The Federal Politics Thread

[Dog]

K

Your original point Dog was not to believe what the "expert" economists are telling us about the underlying strengths/weaknesses of our and Chinas economies. In order for this list to be relevant to the health of our economy , you first need to know what percentage of the population are employed in each skill. I wouldn't have thought an 11% increase in organic farming, or a 5% increase in veterinary services is going to stave off the mass unemployment that is now underway. Given that 2 in the top 10 relate to banking/brokering/investment service is an indication of the large number of retirees parking their super, and people getting advise on their redundancy packages. This list is hardly proof of a booming economy. As for the alternative to the current government, you must remember that Rudd gave us a recession free economy at the last GFC by a massive spend. Unfortunately much of it was not on relevant wealth creating infrastructure , and the current government has committed to some huge spending initiatives. NBN/Gonski/Disability scheme, green schemes etc, and given the state of our budget which is rapidly going further into debt, Rudd will not be able to spend our way out of trouble this time around.

Claybro, you only asked which areas are booming, you may also want to consider the following before running your country down.

This is the economy that has :
grown 16% since the GFC when rest of the western world had stalled,
comparatively low debt,
low unemployment,
highest ever personal savings at 10%,
low inflation,
Lowest personal credit card debt for years
lower interest rates than under John Howard
recently past Norway as having the highest living standards,
building the worlds largest average size homes,
record purchases of motor vehicles at over 1,000,000 for the last three years.
Jumped 3 positions on the world GDP rankings.
Achieved and maintained AAA rating
Consumer goods have never been cheaper
And we are about to be the worlds largest exporter of LPG
And while commodities prices may have fallen the massive investment in the mining sector is about to see huge volume increases

You also ignore that the drift up in unemployment figures now include thousand of single mothers that have now been shifted from single mother pensions onto new start and includes all the public service jobs slashed in OLD (the state that now has the highest mainland unemployment rate)

Abbott turning back the boats, cutting thousands of government jobs, scrapping the new education investments, cutting $500m from the car industry and buggering in up the NBN ain't going to help mate! Just going to stall the economy like QLD and the rest of the western world.

When it comes to AAA ranking ''No Liberal government has ever achieved this coveted trifecta from all three global ratings agencies.''


Read more: http://www.theage.com.au/federal-politi ... z2YrlRetJi

[Dog]

Claybro, Just so you know how much room we have further stimulate the economy

[Dog]

Keep positive Australia!



Keep positive Australia we are the lucky country and relatively getting luckier.

[claybro]

Well that's it then. We'll just post those rosy figures to all the companies laying off staff- because these figures tell them that employment creation is at record levels (it no longer is), all the mining companies closing mines that they are exporting record volumes despite crashing prices (they no longer are), and to the public in general, don't worry about losing your jobs because interest rates are at an all time low and consumer goods are cheap you can live much longer on your redundancy package. To those only working 5 hours a week, well don't worry, we killed off the evil Liberal Work choices policy so your 5 hours per week are protected, unless your employer goes offshore or bust. Also in the real world, Australians have collectively just taken a 15-20% pay cut as we now import everything we consume and the $AUS has fallen virtually overnight. When our dollar falls, and commodity prices fall, those government debt levels wont look quite so rosy, our capacity to repay is much reduced, which is what the economists you roundly ridicule have been warning us of for some time. There is a reason people aren't feeling secure at present, and in the real world, people in general are doing it tough, and it is about to get tougher. Kevin's spell on the population might last just long enough to get him over the line, but whoever wins will be in for a rough ride.

[Aidan]

Also in the real world, Australians have collectively just taken a 15-20% pay cut as we now import everything we consume and the $AUS has fallen virtually overnight. When our dollar falls, and commodity prices fall, those government debt levels wont look quite so rosy, our capacity to repay is much reduced, which is what the economists you roundly ridicule have been warning us of for some time.

Any economist whose fact checking is so abysmal that they think it is worth warning us about deserves severe ridicule, because it isn't true in the real world.

The Australian government ONLY borrows in Australian dollars.

There may be a little bit of (decades old) foreign currency debt left - but if there is, it's much less than 1% of the total.

Australia's capacity to borrow in Australian dollars is unlimited, and we can even do so without increasing our net debt. Another stimulus will certainly increase our gross debt, but Australia's net debt depends more on demand for Australian bonds.

The main reason why things aren't going very well at the moment is because of the Reserve Bank board's incompetence. They've set interest rates too high for four years, so foreign investors bought huge amounts of Australian bonds, pushing the Australian dollar up and increasing our net debt. Australian banks also sourced too much money from overseas, again pushing our dollar up. But the long term value of our dollar depends on our balance of trade, and our productivity isn't yet high enough to sustain a dollar value that high. Investors are now realising that and bailing out, but that's reducing our net debt and correcting the value of our dollar to a more sustainable level where we can better compete with overseas economies.

I don't think either side of politics truly understands that, but at least Rudd understands the difference between gross and net debt and is willing to increase spending where needed.

[claybro]

The Australian government ONLY borrows in Australian dollars.

Australia's capacity to borrow in Australian dollars is unlimited, and we can even do so without increasing our net debt. Another stimulus will certainly increase our gross debt, but Australia's net debt depends more on demand for Australian bonds.

Forgive my ignorance, but isn't this an example of the government just printing more money to buy its way out of trouble? Doesn't this actually decrease living standards, as our dollar devalues and given we no loner manufacture anything we consume here? Is this not why America has gotten itself into such a perilous economic state?
And what of our manufacturers, farmers, miners, who borrow from banks, who obtain their funds from offshore? How does the government borrowing more Aussie dollars help those companies that compete in the international market that have kept our economy afloat in the last decade?

[Dog]

Claybro, actually every cent the $A falls, the better position government debt will be. Company profits and tax returns improve.

[Matt]

Sunday Mail splashing tomorrow on carbon tax being "scrapped" as of July. Moving to emissions trading scheme quicker.

Another poll bounce for Labor on the way?

[Aidan]

Forgive my ignorance, but isn't this an example of the government just printing more money to buy its way out of trouble?

Effectively it is.

Doesn't this actually decrease living standards, as our dollar devalues

Technically yes, as it means we can't afford so much foreign stuff. But it's far preferable to the much bigger drop in living standards from losing the opportunities to make money.

and given we no loner manufacture anything we consume here?

That's simply untrue.

Is this not why America has gotten itself into such a perilous economic state?

America's perilous economic state is the result of its federal government failing to increase its spending anywhere near enough to compensate for the spending cuts by state governments and the private sector.

And what of our manufacturers, farmers, miners, who borrow from banks, who obtain their funds from offshore? How does the government borrowing more Aussie dollars help those companies that compete in the international market that have kept our economy afloat in the last decade?

They benefit, as their loans are in Australian dollars, as are their wage bills and a lot of their capital costs, so internationally they are more cost competitive. The banks lose out, but not very much as they've known for a while that the Aussie dollar is overvalued, and have hedged against its movements with CFDs as well as increasing the proportion of domestically sourced funding.

[claybro]

America's perilous economic state is the result of its federal government failing to increase its spending anywhere near enough to compensate for the spending cuts by state governments and the private sector.

So you are advocating that the American government spent even more money it doesn't have ??? Staggering.

That's simply untrue.

Untrue that even much of our food in now being imported, Cars, electrical, furnishings, clothing? Just what do we manufacture for domestic consumption now?

They benefit, as their loans are in Australian dollars, as are their wage bills and a lot of their capital costs, so internationally they are more cost competitive. The banks lose out, but not very much as they've known for a while that the Aussie dollar is overvalued, and have hedged against its movements with CFDs as well as increasing the proportion of domestically sourced funding.

Problem is, when banks lose out, they stop lending money.

[Dog]

The US economy produced surpluses under Bill Clinton, unfortunately George bush run up deficits by cutting taxes and borrowed trillions on un-winnable wars.

I have to laugh when I hear people say "cut taxes and wages to stimulate the economy," it didn't work in the US, just put them in debt.
You only have to look a Greece, low wages and no one paid taxes for years and its a basket case! (No stimulated economy there)

In the US the Bush tax breaks for the super rich along with insanity low wages for the average bloke means there is a shrinking middle class, it was this larger middle class in the 1950s 60s and 70s who use to buy the cars and homes that kept the economy strong.

The super rich don't stimulate the economy with their tax cuts, they just invest their money abroad, buy foreign cars and luxury goods and don't put back. (Today one the the 2% of super rich buys his one imported Ferrari for $600k, in the 50's 60's and 70's the 45% of average Joe's " would buy 15 locally made cars for the same relative money. And it's that growing inequality that's stuffing the west.

Even Henry Ford knew that he had to pay his workers enough income that they could aspire to owning a ford. (Was the basis of the western capitalism)

I can never see the logic when l hear small business oppose national wage rises, just on mathematical logic alone, they all have far more customers than employees so they have to be in front. Any capitalist knows that your customers can never have enough money!

[rev]

The US economy produced surpluses under Bill Clinton, unfortunately George bush run up deficits by cutting taxes and borrowed trillions on un-winnable wars.

They won the Iraq war actually.
Afghanistan is winnable, very winnable, they just restrict them selves and how far they are willing to go. Hence why it's dragged on so long. But that's another topic for another thread for another forum.

I have to laugh when I hear people say "cut taxes and wages to stimulate the economy," it didn't work in the US, just put them in debt.
You only have to look a Greece, low wages and no one paid taxes for years and its a basket case! (No stimulated economy there)

Actually most people did and do pay taxes.
Those who did not pay any taxes, or a very very insignificant amount of taxes, were the wealthy people at the top of the pyramid. Do you want to know how many tens of billions this tiny minority which is less then 3% of the population actually owes in taxes? More then 70 billion Euros. They have many more tens of billions of Euros stashed away in bank accounts in Switzerland, the Caymans etc.
And they still aren't paying taxes, while everyone else is being dragged through hell.
And trust me, the problems in Greece are a little more complex then wages and taxes. It is a basket case, but not for the reasons you think or know. But I'll spare you as it is off topic.

The super rich don't stimulate the economy with their tax cuts, they just invest their money abroad, buy foreign cars and luxury goods and don't put back. (Today one the the 2% of super rich buys his one imported Ferrari for $600k, in the 50's 60's and 70's the 45% of average Joe's " would buy 15 locally made cars for the same relative money. And it's that growing inequality that's stuffing the west.

The widening income gap is not only present in the West.

I can never see the logic when l hear small business oppose national wage rises, just on mathematical logic alone, they all have far more customers than employees so they have to be in front. Any capitalist knows that your customers can never have enough money!

Do you or have you ever run a small business?


The problem in Australia isn't wages.
The problem is efficiency. We need to be more efficient on the money we earn currently. That might mean working more hours for the same amount of money, or a very very small increase in pay.
It might mean firing people who are too slow, and hiring people and training them to work harder, faster. It might mean bringing in more automated robotic systems to speed up production.

But the easy option is obviously to close factories down and increase production in the cheap labor markets that exist, and then import those products here.

Ford announced it will be closing Australian factories in 2016, which will mean the end of the Falcon.
They have now announced that from 2016, they will be importing a new Mustang model to Australia to replace the Falcon. Apparently one of the head honchos is coming here to announce the "GOOD NEWS".
Good news?
You've just told a few thousand people their jobs are gone in 3 years. Which directly effects tens of thousands of others in the industry which provide parts for those factories.
And you want to come here and tell us the good news that you will be importing cars to replace the locally made car you've axed? Allow me to say FUCK OFF.


The only party we should be voting for, as Australians, is a party which will put Australian interests ahead of the interest of multinational global corporations.
If they do not invest in local manufacturing and local industries, then we are royally screwed(and that's part of the more complex problems in Greece).

Do you think South Korea puts our interests first?
Do you think China puts our interests first?
Do you think America puts our interests first?
Do you think Germany puts our interests first?

No, they put their interests first.
Do you think Germany and China are the worlds two biggest exporters because they put other nations interests, or the interests of multinational corporations first?
They put THEIR interests first. They look after THEIR OWN first. They protect THEIR OWN first.

And at the end of the day what are we going to lose if we put our interests first? NOTHING.
What, they wont export consumer goods to us anymore?
That's alright..practically everything imported into Australia can be manufactured and/or grown here.
But we've allowed our politicians to sell us out to the multinationals, with free trade agreements and all the rest of the globalization bullshit.

Holden was exporting cars even to the Middle East. What happened to that?
Meanwhile, Mitsubishi long gone now, Ford on the way out, Holden uncertain if it'll stay, we are getting more foreign makes here.
Opel, Skoda, Great Wall...and I'm sure I've missed others that are relatively new to the Australian market.

Ever driven out to the country and seen grain silos etc with Vitera or however it's spelt painted on them? They aren't Australian..
You see the Veolia trucks everywhere? They aren't Australian either..

Look deeper and you'll find much more.

[Dog]

The problem with our car industry is we don't own it, decisions are made elsewhere. I am sure we have the design, engineering ability, the vision, the technology to build something the world wants but we are not part of the decision making process.

[Aidan]

America's perilous economic state is the result of its federal government failing to increase its spending anywhere near enough to compensate for the spending cuts by state governments and the private sector.

So you are advocating that the American government spent even more money it doesn't have ??? Staggering.

Nothing staggering about it - after all, it kept Australia out of recession. Indeed Keynes proved in the 1930s that it's the most sensible course of action.

The terrible downward spiral of many European countries trying to reduce their deficits as their economies declined (which caused their economies to decline further, in turn reducing tax revenue and increasing social security bills thus failing to make much of a dent in the deficit) should be enough to make the staggering position the one of Advocating America waits until it has the money before it spends it. But you seem to have trouble comprehending that, so I suggest you try thinking of it a couple of other ways:
• Under the current arrangements, money only comes into existence as debt. Why should only the private sector bring money into existence?
• Isn't it better for governments to borrow now (when interest rates are very low) than to wait until after the recovery (when interest rates are higher)?

That's simply untrue.

Untrue that even much of our food in now being imported, Cars, electrical, furnishings, clothing? Just what do we manufacture for domestic consumption now?

We do import some food, but most food here still comes from Australia. Our car industry isn't dead yet, and even the electrical and clothing industries are still around (though of course we have to concentrate on the high end now that the days of denying Australians access to the benefit of cheap imports are long gone).

What did you think all those factories at Edwardstown and Lonsdale were for?

They benefit, as their loans are in Australian dollars, as are their wage bills and a lot of their capital costs, so internationally they are more cost competitive. The banks lose out, but not very much as they've known for a while that the Aussie dollar is overvalued, and have hedged against its movements with CFDs as well as increasing the proportion of domestically sourced funding.

Problem is, when banks lose out, they stop lending money.

No,when the banks think they're going to lose out, they stop lending money.

[claybro]

Aiden, contrary to what you might think, I do agree with stimulus spending by governments, it is just the nature of that spending that concerned many last time around. $1000 dollar cheques and playground shade structures for schools was a complete waste and did nothing to benefit the economy long term. The stimulus package back at the GFC may have prevented us going into recession for a short period, but the continuing growth in our economy over the last couple of years has relied entirely on mining and China. Problem is, this income stream is now slowing rapidly. What makes people nervous is that Kevin has shown his willingness to spend big time to keep us bumping along, but they don't trust his ability to make some tough or unpopular choices that make us more competitive.