The curious case of the man who forgot the GFC

He’s a Rhodes Scholar with a monumental brain.  Yet when Malcolm Turnbull rose to speak at the National Press Club this week he seemed to have a memory lapse – he forgot the GFC.  Read what he said and see if you can spot where he acknowledged it and the massive loss of revenue resulting from the downturn, a loss whoever was in Government would have suffered.

He mentioned ‘global recession’ only once, in the sentence referring to Kevin Rudd: ”They’ve cut him a lot of slack because of the global recession.”    He didn’t use the word ‘crisis’ at all.  So that made it easy for him to lambaste everything, I do mean everything the Government has done to ameliorate the effect of the GFC on this nation.  Every action was portrayed as simply debt accumulation, deficit building and fiscal disaster for decades to come.  There was no acknowledgement of the need to borrow money to cover the shortfall in revenue resulting from the GFC which is well past $100 billion, without which regular Government services could not be sustained.  It was as if the revenue loss did not exist. [more]

Amid a tedious recital of the Rudd Government shortcomings: ineptitude, lack of foresight, lack of planning, flawed schemes, and sheer incompetence and economic recklessness and inconsistency in running up a $300 billion debt (how he gets this figure he doesn’t explain), one would have hoped for the unveiling of a comprehensive Turnbull plan, one that he describes as “...a plan for recovery that is focused on jobs and is focused on delivering Australians the capacity to spring out of this downturn stronger than ever before.”

So here it is: “Now what are the building blocks of a strategy that is going to deliver that platform for growth that is focused on jobs, jobs, jobs? Well the first thing, the fundamental thing, is that there must be not a penny more of debt than is absolutely necessary – not one penny more.”  Strong words, but there’s more: “Now it follows, therefore, that when governments spend borrowed money they have to make sure they maximise the return for the taxpayer.”  Who would have thought that?  Then in case the audience hadn’t got it: “We need to know that we have a Government that will incur no more debt than is absolutely necessary and will keep the deficits as low as possible and will have a plan to restore us to surplus. That is the challenge.”

Still waiting for the Turnbull solution – please be patient: “Now one of the key elements in this strategy has to be – the strategy the Government should undertake – is building confidence. Confidence is absolutely vital...Now by contrast we in the Coalition have set forward a positive agenda we have developed, following our work with the community through our Jobs for Australia program of forums...”

Here are some edited excerpts from the Coalition plan: “Let me run through some of the proposals we’ve made... We propose that instead of the April cash splash we bring forward, for less than half the cost, the July 2009 and July 2010 income tax cuts. ...In another proposal which has a very modest cost, arguably over time no cost to the budget at all, we propose that businesses be able to carry back losses. So if businesses make an operating loss this year or next, they should be permitted to ‘carryback’ up to $100,000 against taxes paid in the past three years...We propose that the employment costs for small business be reduced as an alternative to some of the measures in the $42 billion fiscal stimulus... We propose that the increased funding for high quality public infrastructure – at least 50 per cent of all stimulus outlays should be directed to that end and that is areas such as road, rail, ports and other economically productive assets...We propose – again a practical measure with a modest budgetary cost – green depreciation for buildings, doubling the depreciation that building owners can take advantage of for investments in green refits, increasing the water or energy efficiency of buildings...We propose an approach using the internet to dramatically streamline red tape...I’ve previously proposed that we should reform our business bankruptcy laws.

Now they aren’t our whole plan of course – we’ll continue to develop that as we go forward towards the next election – but we have to remember that as a matter of our track record we have delivered solid, sound, responsible economic management.”

You judge their value; you judge whether the Turnbull plan is superior to the Rudd Government actions.  You decide if the effects of the GFC would be less under the Turnbull plan.  You work out whether Turnbull would have to borrow money, and how much.  You decide whom you would prefer to be running the economy in the presence of the GFC and the revenue shortfall.

Turnbull finished with rousing words: “But I say this to you my friends, that when the time comes we in the Coalition, all of my colleagues here today and assembled together in Parliament, we will return to government with your support and we will put Australia’s finances back to right. We will return the budget to surplus. It won’t be easy and it won’t be quick. I fear we are going to be left an almost inconceivable level of debt by Labor but you know we have done it before and we will do it again because we will stand up for Australia. We will make the tough decisions, the strong decisions. We will lead where others have not and Australians know they can count on us to get it right, to get our finances right, to ensure that Australia rebounds from this downturn and realises its potential, its enterprise and its energy and the prosperity that that will deliver.”

He doesn’t say how he would return the budget to surplus, or how long it might take, but it must be a lot easier for someone who has forgotten the GFC, and the loss of revenue that accompanied it.

Kerry O’Brien, who attended the Press Club address, clearly infuriated at Turnbull’s lack of acknowledgement of the GFC-induced revenue loss, hammered him with several questions about this on the Wednesday edition of The 7.30 Report,  all of which Turnbull deflected, leading to an exasperated: But you didn't once acknowledge in your speech, as I read it, that the bulk of the deficit the Government faces in this Budget, the bulk of the debt will come from a massive drop in tax revenue due directly to the impact of the global crisis, while at the same time you put heavy emphasis on Mr Rudd running up massive debt. Now was that fair, was that really a balanced picture?  If you want to read Turnbull’s contorted response, click here.

So Turnbull talks as if the GFC is a vague entity somewhere out there, with inconsequential revenue-loss implications.  Every aspect of the budget, either revealed or rumoured, is viewed through the imaginary prism of a non-existent GFC and trivial loss of revenue from it.  It’s bizarre, an almost unbelievable fantasy from a man of intelligence.

And the amnesia seems to be contagious.  Joe Hockey, interviewed on Wednesday on ABC radio's The World Today began “Why is it that every time the Labor Party gets elected into government, people lose their jobs, we end up with deficit and debt? Why is it? It's because they don't know how to handle money.”  No Joe, it’s because there’s a GFC.  Note again, there’s no mention from Joe of a global financial crisis and consequent loss of revenue.

Today, on a budget rumour that it may impose a means test on the private health insurance rebate, Peter Dutton berated the Government for ‘breaking its promise’.  Turnbull loudly echoed the criticism.  After all, why should a shortfall of over $100 billion in revenue cause a Government to review its expenditure?  Why should that small sum prevent it from keeping all its promises?  Of course if you can’t see the GFC and won’t acknowledge the revenue shortfall, you can demand the Government keeps all its promises.

Turnbull, Hockey and indeed the whole Coalition seem to living in a parallel universe, or at least believe many Australians do.  They are hoping they will swallow this disingenuous gibberish.

Most Australians have more common sense.  What do you think?

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Bushfire Bill

8/05/2009In my observation some people are starting to believe the Turnbull Line. A lot of this has to do with the fact that the StimPac and various other measures have worked so well that many out here are starting to think it was all a bit of a fizzer, and that we needn't have borrowed any money at all to cushion the Budget shortfall. We could have just "pulled in our belts" or "sharpened our pencils" or some other cliche-ridden money-saving action and ridden it out through a few months of rocky economic times. It's a very similar attitude to those who say the Y2K Bug was a total scam. Why? Because nothing - well, hardly anything - happened. They forget that for two or three years computer programmers and systems analysts were scrounging through every line of legacy code in every financial institution, in every airplane cockpit, in every computer controlled device imaginable to see whether it contained the Y2K Bug. And many devices did. Our software at a company I was one of the owners of at the time had various manifestations of it, all of which had to be fixed and fixed good. This was the case in countless organizations the world over. That the Y2K Bug did not cause the chaos which was predicted is testimony to the hard work of hundreds of thousands of workers and programmers whose sole aim, for years, was to see that it didn't happen. It's very easy for the cyninc to say something with potential to do harm was a fizzer... when they survive it. Further, it's almost human nature to experience that feeling of euphoria at being a survivor. Then to say, "I wasn't scared anyway. It was the other bloke." This is not to say that there aren't some scammers hiding behind the GFC seeking profit. Just as there were scammers in the Y2K Game, milking the gullible, there are fiscal scammers at work right now. One company that I work with very closely right now is one of Australia's most profitable. They are making more money in the middle of the GFC than they were before it started. Yet, about two months ago, they declared themselves broke. They couldn't afford to pay contractors and suppliers. Everyone would have to lower their prices to suit this big client who gave them so much work. Of course they were [i]not[/i] suddenly broke. They were richer than ever. But some clever bean counter decided to rule off the page with a red pencil and declare fiscal hard times. Artificial? Yes. Clever? Indisputably. Broke? No way. It was simply a nasty method to get their suppliers to drop their prices so the company could make more money. "Times are tough" they told their suppliers, and screwed them for a few lousy dollars extra, chanting "GFC! GFC!". And it's working, still. Pacific Brands (Bonds) was another example. They did not leave our shores because of the GFC. They left because they wanted to make things cheaper. The GFC was a convenient cover, and almost every newspaper, every politician, every economist and, most importantly, just about every punter out there swallowed this guff whole. So, there are opportunities for all to profit from the GFC. Smarties at the ASX buy low and sell high. Cynical companies declare themselves penniless and take it out on their best suppliers, magically producing record profits at reporting time. Even more cynical companies take it out on their staff, the very people who made them their money, but are now no longer useful as "economic units". Politicians use every trick in the book to blame each other for the crisis. But of these politicians, those on the government side can least afford to be wrong. Because if they are, their fate is political oblivion. The likes of Malcolm Turnbull, who is so wrong, so often, just make themselves laughing stocks, to survive until they can move on to the next carnival sideshow tent and ply their confidence tricks on a fresh bunch of mugs. The Rudd government could not to afford to do nothing. Just as with the Swine Flu, if they had done nothing and a disaster had happened, the fate of oblivion would not have been confined just to politics, or politicians. Real people would have died real deaths in their thousands. If the GFC had not been met at the front door and repelled in force, real jobs and real families would have disappeared into an economic black hole dug not by energy and hard work but by neglect. It is very easy now to say, "Hey! That wasn't so bad!" about all kinds of near misses. What is really [i]hard[/i] to take is that the Turnbulls of this world try it on so often and that get away with it at all.

Ad astra reply

8/05/2009BB, Joseph Goebbels said: [quote]"A lie, if audacious enough and repeated enough times, will be believed by the masses."[/quote] No doubt Turnbull believes that too. He knows that his representations of the facts are lies, but for him the means, however unworthy, justifies the ends – regaining of power. His rusted on supporters will believe him, as may some swinging voters who can’t think or can’t be bothered thinking. But anyone with an open thinking mind will be disgusted with his disingenuous antics. Your account of the exploitation of the GFC by some businesses is disappointing, but then I suppose that was to be expected. The dilemma for the Rudd Government is how to show how much worse the situation would have been without its stimulus packages. A double blind cross-over trial would do, if that were possible! So Turnbull can rant on endlessly about how no good was achieved, but of course lots of bad, and no one can refute this with certainty. But the signs are encouraging – increased retail sales and unemployment easing (maybe the figures are suspect, but there they are). Scroll down on Peter Martin’s blog to see some interesting figures. The disgust with Turnbull’s Press Club performance extends to some that might be expected to be supportive. Read what Christian Kerr said in his [i]House Rules Blog[/i] in [i]The Australian[/i] yesterday in [i]Little appetite for Mal’s leftovers[/i] The comments are worth reading too.


9/05/2009How often have we read Liberal propaganda about how, when in government, they "steered us through" the Asian crisis, the SARS epidemic and the 911 economic fallout? They are always most keen to talk up the gravity of those (relatively minor) external events, but, now, when there's a *real* international crisis with deep ramifications for Australia, they make as if it hardly exists at all, and to the extent is is happening, is being beaten up and used by the government as an "excuse" for its "incompetence". As you said, Ad Astra, an audacious lie, from the dishonest party. To my analysis, their "no GFC" rhetoric is tailored and intended to resonate with those from one (or more) of the following groups: 1) The terminally stupid and unaware who neither know nor care about events outside their own myopic bubble of existence; 2) The rusted-on anti-Labor rump who reject everything Labor stands for and does, for whom ideology trumps logic, scrutiny and integrity every time; and 3) Those we might call "Lying-Rodent-devotees" who, through ideology or long conditioning, happily swallow every lie the Liberal Party tells, the more audacious the better, to whom truth is inconvenient, if not downright objectionable when it clashes with their ideology or prejudices. Groups (2) and (3) are, and always will be, Liberal voters, who vote that way every time regardless of how unethical or dishonest the rhetoric and actions of their party of choice. Group (1), the inward-looking, ignorant, narrow-minded, bigoted type are more likely than not to be conservatives also. As John Stuart Mill observed in the nineteenth century: "Conservatives are not necessarily stupid, but most stupid people are conservatives." Therefore I see the reason Turnbull, Hockey et al are lying their heads off is as a means of connecting or re-connecting with their core support base. (That's just what a party in trouble does: attempt to hold its core support.) Those senior Liberals know, just as we here know, that if they were to tell the truth (a turn-up for the Liberal books if ever there were one), their credibility would be diminished. Diminished because the truth is that the GFC is very real, it's big and dangerous, with tangible, quantifiable effects on the Australian economy, and the government is acting prudently, responsibly, and in a timely manner to mitigate its effects on the people. If the Liberals actually acknowledged that reality, their hyperbolic rhetoric about debt, deficits, unemployment, would be shown as unethical and without value, and worse, insulting to the very Australians that the government is working so hard to help. Consequently, we may never expect the truth to pass the lips of these inveterate, ethics-free twisters and concealers of the truth. It's terribly, terribly hard to respect them or even find a good word to say for them. I'm inclined to think they should insert an extra 'e' in the party's name, making it: The LIEberal Party. THAT'S got the ring of truth to it anyway.


9/05/2009The more I see and hear Truffles using his 'monumental' brain, the more I see a man who does not believe what he presents as his own views. He is just a barrister using his expertise to plead the innocence of his guilty client by pulling the wool over the eyes of both the judge and jury. A barrister will always do his utmost to skirt around the unclean elements in his client's background and strive to discredit the evidence of prosecution witnesses. This is how he approaches his job as leader of the opposition - not as an alternative Prime Minister, but as a barrister whose job it is to get his client off the hook. I worked for a barrister many moons ago (I was his secretary) and watched him rise to great heights in his profession. He was a man I admired greatly because of his compassion, integrity and honesty and during his long career and until the day he died he did not compromise these charisteristics. I saw him either refuse to defend those he knew were guilty as charged and even to withdraw from a case when he discovered his client was guilty and that the case he had built in defense of that client was built on a pack of lies. I asked him about all of this once and he said 'I cannot, and will not, defend anyone I know for certain is guilty. There are times I might suspect my client is not being entirely truthful and in hindsight I have found my suspicions unfounded or the untruthfulness was not related to the charged offence.' I think Truffles finds himself defending a client he doesn't believe. He no doubt tells himself that it's okay to gloss over or distort the truth because it is politics and not a court of law.

Ad astra reply

9/05/2009BB, On overnight reflection on your opening comments, I suspect that those you mention who are inclined to believe Turnbull’s rhetoric have not yet been directly affected by the GFC. In contrast, those who have lost their job or know someone close who has, or who are on shortened hours and finding it hard to make ends meet, those who have gone out of business or have had to dismiss staff, those who have had their self-funded pension severely diminished because of falls in the stock market, those who face an uncertain future because of falling sales; all of these folk know what the GFC is all about because they feel the pain. They don’t see it as a nebulous event manipulated by politicians to scare the living daylights out of them. They are the ones who appreciate what the Government is doing in an attempt to ameliorate the impact of the GFC. It’s so easy to be sceptical and dismissive when one is not affected. The likes of Andrew Bolt are the ones who are guilty of pushing the line that it’s all a hoax, just like climate change, and his sycophants lap it up. Rx, What an astute analysis. The Turnbull-Hockey line would appeal to those you describe, but few others. Your argument that they are simply aiming to shore up their traditional support base is plausible. If that’s all they accomplish, I suppose it could be argued that there’s little to be concerned about, but I, like all who have responded to date, detest so strongly the misrepresentation and downright lies, that I feel compelled to do my tiny bit to expose them for what they are. I suspect there are more than a few in the media who feel the same. Kerry O’Brien is one; even Christian Kerr took a dim view of the Press Club address. Others may not yet be prepared to stick out their necks and call them for what they are – frauds. But if one can judge from the opinion polls and the satisfaction/dissatisfaction ratings, the average swinging voter is not turning to Turnbull. His credibility is steadily decaying, and will not reverse until he changes course. As described in another piece, Turnbull’s Terrible Trifecta: Negativity-Arrogance-Disingenuousness is the albatross around his neck, and unless he gets rid of that he’ll get nowhere – the people have stopped believing him and so have stopped listening, just as they did with Johnnie. janice, You’re so right, Turnbull still behaves as a barrister, whose aim is to win no matter how contemptible his client. As all barristers know, truth is so often sacrificed on the altar of the need to win. The one you describe is a happy exception. As I asserted in an earlier piece, Turnbull is not a politician, never has been, and I suspect never will be. He is at core a barrister, with banking and business thrown in. While he continues to portray any of these past lives, he will lack credibility for the job he’s trying to do, to be leader of a major political party and the alternative PM. I agree with you that he’s mouthing words in which he does not believe. His rhetoric sounds hollow, full as it is of clichés and very old chestnuts, which diminish his credibility day after day.

Bushfire Bill

10/05/2009With the added rider that, as barristers do, when he loses the case he'll walk off into the sunset, or dinner at The Rock Pool, whichever occurs to him first. Turnbull cannot afford to be a bleeding heart. There's so much to do, so many more scams to run outside politics. The client, on the other hand, will have plenty of time to contemplate the folly of appointing a professional smartarse to plead their case. Such is life in Lawyer Land.


10/05/2009I have to disagree on the subject of Turnbulls intelligence. Nothing that I have seen supports the premise. It seems to me that everything he has done has been handed to him, complete with script and timetable. My big worry is, that should he achieve the Prime Ministerial office what will those who have engineered him demand of him....and how much will it cost us?
How many Rabbits do I have if I have 3 Oranges?