The $19,990 special

The amount of ink spilled in the analysis of the 2015 Australian budget would probably fill Sydney Harbour. The number of electrons expended in the same way would probably light up a small town for a week. There is no need to add to the consumption of electrons here. Instead, let’s look at the sales pitch.

To put it into perspective, there is, unfortunately, a little bit of economics that we have to endure. Australia is one of the few countries in the world to maintain a AAA ‘credit rating’. Nominally, that means that the country can borrow money at lesser cost. Australia is one of the few countries in the world that can truthfully claim that the economy has not been in a recession in the last 20+ years. Things are, however, not all rosy in the garden: while it is a positive that we do have a Reserve Bank official cash rate above 0%, it is at the time of writing a hardly stellar 2%. In fact 2% is the lowest it has ever been. The official cash rate is the measure of how much interest the Reserve Bank is prepared to pay lenders should it decide it will hold on to money that banks can’t place elsewhere (at a higher return).

Interest rates, to an extent, also refer to consumer confidence. If consumers are confident that the economy is bubbling along quite nicely, they are more comfortable to borrow to upgrade the house, buy the shiny new car or spend the ‘rainy day money’ on a visit to Disneyland, the new lounge suite or buy the larger TV (because a 55 inch TV would look absolutely fabulous!). In a similar way if business thinks that the consumer is going to ‘walk’ into their business and make a purchase, they will be more inclined to upgrade the computer system, buy the new delivery van, upgrade the shop fittings and so on.

The problem is that once consumers lose confidence, it takes a lot to get the confidence back. At the start of the Global Financial Crisis, the Rudd Government, on the advice of Treasury, distributed billions by way of $900 cheques. The Opposition at the time decried the extravagance claiming that some would spend the money wastefully — and produced examples of people taking the money straight to the local pokie palace or to the local electronics store to purchase the largest TV they could get. Regardless of the morality, those that work in pokie palaces and electronics stores kept their jobs as a result of the expenditure. While Rudd was trying to appeal to his constituency, the $900 cheques did keep the economy ticking along and, with assistance from other programs, did keep Australia from tipping into recession. The pumping of the economy by the Rudd/Gillard Government also retained consumer confidence — people were prepared to go out and spend the windfall. The other parts of the Rudd/Gillard package prolonged the demand through both quick and long term infrastructure improvements to people’s homes (while assisting to reduce energy usage and costs) as well as considerable new infrastructure to schools, health care providers and so on. Human nature being what it is, if people have a reasonable expectation of receiving an income next week, they will not conserve every cent they have this week.

In contrast, prior to the 2014 — it’s going to be tough — budget, Hockey and Cormann were pictured smoking cigars. The reason for the ‘toughness’ that was to be imposed on the community was claimed to be due to the ‘debt and deficit disaster’ inherited by the Abbott Government.

Regardless of the truth of the ‘debt and deficit’ claim, Hockey killed consumer confidence. The marketing of the budget in 2014 resulted in News Corp publishing an article like this, dryly listing the adverse effects of the budget on ‘the average person/family’, such as:
IF YOU NEED TO SEE A DOCTOR WHO BULK-BILLS ... All the rumours were true. From July 1, 2015, you will have to pay a $7 “patient contribution” fee each time you visit your GP.

You’ll also get slapped with that charge when you visit out-of-hospital pathology and imaging services, such as getting an X-Ray or an MRI.

Concession card patients and kids under 16 years will only have to pay the contribution for their first 10 visits a year.

Doctors have discretion to choose who pays the fee, but there is a catch.

If GPs choose not to charge a patient, they won’t receive their $6.20 bulk billing consultation payment from the government.
While Abbott and Hockey were effectively telling us all to swallow our medicine, they were showing a distinct inability to get budget measures through the Senate. The ABC reported in late May 2014 that Hockey was threatening that interest rates, as well as taxes and charges, would increase if the budget measures did not pass the Senate. History will tell us that a lot of the measures that weren’t passed by the Senate were quietly rescinded in the 2015 Budget. We also now know that the official interest rate set by the Reserve Bank fell over the period of the 2014 budget to the lowest level ever — 2% — causing the Chief Executive of CPA Australia, Alex Malley, to comment, as reported in The Saturday Paper:
“A 2 per cent interest rate is another way of saying there’s no pulse in the economy,” says Malley.
So then we come to Budget 2015. If Hockey and Cormann shared some time smoking cigars again, it certainly wasn’t in public view. Hockey returned to his ‘genial Joe’ persona pointing out the benefits to all from the latest budget. Sophie Morris, who wrote The Saturday Paper article linked above, observed:
In an extraordinary about-face, Hockey has gone from being the treasurer who helped destroy consumer and business confidence last year, with a tough budget and talk of “debt and deficit disaster”, to an enthusiastic hawker going all-out to try to rekindle it. He’s throwing himself into the task with all the gusto of a steak knife salesman on daytime television.
In an interview with one of the ‘doyens’ of the Australian media, Laurie Oakes, Hockey was asked what happened to the ‘debt and deficit disaster’ last year since there has been little improvement in the Australian Government’s budget position:
Hockey replied: “Well, we made significant progress last year, Laurie, and that’s underestimated, but we actually have come a long way. Now we are on the next stage of our plan to build growth, and we’re investing.”
You could also question if the change in attitude was somehow influenced by the last 12 months of opinion polls, as evidenced by the commentary that the 2015 budget has ensured the ALP would now win an election by a smaller margin than for most of the past 12 months.

The ‘highlight’ of this year’s budget is the $20,000 immediate write off for asset purchases by small business. The plan apparently is for small business to go out and purchase business related equipment — which in turn means money is pumped into the economy, people in the businesses that supply equipment to small business retain their jobs and go out and spend their income to inject further money in the economy. Of course it is a complete coincidence that the strategy is similar to the Rudd/Gillard strategy to address the GFC, which the LNP so roundly criticised at the time for being economically reckless. There are some differences of course: Rudd/Gillard were responding to a worldwide event; Abbott and Hockey are responding to an event of their own making. Both political parties are of course favouring their preferred demographic.

It appears, however, that the ‘sales job’ to unaligned Senators in 2015 is no better than it was last year. Fairfax Media is reporting:
Almost three weeks into its budget sales job the Abbott government is still struggling to secure Senate support for some of its key proposals, leaving billions of dollars of savings in doubt.

The government's age pension changes, childcare package, cuts to paid parental leave and plan to impose a one-month wait for the dole all still face an uncertain fate in the upper house.

While crossbench negotiations are set to ramp up even further in the coming weeks, it looks increasingly likely the government will be forced to abandon or heavily amend some of its plans. The latest crossbench talks come after the Parliamentary Budget Office warned Senate intransigence could carve a $100 billion black hole in revenue in the next decade.
Abbott, Hockey and others have accused the Rudd/Gillard Government of spending excessively, in turn making the dramatic spending cuts of the last two budgets prudent and necessary. For a number of years, this ‘self-evident’ truth has been accepted at face value by a large proportion of Australian media (and the community). It is clear that the unaligned Senators have thought differently when disallowing a number of the revenue measures proposed by Abbott and Hockey.

It is perhaps ironic that the elected Senators of Australia have demonstrated the sales pitch doesn’t convince them and the ABC’s FactCheck unit determined that Abbott and Hockey are now spending more that Rudd/Gillard did. Hockey’s sales pitch this year is better, but the budget is still about ideology rather than improving the status and wellbeing of our society.

What do you think?
What can we expect from this government except a litany of failure? 2353 points out that in selling their two budgets they have shown that they couldn’t sell a glass of water to a thirsty man. Worse, they demonstrate their hypocrisy with an approach in 2015 that they roundly criticised when in Opposition and is the polar opposite of their own approach in 2014. Can they get any worse? Let us know what you think.

Come back next week when 2353 will consider the politics of the marriage equality issue.


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14/06/20152353 Once again you have written a fine piece, this time exposing the hypocrisy and deviousness of the Abbott government and the nation's Treasurer as they arrogantly segue from the overblown rhetoric of an inherited 'debt and deficit disaster' surrounding the 2014 federal budget, to the simplistic 'all's well again, spend-up big' hype that embellished the 2015 budget. You have demonstrated that the primary purpose of their 2015 budget is political, the economy simply serving as a vehicle designed to improve LNP ratings in the polls and drag the PM's unpopularity from the depths to which it has descended. To some extent it has achieved that purpose. Too bad that the need to foster the economy has had to take a back seat. Any improvement in the economy following the budget is likely to be coincidental. The $20,000 immediate asset write-off for small business is for the same purpose as was the Rudd stimulus package during the GFC, but of course if the LNP uses it, it is OK, even necessary, but if Labor uses a stimulus, it is profligate spending. The sheer hypocrisy and mendaciousness of Abbott, Hockey and Co. is breathtaking, but is becoming so commonplace as to become the norm, and is therefore not attracting the opprobrium among voters that it should. We see cynical, self-interested politics being played out before our eyes, day after day, with scarcely a murmur from the Fourth Estate. It is obviously up to writers like you in the Fifth Estate to show the LNP for what it is - fraudulent, careless, and cynical. Thank you once again for your acerbic yet accurate exposé.

Ken

15/06/20152353 Yes, confidence in economics is almost everything. No economy will operate well without business and consumer confidence. So after four years of telling us about the debt and deficit disaster created by Labor, Abbott and Hockey have finally realised that was having an effect but not the effect they thought - it was destroying confidence. As you rightly point out, it is a difficult thing to rebuild. So much for Liberals being 'better' economic managers when they don't even realise the need to also manage confidence. On another matter, is anyone out there as cynical as I am about the current debate on whether or not we paid people smugglers to turn their boats around. Dutton and Bishop immediately said 'no' when first asked about it. Then Abbott refused to rule it out and now Dutton and Bishop are towing the line that they will not discuss 'operational' matters. Perhaps Abbott's advisors were telling him that the voters were forgetting about the boats because none have arrived in a long time. What better way to get them back in the news and be able to repeat ad nauseum how Abbott 'stopped the boats' than create a news story about them by refusing to deny the payments. Yes, perhaps I am just being cynical but I wouldn't put it past this mob.

Ross

16/06/2015A question that's been bugging me for some time. We are told government borrowing is high, the question is; If the Australian government is the sole issuer of the AUD and can theoretically issue, ie spend, as much as it likes to fund its services then just who does it borrow from and why? Does the government borrow back the same AUD it has created, that doesn't make sense. Does it borrow in other currencies, a very bad idea you would think. Does sloppy Joe nip round to the bank of China and take out a 25 year loan? The term "government borrowing" needs to be defined in more detail because most people can only see borrowing in terms of their own household finances. Wrong though it is I'm sure federal governments would prefer to keep it that way.

As astra

16/06/2015Ken Commenting on The Drum, David Marr left viewers in no doubt that bribes had been paid to people smugglers to take their human cargo back to Indonesia. Every Abbott denial, and the sycophantic echoing of his words by his ministers, reinforce that view, as do the comments coming from high-ranking officials in Indonesia. It happened! You may be right though that Abbott welcomes the publicity, not that he has resorted to illegal bribes, but that he has STOPPED THE BOATS, and will continue to do so, literally 'by hook or by crook' with emphasis on the latter. He has so few feathers in his cap, that he will continue to wave this one ad infinitum. Ross I'm sure 2353 could address your interesting comment better than I.

totaram

16/06/2015Ross: You are correct in that people think of govt. borrowing in terms of their own mortgage or other loan. The reality is rather different. These are treasury bonds that are sold or bought in open market operations and their real purpose is to control the RBA's interest rate. You can read more at the AOFM website. The govt. does not have to issue these bonds in order to spend money into existence, but this is some kind of self-imposed rule. Many other sovereign currency issuers like the UK don't do this any more (if I remember correctly) And you are right. It does not and should not borrow in foreign currency. The treasury bonds are denominated in AUD and therefore there can never be a default on these. All the talk of borrowing and debt is neo-liberal nonsense which suits the coalition mantra about labor being "wasteful" etc. It's also a good excuse for making cuts to the "welfare state safety net". Now that they have doubled the "debt" in less than 2 years, they are changing their tune as 2353 has pointed out.

totaram

16/06/2015I forgot to add, that unfortunately, Labor and the Greens have all bought into this nonsense. That is why Wayne Swan committed the stupid mistake of promising a "surplus" and tried to achieve one by cutting expenditure etc. Stupidity writ large. The neo-cons have been beavering away for most of the last half-century trying to get this narrative established in the average voter's mind, and with the help of "economists" like Milton Friedman they have succeeded.

2353

16/06/2015Hi Ross - thanks for the comment. Government debt is a interesting concept as they are the ones that issue the currency (EU excepted). Way back when, the governments of the day agreed that they would only issue currency to the value of their gold stocks. Around WW2 from memory, the system started to devolve to the current position where governments can (and do) issue currency only backed by the trust of the cummunity that the value of the currency (say $50) will purchase that value of goods and services in the community. A $50 note costs nowhere near $50 to produce - so there is no intrinsic value. The system is known as fiat currency and the US has been printing billions in the last 4 or 5 years to try and shore up its economy. The government debt is effectively currency sold to an third party and then borrowed back by the government, primarily so the currency traders retain faith in the system (they make money out of it). If you go through our archives - you'll find a few pieces by both Ken and I discussing this. If I was at home I could suggest pieces for you to look at - sorry I can't from here. While the mental image will give me a smile all afternoon - unfortunately Joe Hockey doesn't have the 2.30 appointment with the Bank of China on Northbourne Avenue tomorrow! It also seems that Abbott (and a lot of other conservatives) are about to have a new skirmish on another of his favourite subjects - climate change. His spriitual leader (Pope Francis) is about to issue a document calling on humans to reduce their environmental footprint on the planet -> http://www.theguardian.com/world/2015/jun/15/pope-francis-destruction-ecosystem-leaked-encyclical. Apparently the US Republicans aren't happy and undertaking a preemtive strike (as only the ultra-conservatives seem to do) -> http://www.theguardian.com/us-news/2015/jun/13/climate-change-conservatives-catholic-teaching. On top of the 4Corners episode last night (watch it on catch up TV if you can), Abbott will be twisting himself in knots to get out of this one.

Ken

16/06/2015Ross and totaram I will leave it to you to hammer out the economic argument. As I have admitted previously I do have a little trouble getting my head around MMT - although I think I'm slowly getting there. I did mention in a comment a short while back that Hockey had admitted something to the effect that the government needs to "borrow" money (sell bonds) not because they need the money but to maintain the financial system. As I said my piece last week about the tensions between democracy and capitalism, there must be some question as to whether we even need an international financial system, particularly in its current form. I would have thought that the real purpose of an international financial system is to allow people to undertake trade and make payments in different currencies - but then I'm not an economist.

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16/06/20152353 Your comment about the latest encyclical of Pope Francis, and the links to the articles in [i]The Guardian[/i] rightly underscore the political and ideological dilemma Tony Abbott faces on the issue of climate change. We have seen him in evasive, if not denial mode over the payment of bribes to people smugglers; will he use similar tactics to manage the messages in the Pope's encyclical? My guess is 'Yes'. Peta Credlin will be working on a form of words and a set of slogans to counter what the Pope is saying. Abbott's difficulty in making a response will have been compounded by last night's Edition of [i]Four Corners[/i], which predicts the eventual end of coal, perhaps sooner than predicted, especially if divestment of coal mining stocks accelerates, as seems likely, and as key figures such as Ross Garnaut and John Hewson advocate. Abbott's words of advocacy for coal will accompany every media account of this debate, and haunt him as he digs himself deeper and deeper in the anthracitic hole he has inhabited for so long. How will he, a man touted by his family to become either PM or Pope, and a devout Catholic, reconcile his climate denialism and his advocacy of coal, with the Pope's words and admonishments? Here are some predictions: [i]"Look, we are doing everything we can to reduce emissions. Our Direct Action Plan is already a great success. We will easily meet our carbon emission targets. We will have a strong target to present to the UN Climate Change Conference in Paris later this year. We respect the Pope's ecclesiastical authority. We are in harmony with the Pope's ambitions. But we are determined to protect the jobs of coal industry workers. The Australian people expect us to protect one of our most important export industries. It is essential to our economy and we are determined to support it. The Greens and their allies, the Labor Party, are determined to smash the coal industry and throw out of work all who are are engaged in it. The Coalition will never do that! We got rid of Labor's toxic carbon tax that was driving up electricity prices and the cost of everything. We will never go back on that. But we WILL do whatever we reasonably can to reduce pollution and give Australians cleaner but affordable energy."[/i] And sotto voce: [i]'trust us'[/i]

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16/06/2015Totaram Thank you for your comment. You say: '[i]The neo-cons have been beavering away for most of the last half-century trying to get this narrative [the evils of debt and deficit] established in the average voter's mind, and with the help of "economists" like Milton Friedman they have succeeded.[/i]' How right you are. Joseph Stiglitz points out that right wing think tanks have been active for years developing narratives that support their neo-conservative ideologies. It is a process akin to brain-washing. It works. These think tanks are well funded by wealthy firms and organisations: the Koch brothers and the Tea Party are examples. They are streets ahead of left wing think tanks, who are not well funded and are relatively ineffective. Big business has a stake in fostering neo-conservative thinking as it is consistent with increasing profits and influence. If progressives are to have an effective counter to this neo-con influence, they will need to be much more active and better funded. Get-Up is an recent example. The Fifth Estate too has a contribution to make, as your comments today exemplify.

totaram

16/06/2015Anyone wishing more info on Fiat Money can watch this excellent video: https://www.youtube.com/embed/qBpm5sVmGYc

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16/06/2015Folks Q&A has become a fine forum for discussion of affairs of national importance. Last night's episode on the Magna Carta was excellent, one of the best. The panelists did us proud. Bret Walker, first independent National Security Legislation Monitor, was very well-informed, erudite and articulate. Luca Belgiorno-Nettis, founder of The New Democracy Foundation was too. Noel Pearson was exceptional in articulating his understanding of indigenous rights and where they were lacking. He emulated his performance at Gough Whitlam's State Funeral. Gillian Triggs, president of the Australian Rights Commission, showed how knowledgable she is about the law governing human rights, how articulate she is in expressing its complexities, and how strong and resolute she is in carrying out her statutory duties in the face of a hostile government. Her performance last night was exemplary. Bronwyn Bishop was well informed; she had done her homework thoroughly. She spoke well. She had an answer for every question. What was disappointing was her non-verbal behaviour. Her eye-rolling portrayed her disdain for Professor Triggs, whom she accused of politicising her role. Ironically, it was Bronwyn Bishop who politicised last night's Q&A with her criticism of Professor Triggs. The audience saw this clearly. The enthusiastic applause for her told the story. Abbott, Brandis, the Bishops, Dutton, Morrison, and Uncle Tom Cobley and All can criticise all they wish, can push for her resignation as much as they want, but they will not move her, and they will get no public support as they try.

Bacchus

16/06/2015Excellent video totaram - well worth the hour it takes to watch. Steven Hail is obviously a very good lecturer, able to convey complex ideas in an easily understood manner.

Ross

16/06/2015Thank you all for replying to my somewhat tongue in cheek comment. Its very hard to pass up a chance to slag off our esteemed and economically illiterate treasurer. Every time Joe gets his melon on the TV all I see is Sydney Greenstreet in a scene from the Maltese Falcon. Peter Lorre's Gollum like eyes staring up at Joe, sorry Sydney. ........... Anyway back to the matter at hand.......... I am aware of what the so called government debt is and what government bonds are actually for. There is a Reserve Bank paper floating around that states in black and white Treasury Bonds are not used for federal government budget purposes. End of story. Unfortunately the average person in the street thinks federal government finances are similar to their own household finances and no politician or any of the main stream media is going to point out the error in this thinking. This is the real problem. It's left to blogs and social media to prick your interest enough to start Googling some real answers. Ross

Ken

16/06/2015Ross Without pretending to fully understand it, the Budget Papers do include full lists of payments due on bonds and when they are due. If you can explain what that is about it would be appreciated. That is one of the problems in Greece. Some time in the coming months it has payments due to bond holders that actually exceed the amounts it 'owes' to the IMF.

totaram

17/06/2015Ken: watch the video. All your questions will be answered.

Ken

17/06/2015thanks totaram. Sorry that I haven't gotten to that as yet. I'm trying to find a free hour.

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17/06/2015Folks Last night's episode of [i]The Killing Season[/i] exposed more of the back room machinations that brought about Kevin Rudd's removal. Looking for media commentary, I found Lenore Taylor's account little more than descriptive, but Michelle Grattan did not hold back on opinion: '[i]It’s ugly. They indict themselves in their indictments of each other. Gillard argues Rudd was dysfunctional. Rudd accuses her of duplicity and – despite having himself deposed Kim Beazley – complains of “betrayal by people who you thought you could trust”. 'Gillard says of Rudd in early 2010: “My sense of him at that point was that he was spent in a physical and psychological sense”. Rudd replies: “If that was a serious view on Julia’s part at the time, then she would’ve had an obligation to go to the national security committee of the cabinet and put it forward”. And on it goes. 'Those remembering this pair in their halcyon days are now seeing, under the harsh spotlight of skilled television interviewing, their characters stripped bare, their flaws raw and exposed. There is no winner.'[/i] How should we view the revelations of this series? Labor supporters will be disappointed to have confirmed much of what they suspected was going on behind the scenes. But is it possible to analyse such a complex set of circumstances and events, with so many players, in a way that allows apportionment of blame and divides players into 'honest' and 'dishonest'? As police investigators and lawyers know well that 'truth' is difficult to determine, and that perceptions govern what individuals regard as 'true', a more charitable approach to this series might be to accept that each player genuinely believed the veracity of his/her impressions and statements - that the way they reported events was how they actually perceived them. Applying this principle to the dialogue between Kevin Rudd and Julia Gillard, reported upon separately by them, may simply reflect different perceptions of the same event, and that both are being 'honest' to their perceptions. Of course such an approach cannot deny the nastiness of what went on at many levels, the deviousness and ruthlessness of some of the players that contaminated the worthy concern that others had for the wellbeing of the Party and some the key players. It is distressing for Labor supporters to view, but it does deepen insight into the darkness that permeates politics and that reduces politicians to the ugly state they are in, reflected in the latest Essential Poll, where they sit at the bottom of the pile with only 11% having some or a lot of trust in them and 49% no trust, a position they have occupied for as long as I can remember. How sad! Yet these despised people are the very ones who make the laws that govern our society!

2353

17/06/2015Ad, The only positive I can see from the exposure of the Rudd/Gillard thing is that the LNP is probably doing the same thing. Don't forget that Cabinet is leaking like a sieve at the moment. The downside is that the LNP rarely air their dirty laundry in public (and especially not on nationwide TV!)

Ken

17/06/2015Ad, 2353 I find the most interesting part of 'The Killing Season', the comments made by the 'bit' players. One by one of Julia's advisers that even up to the time she was going into the meeting with Rudd she still wasn't thinking in terms of a challenge. But she makes clear, herself, that as a good politician she kept her options open and didn't rule in or out some of the questions put to her. I liked Burke's frank admission that he had raised and not raised the leadership by referring to a question they hadn't addressed in their meeting and suggesting that if the question came up Julia could come to see him. As he said he was creating deniability, that he had never raised the question of leadership - it was there but not referred to by name. As to the main meeting between Rudd and Gillard it would seem that only Faulkner can shed light with a more neutral interpretation but obviously he chose not to be interviewed for the program. It was odd, however, that both Rudd and Gillard claimed to be the one to invite Faulkner to the meeting. I think it shows classic examples of political- and diplomatic-speak where matters are left unsaid on the basis that both sides really know what is being said (and not said) but, sadly, more often they have a different understanding. In diplomacy in the past, that has led to war. You would think that we would have learned by now.

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18/06/2015Ken It's curious that although politicians lie seemingly with impunity, they carefully avoid being openly exposed as lying, and as opportunistic liars. Lying to the parliament is a particularly serious offence. So they have developed the skill of making public, and even private statements that are 'plausibly deniable'. They need to be able to say 'I never said that' or 'I never did that', and no one can prove to the contrary. Tony Burke gave us a cogent example of how plausible deniability works. I suspect that plausible deniability is the process Abbott and Co. are using in the 'bribes to people smugglers' saga. While such a process may give some measure of legal protection, I suspect it scarcely ever passes the 'pub test'; people see through the deception. On another subject, I was impressed with the episode of Julia Zemiro's Home Delivery last night on the ABC in which Leigh Sales featured. Leigh is a sharply intelligent, competitive, competent journalist, who surprised me last night with her vivacity and talent. She is a wedding singer and pianist to boot. My opinion of her has gone up several notches.

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18/06/20152353 The LNP will eventually become unstuck. The way Abbott continues to treat his ministers with disdain over important matters such as the mechanisms for depriving people of citizenship will bring him undone. Even [i]The Australian[/i] has an article this morning describing the tension that exists between the cowboys lead by Abbott who are happy to ride roughshod over the legal niceties of depriving a person of citizenship, and the sensible ones like Turnbull who know that carelessness with this process is dangerous and threatening to the liberty of us all. Abbott wants to shove his proposed legislation through his Party ranks with slipshod process, and some are objecting strongly. He will do this once too often and end up being reprimanded and even challenged again. The 'whirling dervisher' knows no other way!

Ken

18/06/2015Ad A classic example of how politicians (or more correctly their offices) work was with John Howard during the 'children overboard' affair. It became clear very quickly that the military personnel on-site had quickly advised that the children had not been thrown overboard by their parents. Howard was, however, able to continue to say that we should not allow those type of people into Australia because he had not seen the correction. Evidence later emerged that it was the advisors in his office who made sure he did not actually see that advice so that he could truthfully claim that he was not aware of the 'correction'. That is another danger of ministers' offices now being dominated by 'political advisers' rather than public servants.

DoodlePoodle

18/06/2015Finally getting in to have a good read in TPS. We have been without both our home fixed line and internet for the past 3 weeks and we have been told that it won't be restored until late July. Anyone would think we lived in the "back woods" but no we live in a Capital City. What a pity that we don't have NBN. Tonight I am using WIFI at a club. Just wondering what people's thoughts are on the pension legislation that the Green's have enabled the LNP to get through. Double standards when the LNP say they will not be taking any action on the generous concessions to Super.

Ken

18/06/2015DoodlePoodle Sorry to hear about your conection problems. Seems unbelievable in this day and age that you can be left for almost two months without the internet. To access many government services you now need the 'net - they don't like it if you actually walk into an office and some, like the ATO, won't give you a phone number or only a single phone number that it takes 'three days' to reach the top of the queue. On your question about the pension, my initial reaction was to support it. I must admit that I was surprised when I first found out that the limit for additional assets beyond the family home was over a million dollars and thought the new limit of somewhere around $850,000 (for couples) seemed reasonable. But I have also seen some of Labor's figures on the impact on single pensioners and their suggestion that it could capture half of all retirees in the next decade - but surely you overcome that by indexing the limit. So I am no longer quite so sure but I see that ACOSS is still supporting. I think I still lean to being in favour of it as long as they're prepared to lift the limit in coming years and not lock it at the same level for many years just to keep reducing the number of people eligible for a part-pension.

Ken

18/06/2015DoodlePoodle Sorry forgot to keep going with my reply. It certainly is a double standard. As I was saying, I think the change to the pension is probably reasonable and relatively fair. But as you suggest it is definitely not fair to then leave the superannuation concessions unchanged. As many have said previously, the 'fairness' imposed on the pension impacts middle income earners while the absence of changes to the superannuation concessions benefits the higher earners. That is definitely not fair and why the Greens agreed without a more rigid agreement to change, rather than just including it in a review, I don't know.

TalkTurkey

18/06/2015This isn't at all politics but I think it's fun and funny. For a change. I copied and pasted it the whole collection starting here: Who said Aussie Rules footballers aren't smart? 'I owe a lot to my parents, especially my mother and father.' (Shane Wakelin). ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 'Nobody in football should be called a genius. A genius is a guy like Norman Einstein.' (Mick Malthouse - Collingwood). ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 'I'm going to graduate on time, no matter how long it takes.' (Peter Bell - Fremantle - on his University Law studies). ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 'You guys line up alphabetically by height.' and 'You guys pair up in Groups of three, then line up in a circle.' (Barry Hall Sydney Captain at training).. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Brock Maclean ( Melbourne ) on whether he had visited the Pyramids During his visit to Egypt : 'I can't really remember the names of the clubs that we went to.' ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ (THIS IS PRICELESS!!!!) 'He's a guy who gets up at six o'clock in the morning regardless of What time it is.' (Kevin Sheedy on James Hird). ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Jonathan Brown, on Night Grand Finals vs Day Games 'It's basically the same, just darker.' ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Ron Barassi talking about Gary Cowton 'I told him, 'Son, what is it With you. Is it ignorance or apathy?' He said, 'Barass, I don't know and I don't care.' (HYSTERICAL) ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Barry Hall ( Sydney ) when asked about the upcoming season: 'I want to kick 70 or 80 goals this season, whichever comes first.' ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 'Luke Hodge - the 21 year old, who turned 22 a few weeks ago' (Dermott Brereton). ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 'Chad had done a bit of mental arithmetic with a calculator.' (Mark Williams). ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ At least this one could have been ironic? 'We actually got the winning goal three minutes from the end but then They scored.' (Ben Cousins, West Coast Eagles). ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 'I've never had major knee surgery on any other part of my body.' (Luke Darcy). ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 'That kick was absolutely unique, except for the one before it which Was identical.' (Dermott Brereton). ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 'Sure there have been injuries and deaths in football - but none of Them serious.' (Adrian Anderson). ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 'If history repeats itself, I should think we can expect the same Thing again. (Andrew Demetriou). ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 'I would not say he (Chris Judd) is the best centreman in the AFL but There are none better.' (Dermott Brereton). ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 'I never comment on umpires and I'm not going to break the habit of a Lifetime for that prat.' (Terry Wallace). ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Garry Lyon : 'Have you ever thought of writing your autobiography?' David Swartz: 'On what?' ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 'Well, either side could win it, or it could be a draw.' (Dermott Brereton). And they also get paid......................a bit of a worry!?!

TalkTurkey

19/06/2015Now for my weighty pronouncement on your article 2353! I can't add much but of course I agree. The problem facing the Rudd Government with Australia's economy in 2008 was akin to having to push a car a hundred yards to a downhill grade where it would roll of its own gravity. It was still rolling as the GFC started, and the Labor Government acted swiftly to keep it rolling, knowing that the alternative, to let it slow down, would inevitably require far more effort to get it going again. So they stimulated the economy and it all worked. And for the next five years Australia had the best-run economy in the world. But Abborrrtt, damn his eyes, and global criminal Murdoch, and the filthy rich miners, were able to convince our ignorant masses that ... well you know ... so I won't elaborate. But since then the new Government has not merely failed to keep the momentum going, they have deliberately slowed it down, with austerity measures, with killing renewables, ruining the NBN plans, effectively closing down Australia's motor car industry and threatening our ship-building industry too, bringing us all down with their stupid 2014 budget. And always blaming Labor. And now they want to speed the economy up again. Well that's not in their power. They've stuffed it. Well we just must win the next election. Don't give up. But O I wish Australians were not so gullible, and not so mendacious. We are sitting ducks for the Right.

2353

19/06/2015And now for something competely different . . . “This is his signature teaching,” said Austen Ivereigh, who has written a biography of the pope. “Francis has made it not just safe to be Catholic and green; he’s made it obligatory.” Ivereign added: “It captures his deep disquiet about the direction of the modern world, the way technology and the myth of progress are leading us to commodify human beings and exploit nature. This comes right out of his soul.” The encyclical, which can now be considered the church’s official position on the environment, includes practical guidance. Pope Francis rejects “simple solutions” to climate change such as cap and trade systems, which he says give rise to harmful speculation. He also dismisses any suggestion that population increases harm to the environment and should therefore be controlled, and resists making any judgment on genetically modified foods." http://www.theguardian.com/world/2015/jun/18/popes-climate-change-encyclical-calls-on-rich-nations-to-pay-social-debt Maybe Shorten should be asking questions about this - rather than trying to hide from comments about some Commission of Enquiry where even big business that was part of the deal can't see the problem. I'm sure the Greens could have a field day - hopefully they do.

Ad astra

19/06/2015TT What a hilarious collection. I like your analysis of the Rudd reaction to the GFC. 2353 Your piece has attracted a lot of attention. The impact of the Pope's encyclical will be felt world wide, except perhaps in the thinking of our tone-deaf PM.

Ad astra

19/06/2015Folks Explain this to me. Consider these facts extracted from an article about the Pope's encyclical in [i]The Guardian[/i]: http://www.theguardian.com/world/2015/jun/18/popes-climate-change-encyclical-calls-on-rich-nations-to-pay-social-debt? '[i]...a recent survey of Catholics in the US shows the pope faces a tough task. According to Pew Research, while eight in 10 Catholic Democrats say that there is solid evidence that global warming is real, only about half of Catholic Republicans agree. Far fewer – just one quarter of Catholic Republicans – believe that global warming is caused by humans... 'Even among Catholics in the US, views on global warming are sharply divided along political lines. A recent survey by Pew Research showed that Catholic Republicans view the nearly universally accepted scientific facts with deep scepticism. 'Overall, the survey found that 71% of US Catholics believe the earth is warming, and about half (47%) believe humans are the cause and that it is a serious problem. 'But while eight in 10 Catholic Democrats say that there is solid evidence that global warming is real, only about half of Catholic Republicans agree. Far fewer – just one quarter of Catholic Republicans – believe that global warming is caused by humans.'[/i] The only politicians in the U.S. who have been quick to knock the Pope's views are Republicans. Explain to me why views on global warming are divided so sharply between Republicans and Democrats, between conservatives and progressives. Why is climate change and political orientation so closely correlated? The only cogent explanation I can muster is that conservatives generally have great faith in free markets, believing that the markets can manage economies better than can governments. Does that faith extend to the belief that if the markets embrace fossil fuels, their judgement about the suitability and safety of such fuels must be right, and therefore must override scientific evidence and opinion to the contrary? Even as I type this, it sounds a ridiculous proposition. The only other explanation of the embrace of fossil fuels by conservatives I can advance is naked self interest. Are so many conservatives reliant on investment in fossil fuels that any threat to the fossil fuel industry is countered with denial of the adverse effects of burning such fuels? Put another way, is this yet another example of self interest trumping the common good? I suspect the Pope fears that self interest will continue to prevail until our planet is destroyed. [b]What do you think? Do any of you out there have a more plausible explanation of the conservative/progressive divide on global warming?[/b] There is another good article on the encyclical in [i]Business Spectator[/i]: http://www.businessspectator.com.au/news/2015/6/18/climate/pope-delivers-strong-message-climate-change?

Ken

19/06/2015totaram Just to say that I finally found time to watch the link you provided. As Bacchus said earlier it was very informative and easy to understand. I would like to follow up a bit more on how it works in practice for government policy and tying together the various parts of the economy. Will have to go back to trying to follow Bill Mitchell's blog.

Casblanca

20/06/20151. LAUDATO SI’ Pope Francis. June 2015 On care for our common home 10. I do not want to write this Encyclical without turning to that attractive and compelling figure, whose name I took as my guide and inspiration when I was elected Bishop of Rome. I believe that Saint Francis is the example par excellence of care for the vulnerable and of an integral ecology lived out joyfully and authentically. He is the patron saint of all who study and work in the area of ecology, and he is also much loved by non-Christians. He was particularly concerned for God’s creation and for the poor and outcast. He loved, and was deeply loved for his joy, his generous self-giving, his openheartedness. He was a mystic and a pilgrim who lived in simplicity and in wonderful harmony with God, with others, with nature and with himself. He shows us just how inseparable the bond is between concern for nature, justice for the poor, commitment to society, and interior peace. http://w2.vatican.va/content/francesco/en/encyclicals/documents/papa-francesco_20150524_enciclica-laudato-si.html 2. Abbott has papal disconnect on fossil fuels, renewables Michelle Grattan. June 19, 2015 6.53pm AEST Tony Abbott gets some lucky breaks. Imagine if Pope Francis had issued this week’s encyclical – with its clarion call for the world to address climate change – last year in the run up to the G20 hosted by Australia. http://theconversation.com/abbott-has-papal-disconnect-on-fossil-fuels-renewables-43555 3. Pope Francis throws down the gauntlet for Paris climate summit Peter Burdon. June 19, 2015 The immediate importance of the Pope Francis' encyclical comes from its potential to influence world leaders and galvanise the developing world ahead of the Paris Climate Conference this year. http://theconversation.com/pope-francis-throws-down-the-gauntlet-for-paris-climate-summit-43525 4. The moral – and political – force of Pope Francis on climate Jo-Renee Formicola, June 18, 2015 By equating human rights to the protection of nature, the pope's encyclical opens up an international debate with broad political implications http://theconversation.com/the-moral-and-political-force-of-pope-francis-on-climate-42874 5. When free-riding proves expensive Michael Gill. 17 June 2015 Economist William Nordhaus has come up with a new approach to reducing carbon emissions....And Australia could benefit more than we expect http://insidestory.org.au/when-free-riding-proves-expensive 6. Personality as destiny Jane Goodall. 18 June 2015 The Killing Season highlights the impact of politics on real people....But that has its costs for at least one of the participants... Ferguson is fast gaining a reputation as Australia’s most effective political interviewer, and one of her tactics is to force every issue into the realms of the explicit. As drama, its effectiveness is unquestionable: the result is utterly compelling. http://insidestory.org.au/personality-as-destiny 7. Inequality and Australia’s Welfare System Andrew Podger and Peter Whiteford. 18 June, 2015 Inequality is a complex issue. It is affected by many factors, so that it can increase as a result of beneficial changes as well as socially undesirable ones, and can decrease because of changes that reduce overall social wellbeing as well as a result of socially desirable changes. A particular level of inequality may not therefore be suitable as a policy target per se as distinct from such specific objectives as alleviating poverty, increasing employment, achieving a fair taxation system or improving levels of participation and engagement in society. http://johnmenadue.com/blog/?p=4100 8. The Reverse March of Labour – An Interview with Bryan Gould Bryan Gould, Carl Rowlands. 19 June, 2015 I think Labour lost (setting aside technical issues like the restriction of the franchise) because they failed to offer an alternative view of how the economy should be run and in whose interests – which is the central question in current democratic politics. They had no chance of convincing people that they could produce different and better outcomes, if they failed to signal a departure from Tory priorities – as in the case of committing to eliminate the deficit, as though it makes sense to isolate this relatively minor aspect of the UK’s economic problems and treat it as the top priority. 9. Tony Abbott baits hooks and pays crooks Paul Bongiorno. 20 June, 2015 No one could put it better as a description of the Abbott government’s way of doing business. “By hook or by crook” was the phrase the prime minister came back to three times in a radio interview. He was referring to “stopping the boats” but you don’t have to be Sherlock Holmes to pick the MO of this perpetrator at other crime scenes. https://www.thesaturdaypaper.com.au/opinion/topic/2015/06/20/tony-abbott-baits-hooks-and-pays-crooks/14347224002023#.VYSV3WqS97Q.twitter … 10. Abbott government weakens FOI and public service disclosure Sophie Morris 20 June, 2015 Shutting down the office of the information commissioner is the latest gambit in the Abbott government’s quest to avoid scrutiny. http://www.thesaturdaypaper.com.au/news/politics/2015/06/20/abbott-government-weakens-foi-and-public-service-disclosure/14347224002030#.VYUBmEb4hM4 11. Murky waters are engulfing our political class Peter van Onselen. June 20, 2015 12:00AM It is hard to be anything other than depressed by the state of modern politics in this country. A government that has lost its reforming nerve now appears willing to flout basic democratic principles of ¬accountability when it comes to how it has enacted one of its core election promises, stopping the boats. The higher master of the ¬Coalition federally is electoral victory. Nothing else matters, other than how it assists with this goal. 12. Tony Abbott's rhetoric is causing unease among voters who want stability Laura Tingle. Jun 5 2015 Tony Abbott is just halfway through his first term as prime minister. This week, exposed as running not just a deeply divided government but one throwing up ill-thought through proposals on national security of dubious constitutionality, the Prime Minister hit the Fraser memorial panic button. He told voters a Labor government posed a threat to their house prices and their superannuation. http://www.afr.com/news/policy/tony-abbotts-rhetoric-is-causing-unease-among-voters-who-want-stability-20150605-ghgqpi 13. Tony Abbott will keep you safe, unless you're a woman… Jennifer Wilson. 17 June, 2015 The release of the Lowy Institute’s latest poll on the rising fears of Australians and our insecurities regarding the potential effects on us of terrorism, gave Prime Minister Tony Abbott what he likely considers a God-sent opportunity to reassure citizens that his government will do anything to “take care of our people and keep you safe.” http://theaimn.com/tony-abbott-will-keep-you-safe-unless-youre-a-woman-and-as-long-as-you-vote-for-him/ 14. In government, nothing is an accident Michael Taylor. 19 June, 2015 I worked in government long enough to know how they operate. Nothing is an accident. Everything is planned or stage-managed. It is especially so before a new, and particularly controversial initiative is to be announced. It’s always good for the government to get a ‘feel’ of how the announcement will be received. Conversely, if there are indications that the announcement would be in the face of public disapproval then it’s just as good for the government to say and do nothing. “It was just all speculation”. “It will blow over and soon be forgotten”. http://theaimn.com/in-government-nothing-is-an-accident/ 15. Pope slams nations which 'close the door' to migrants Agence France-Presse, Vatican City. June 17 2015, 6:28 PM A day after European interior ministers failed to agree on how to stem the flow of boat migrants across the Mediterranean or house the thousands of new arrivals, Francis demanded greater respect for "our brothers and sisters who seek refuge far from their own lands". "I encourage those who bring them aid and hope that the international community will act in a united and efficient fashion to prevent the causes of forced migration," he said. http://www.thejakartapost.com/news/2015/06/17/pope-slams-nations-which-close-door-migrants.html 16. Chiefs of staff: leading humbly from the back room Paddy Gourley. June 1, 2015 Allan Behm's No, Minister is an excellent contribution to the cause of better government. http://www.canberratimes.com.au/national/public-service/chiefs-of-staff-leading-humbly-from-the-back-room-20150601-ghbqod

totaram

20/06/2015Ken: glad you got to see the video. Billyblog is an ocean. Run silent, run deep, but keep running. Much of it is simple in logical terms. But, as the cognitive scientists will tell you (George Lakoff etc.) people don't really think logically. You need to learn how to "frame" these facts in the right way. Bill Mitchell is aware of this and has a blog on that as well. We can all contribute. Stop using the neo-con phrases like "tax-payer funded" (it's govt funded for god's sake. Taxes don't actually fund anything, and many sensible governments own fund-generating assets - which is why the neo-cons want govts to sell them all off!). And then there's all this "debt and deficit" hysteria, which we need to resist at every turn. For example, "maxing out the credit card": Who has issued the credit card? Visa? This is just nonsense. These are just phrases designed to lock the listener into the "frame" of " govt =household ". I admit, it takes many hours of reading and thinking to clear your brain of the "fog" and many more hours to train yourself to spot the "false" frames every time they are used. Once you have done that, it becomes hard to watch any TV news without yelling at the screen, but hey, that is the price of enlightenment, rejoice!

Casablanca

21/06/2015Just noticed that I omitted the link to van Oselen's article in the above list: 11. Murky waters are engulfing our political class Peter van Onselen. June 20, 2015 12:00AM It is hard to be anything other than depressed by the state of modern politics in this country. A government that has lost its reforming nerve now appears willing to flout basic democratic principles of ¬accountability when it comes to how it has enacted one of its core election promises, stopping the boats. The higher master of the ¬Coalition federally is electoral victory. Nothing else matters, other than how it assists with this goal. http://www.theaustralian.com.au/opinion/columnists/murky-waters-are-engulfing-our-political-class/story-fn53lw5p-1227406505294

Ad astra

21/06/2015Casablanca Thank you for your collection of links, which I shall enjoy this morning here in Seventeen Seventy.

Ken

21/06/2015totaram I've now also read Mosler's 'Seven deadly innocent frauds of economic policy'. That was short enough with which to start my reading (and is a free download). I think I now understand the basic concepts of MMT and I can see the logic of it. Agree, that it does require a big change in mind-set but I found Mosler's anecdotes of his meetings with high level economic advisers interesting in that regard: the way he was able to show them the error of their ways with simple questions like would a pensioner's 'cheque' actually bounce if the government was 'broke'. Unfortunately, none of this applies to Greece because it no longer has its own currency. It would take the European Central Bank (and the major policy drivers like Germany) to adopt the approach across Europe as a whole.

Casablanca

21/06/2015Interesting that The Jakarta Post reported the Pope's exhortation on asylum seakers. If the Australian papers reported the story it was well hidden.

Ad astra

21/06/2015Casablanca Thank you for a great set of links, which made absorbing reading.
I have two politicians and add 2 more; how many are there?