 2:36 and you'll see the 'They' people Labors supports.
Do you support that, or do you supports China's stance which seems to support "Mothers' 'Breastfeeding' 'Pregnant Mothers'

When will you all see that our nations are being deliberately divided for the benefit of NON-AUSTRALIANS, but a global agenda
- That's the bigger picture -

All these foreign policies do is turning our citizens into bloody basket-cases.
Anyone referring to themselves as 'they' is split-personality and belongs in a mental institution.
If forced to Choose between China and this crap, I choose China.
The west is destroying itself, and we're now trying extra hard by making war against Russia and China.
Our economy and our normal kids futures is more important than Ukraine joining NATO, and a bunch of weird people with mental problems

You know what western democracy is?

You know how the US and Russia were once in a cold war.
Democracy is a cold-civil war.

It's a recipe for endless in-fighting, and endless dis-unification amongst ourselves, where outside forces endlessly shift the goal-posts and agendas in their demands of us, in the name of human rights, but its not about human rights, because democracy is just a front company of western monetary policy and global control by bankers and elites.

we're all being played, and as long as the majority are kept in the dark or refuse to see what they don't want to see, then that's the way it will be, by design.

We're all just building our own prison planet.
Where every decision that matters will be decided by foreigners.

And that's why Russia and China, ARE ON THE RIGHT SIDE OF HISTORY.
- Despite their shortcomings.

None of you see what I see.

AC,

Russia is being smashed, and China's economy is in freefall. Tell me again how they are on the right side of history?