LIBERALIES

 

  1. Look At the Reality; They Said They Had a Plan; Where Did It Go?
  2. A Modest Proposal
  3. Concerted Campaign of Lies and Scaremongering
  4. The Cost of Costello
  5. The Intergenerational Report and life expectancy
  6. Lies and Claims
  7. The Claim about Carbon Reductions
  8. Partisanship
  9. Who hasn’t heard of ‘Labor’s debt?’
  10. Morrison and the Donkey
  11. Sunday Penalty Rates
  12. You Cannot Have Rich People Unless There Are Poor People
  13. Surplus Years Are Rare
  14. What Is the Debt Reality?
  15. Is Paying Down Government Debt Even a Good Thing?
  16. Lazy Balance Sheet
  17. Foreign Debt
  18. John Howard and Costello Knew the Problem
  19. Current Account Deficit
  20. Why Is Government Debt Better Than Private Debt for Major Works?
  21. Net Liability Position with the Rest of the World
  22. This Is an Example of the Lies That the Libs Get Away With
  23. The Stimulus Package
  24. More on Foreign Debt and the Balance Of Trade
  25. What’s The Danger for Australia You Ask?
  26. Best Time Ever To Be Nimble and Agile – New Slogans
  27. Manufacturing
  28. Honesty in Government
  29. The Economy and the Conservatives
  30. Negative Impact of Free Trade Agreements
  31. Royal Commissions
  32. Are All Deaths Equal?
  33. Attack on Our Civil Liberties
  34. Who Would Be Most Affected By a GST Increase?
  35. Unions
  36. Decline in union membership

 

  ‘It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a ‘dismal science.’ But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance.’

– Murray Rothbard

Why this article is called ‘LIBERALIES’ or ‘Liberal lies’ rather than ‘political lies’. It’s not a belief that only one side of politics is capable of lying. No attempt has been made to dig into the past looking for lies or untruths or the absence of truth in all or even one particular party. If this article seems heavy on the Conservative side of politics it’s because they are in power now and look like they will be again after the next election in 2016.  Also they are in power 75% of the time.

It’s just that it is a danger to us all that the Conservative parties in government refuses to accept any blame for the shape of the economy or the country as a whole. Worse still, they lie deliberately about it. It’s always the fault of Labor and sometimes the Greens (greenies, lefties, tree-huggers) and Independents or ‘cross benches’ or just about anybody.

Worse still they believe in their own divinity. They believe they are ‘born to rule’.

They believe in their own mythology. They cannot tolerate dissenting opinions.

British parliamentarian and historian Lord Acton is famous for his 1887 pronouncement, in a letter to the Bishop of London, Mandell Creighton, that "power tends to corrupt, and absolute power corrupts absolutely".

Many, however, may not have heard the words following that sentence: "Great men are almost always bad men, even when they exercise influence and not authority, still more when you add the tendency or the certainty of corruption by authority."

Those who blindly follow them are also caught in the loop even though as Tim Dunlop wrote on 13 Mar 2015: Tony Abbott and Joe Hockey are on track to destroy one of the most commonly held beliefs (misbeliefs) in Australian politics, namely, that the Coalition are better economic managers than Labor.

Indeed, smashing this "truism" may be one of their few lasting legacies.

It’s amazing that so many high functioning sociopaths could find each other at the same time. Maybe it’s not so surprising; they had half a lifetime to do it and they would recognise each other. Their common tread is self-gratification through manipulation, coercion and deceit.

When did the Liberal lies start in recent times. Lies got a lot of traction in the Howard/Costello era. Remember Peter Reith and the “Children Overboard”?

 

 

 The lies became extremely amplified in the Abbott era. We all know Abbott ran a Prime Minister's Office powered by paranoia and delusion: enemies were everywhere and the leader and his powerful chief of staff were the only people who could be trusted; the media was out to get them, even though they had the backing of Rupert Murdoch's empire.

Abbott and Hockey are gone now and nothing has changed, except rhetoric, but the fortunes of the government greatly improved for a while without a single policy change at this time in early 2016.

Hockey’s fortunes have greatly improved too without him actually doing anything.

Leo Tolstoy said: ‘In order to get power and retain it, it is necessary to love power; but love of power is not connected with goodness but with qualities that are the opposite of goodness, such as pride, cunning, and cruelty.’

The wealthy are stashing cash in tax havens Do we applaud the lack of services that result from those tax avoiders? Do you applaud their freeloading on the infrastructure, systems and resources that have been paid for by out of taxes supplied by the wage earners who actually pay the tax they are supposed to?

Theirs is a typical neoliberal view. Read more: Neoliberalism – the ideology at the root of all our problems.  

Still, even as they undermine the economy they are supposed to be improving, it is remarkable to see just how sticky the myth of their financial wizardry is. For instance, during his speech at the National Press Club, former PM Tony Abbott intoned:

This government will deliver Australia's economic future because only a Coalition government can. As Liberals and Nationals, sound economic management is in our DNA. We've done it before and we are doing it again.

What's remarkable about this is not that he said it, or even that he believes it (because he is delusional), but that his assembled audience of media heavyweights didn't burst out laughing.

For some unknown reason the myth of Coalition economic management is supported or at least unquestioned by most of the media.

It is important to stop retelling ourselves this ridiculous fable about the Coalition's economic credentials because it distorts so much of the rest of our political debate. Indeed, one of the reasons people are shocked – to the point of denial – about how bad the Abbott Government ran the economy, is exactly because very few people ever called out the Howard government's economic failings.

As economist Stephen Koukoulas noted back in 2012, Howard and Costello were accorded a respect their actual economic record didn't deserve:

The budget papers ... show that the Howard government was the highest taxing government in Australia's history. In 2004-05 and 2005-06, the tax to GDP ratio reached a record high 24.2 per cent. In addition, there have been only seven occasions where the tax to GDP ratio has been in excess of 23.5 per cent of GDP and all seven were under the Howard government.

In a similar vein, in the last 30 years, there have been 10 occasions when the tax to GDP ratio has been below 22.0 per cent of GDP and all 10 were under a Labor Government. To put simply, the Howard government was a high taxer, while the current [Rudd] Labor Government is a lower taxer.

In terms of government spending, there have been only five years in the four decades leading up to 2012-13 when real government spending was cut in real terms. None of those cuts were delivered by a Coalition government.

Maybe if these facts were better known, if they were hammered by the media in the same way they hammered 20-year-old stories about Julia Gillard's time as a lawyer, the incompetence of Messrs Hockey and Abbott would not have been such a well-kept secret.

(Unlike real GDP, which only measures how much Australia produces, nominal GDP measures how much we earn for that production. GDP can go up but nominal GDP can be down, as it is now. Australia is selling more minerals but getting less for them. So the government uses the most flattering figures.)

Look At the Reality; They Said They Had a Plan; Where Did It Go?

The reality is all our woes simply can’t be the fault of the Labor government, or past Labor governments, as the Conservatives (Currently the Liberal Party are the dominant party in a coalition with the National Party of Australia (previously known as the National Country Party) would have us believe. After all they have been twice as long at the helm since Federation. The ratio of years in power is 2:1 – 76yrs to 37yrs.

Despite what most people would assume because of the Abbott and now the Turnbull and Morison sloganeering, mostly during their time in office the Liberal party has run budget deficits, 75% of the time in fact and it missed being in power for both world wars. Menzies had the most frequent deficits and Fraser’s deficits were big by the standard of the time.

The term Liberal and Conservative is somewhat interchangeable even though the two words as adjectives are the opposite of each other.

(One is Tolerant of change and the other is Resistant to change. Is it any wonder they are confused about which direction they should take?)

They said they had a plan, where did it go?

They still have it. The midyear economic and fiscal outlook (Myefo) on Tuesday 15 Dec showed they were up to the same old tricks, singing from the same old songbook.

Their plan is the same – take as much as possible from those with the weakest defences.

When they first got into power they laughed and smoked their cigars and danced around the room with their glorious revolution in sight. They couldn’t believe it when the punters thought it was unfair to take so much from some of the poorest.

So they changed their plan….they made it fair.

They took from all the poor not just some of them.

So, once again, it is welfare cheats, supposedly, not tax cheats who will fill the black hole in the Budget. Of course they will not find any savings there, as they never do, but at least they can pretend to pursue some villain. It would be better if the villains were also, Muslims, illegals, Aboriginals or single mothers as well; and it they were Terrorists welfare cheats that would be a real coup.

That’s the perennial money raiser that never raised any money and usually costs money.

This big taxing, big spending, big debt, big interest bill story doesn't fit at all well with the coalition's rhetoric and sloganeering – and ScoMo and Turnbull seems to still have a weak spot for a little sloganeering.

Which is why he's happy to drag a Centrelink customer over the coals if he or she has been paid $100 more than the rules allow because it's a saving. And who doesn’t hate a Centrelink cheat? And you can come out and say that. They are not protected by ‘Political Correctness’ and the bad thing about Political Correctness is it makes bigots harder to spot; which creates the pleasant illusion that society is progressing.

It's a monumental embarrassment to the Liberal Party that the MYEFO shows it runs a big-taxing, big-spending government. It's something Morrison and the Cormannator would prefer you didn't notice

The MYEFO confirms that tax revenue will rise to 23.1 per cent of GDP in 2018-19" …Not Whitlam, nor Keating, nor Rudd, nor Gillard ever taxed this high. The only government to have a higher tax-to-GDP ratio was John Howard, who exceeded this rate in eight of his years in office."

Despite the big taxing, the big spending is even bigger, hence the deficit and debt growth. The government will spend 25.9 per cent of GDP this financial year and will stay at or above 25.3 per cent out to 2018-19. Spending under Gillard/Swan averaged 24.9 per cent.

They are also adding in the old ‘savings’ in the budget update despite being rejected:

“Those 2014 budget measures were stalled in the Senate for good reasons,” said ACOSS chief executive Cassandra Goldie.

“If the government wanted to give us a realistic assessment of the budget, they should not be booking savings that are wholly unrealistic,” she said.

The Australian Medical Association has described the proposal as a "co-payment by stealth" but Treasurer Scott Morrison has called on those criticising the government's proposals to "show us the alternatives".

Well, Scomo, meanwhile, in a galaxy far, far away on a different day in a different parliamentary inquiry a different type of reality was dawning in that parallel universe. Virtually nobody, who was rich, was paying their taxes. So he gave them a tax cut. If businesses didn’t have to pay taxes they wouldn’t have to waste their money on expensive tax-avoidance schemes.

Chevron was explaining that reports it had paid just $248 in tax on an estimated $1.7bn Australian profit rerouted through the low-tax US state of Delaware were wrong. It had, in fact, paid nothing, because no tax was due – thanks to the company’s advantageously structured international borrowing.

Almost four in 10 large companies paid no tax last year, according to the first release of tax transparency data by the Australian Tax Office on 17 Dec 2015.

Labor, the Greens and tax campaigners said evidence that nearly 600 of the 1500 largest companies operating in Australia did not pay a cent in tax in 2013-14 raised a question mark over Treasurer Scott Morrison's repeated claim that the government has a spending problem rather than a revenue problem.

The 1539 companies had a combined turnover of $1.6 trillion in turnover, $169.9 billion in profit, and paid a combined $39.9 billion in tax. 

It would not be an exaggeration to say that the whole dystopia of the Coalition Government can be summarised in Joe Hockey’s farewell speech. The self-aggrandisement, the lies, the inability to face the facts, the inability to show any contrition; they were all there.  

In his attempt to draw attention to his own importance he claimed to have made the greatest political speech of the past two decades? He says his end of entitlement speech back in his opposition days had ‘unprecedented impact’. 

(Hockey and another thing(s)

Fairfax reports that as the former treasurer Joe Hockey delivered his infamous “Age of Entitlement” speech in 2012, he “received a letter that threatened to derail his ambition to secure the second most powerful job in Australian politics at the forthcoming election”.

The two-page letter advised Hockey of an “apparent fraud” against his taxpayer funded Cabcharge card involving alleged “phantom journeys” amounting to thousands of dollars.

“We intend to refer this apparent fraud against your card to the federal police,” the letter from Cabcharge company secretary Andrew Skelton advised.

Documents obtained by Fairfax Media after a two year freedom of information process show in relation to Mr Hockey’s account the rules for MPs using privately chauffeured hire cars were repeatedly broken.

Drivers from a favoured hire car company had filled out and signed on Hockey’s behalf Cabcharge dockets worth at least $10,000, dating back to as early as 2009.

Several Cabcharge dockets from 2010 obtained by Fairfax Media state they are an “emergency docket ... to be used only in the event of failure of terminals”.)

However, as Greg Jericho of the Guardian says:

Last year Joe Hockey had a terrible August. On the fourth of that month, on the Today Show, he erroneously suggested as a “fact” that “higher income households pay half their income in tax”.

(But you don’t pay 47% income tax on your whole income – only on the income earned over $180,000. So if you earn $200,000, you would pay 47% tax on just $20,000 of your income - $9,400. The rest of your income is taxed at the lower marginal rates just like everyone else.

Australia’s income tax system is a progressive one. We pay higher rates of taxation the more we earn. There are five tax brackets: [$0 - $18,200 – 0%] [$18,201 - $37,000 – 19%]

[$37,001 - $80,000 – 32.5%] [$80,001 - $180,000 – 37%] [$180,001 + – 45%])

Greg Jericho continues:

A couple weeks later, when he got himself into trouble over his statements that poor people don’t drive cars, he also revealed his ignorance of progressive taxation – whereby the percentage of income paid in tax increases with your income.

Joe Hockey in his time as treasurer certainly received his share of kicks – including by me (for example, here, here, here, here, here, here and here). …Departing politicians usually go out in style with a speech full of dignity and magnanimity for all, but Hockey’s speech contained so much partisan argument that it allows one final shove to his political funeral barge as it drifts over the Pacific towards his expected new role as ambassador to the US.

Hockey’s speech, given in London in 2012, was a barely reheated 2008 Republican Party stump speech that even Mitt Romney delivered with more plausibility, and was influential only for highlighting how resistant Hockey was to economic reality.

But Wednesday’s speech was almost worse. Railing like someone who had drunk too many glasses of red at an IPA Christmas party, Hockey related how disgusted he was that when his young son broke his leg it only cost “$35 to cover the cost of a waterproof leg cast”.

I guess he could have argued that his tale showed how as a high income earner he paid a means-tested Medicare levy plus a high income rate of tax to fund a system that enabled all Australians to benefit regardless of wealth. He could have mentioned how it demonstrated the social contract in Australia – that wealthy people are less likely to begrudge their taxes going to fund public health because they too benefit.

He could also have noted how this system has ensured public health is never viewed as just a poor person’s health system, but rather one which provides an exemplary level of care.

Instead, Hockey painted it as the reason Australia is in debt. He argued that “we borrow billions of dollars to pay for the health and hospital system, and he [his son] and his generation are going to end up paying for it”. Hockey suggested it was “unsustainable”.

“It is unfair and I will not be party to a generation that passes the buck. What we have to do is live within our means.”

What utter crap. First, why do we need to “live within our means?”

Any major company that was not in some level of debt, nor taking advantage of record low borrowing rates that Australia has at the moment, to both fulfil its obligations or to invest, would see its board of directors sacked.

But no, we have to treat our government with a $400bn budget and a Triple A credit rating as though it is a family with no capacity to borrow from a bank. Idiotic simple-mindedness.

Not only is Australian public spending on health less than the OECD average, we are already one of the highest private funders of health:

Despite Hockey’s protestations and now Health Minister Lea, our health system is one of the most efficient. Bloomberg last year ranked it 6th best in the world – ahead of all English speaking countries and miles in front of the much more privately funded USA system, which came in at 44th.

(Right up to the end Hockey continued with the equivocation of ‘intergenerational theft’: If we borrow money for whatever purpose it is ‘intergenerational theft’ according to his theory. This fallacy of ambiguity as well as his ‘age of entitlement’ slogan is his only legacy. The trouble is he departed with ill grace still proud of it. With the ‘age of entitlement’ slogan it seemed to completely evade him that he and his colleagues were the main offenders.

The salaries and entitlements paid to Australian politicians are among the most generous in the world. The pay is better than in the US, Europe and most democratic countries.

The majority of federal politicians who have announced their retirement this year (2016) will be paid annual pensions of at least $118,000 - and in some cases much more - adding more than $2 million to the annual bill.

Hockey's performance as Treasurer is most memorable for his determination to arrogate benefits from others, particularly the poor and vulnerable, and appropriate them as entitlements for himself.

Something that didn’t make the news here was that Hockey made 13 trips to his $1.5m farm near Malanda, south-west of Cairns, as Shadow Treasurer, and billed taxpayers more than $20,000, the UK The Daily Telegraph reports.

Or this one Joe Hockey's 'frat-house' in Canberra makes $1 million profit after passing in.  

The final price means a hefty profit for Mr Hockey and Ms Babbage, who paid just $320,000 for the home in the salubrious suburb of Forrest. Not bad, particularly considering they could have paid off a large chunk of the mortgage with the taxpayer-funded $270-a-night travel allowance he claimed whenever in Canberra.

Alas, no more. Ms Babbage and Mr Hockey - who lost his job as treasurer last year and then quit Parliament to become US ambassador - sold the house for $1.515 million on Saturday.

Joe Hockey's self-made millionaire wife Melissa Babbage bought the heritage-listed 1930s Canberra home for a song in 1997 and then charged her husband and his Liberal mates to stay there in parliamentary sitting weeks.

Also, the tax payers, on his behalf, were giving his wife more to rent her Canberra house to him for a night than a single Newstart recipient or a pensioner is supposed to survive on for a week. Then there was his Budget attempt to deprive people under 25 of any dole for six months in a time of a shortage of jobs.)

It’s not as bad as the empty VIP plane that flew from Canberra to pick up Foreign Affairs Minister Julie Bishop and her partner David Panton, costing taxpayers at least $30,000 for the round trip. As well it would have generated as much pollution as many people generate in 10 years.

See some of their expanses outlined here.

But Hockey was never going to see himself short. He was in parliament for nearly 20 years andthe base pension for a backbencher, who has been in parliament for that period of time, is nearly $139,000. On top, Hockey will receive additional loading for every year he held a ministerial position, boosting the overall figure.

When he becomes an ambassador he will be of the highest public service band, which would take in ambassadors for large countries like the US, to an average salary of $310,600 a year. When all the perks are taken into account he will actually be better off financially than he was as a make believe treasure. Australia should be better off to but it doesn’t look that way.

British parliamentarian and historian Lord Acton is famous for his 1887 pronouncement, in a letter to the Bishop of London, Mandell Creighton that ‘power tends to corrupt, and absolute power corrupts absolutely’.

Many may not have heard the words following that sentence: ‘Great men are almost always bad men, even when they exercise influence and not authority, still more when you add the tendency or the certainty of corruption by authority.’

Hockey’s attitude is not peculiar to him but is an endemic attitude that pervades the entire system. Because of these ongoing attitudes, and they seem to have become entrenched beliefs, they are unable to fix what they don’t even acknowledge. The lies and half-truths and spin they peddle on a daily basis – it seems like they're pretty good at self-deception and self-delusion too.

As Jonathan Swift said in his 'Polite Conversation,' ‘There are none so blind as those who will not see.’

A Modest Proposal

The Coalition’s first idea and it continues under Turnbull, was to imagine they could drive the unemployed into jobs by starving them, (or Ubering them) despite the well-known fact that there are four times more unemployed than available jobs and most of the available jobs require skills that do not match the unemployed.

It is not unlike the Jonathan Swift 1729 satire 'A Modest Proposal'.

Swift suggests that poor Irish families should fatten up their children and sell them to the rich English land-owners for food.

Swift argues that children could be sold into a meat market as early as the age of one, giving poor families some much needed income, while sparing them the expenses of raising so many children. With 100,000 children out of the population being set aside for dinner, his solution, he reasons, will also help to resolve the issues of overpopulation and unemployment, giving the economy a much needed boost, while making it easier for England to deal with its unruly Irish subjects.

Swift then goes on to offer statistical support for his proposal and specific data about the number of children to be sold, their weight and price and the projected eating patterns of their consumers. He even suggests some recipes for preparing this delicious new meat, reasoning that, with innovative cooks generating ever more delicious new dishes, it will expand and improve the culinary experience of the wealthy, resulting in a healthier and happier population as a whole.

The Coalition’s modest proposal has the same tenet.

Concerted Campaign of Lies and Scaremongering

Only now it has turned into a concerted campaign of lies and scaremongering about the elderly living way too long in the future and probably in the present. Therefore their pensions should be removed or reduced.

There are countries that pay the aged pension to everyone. Our nearest neighbour NZ does although it’s a different system. Australia once did too. The aged pension was even available to ex-Prime Ministers on top of all the other perks. Billy McMahon got some bad press for picking up the aged pension when it was not means tested.

In Ireland, the UK and most European countries all retirees get an aged pension on the basis of their social security contribution regardless of any other pension they may have. This is also the case in the US. People do not have to worry about a means test and account for every penny to the Government.  Australia is really backward in its treatment of retirees.

Pensions and healthcare benefits vary widely across the globe as do people’s perception of their happiness.

The pension means test has undergone several significant changes since 1970. It was abolished for pensioners aged 75 and over in 1973 and for pensioners aged 70 and over in 1975. The means test was replaced by an income test in 1976. An assets test on pensions was introduced in 1985. It operates alongside the income test.

On ABC's Insiders on 25 October 2015, Assistant Treasurer Kelly O'Dwyer suggested that the "whole objective behind the superannuation system" is for people to be able to live on their superannuation savings without recourse to the age pension.

Ms O'Dwyer said: "When it was set up all those years ago in 1993, it was set up to be an alternative to the age pension so that people didn't have to rely upon the aged pension or even the part pension."

That is not the case.

To begin with it wasn’t ‘set up all those years ago in 1993’. When Bob Hawke's government came to power in 1983, up to half of employees, mostly professional and government workers had some form of super, usually quite a good form. Hundreds of small superannuation schemes existed up to 1992 (not 1993 as she said) but they were available to only about 50 per cent of the working population. Anybody could take out superannuation and there were tax incentives to do so.

(Australia’s superannuation schemes were founded in the nineteenth century through deals done with employers by the Labor movement and pre-date the age pension, which only became available after federation, and aimed at taking as many people as possible out of destitution in old age.

The universal compulsory superannuation introduced by Labor in 1992 had a mandatory 3% contribution rate. This was never going to do more than provide a small retirement sum for anyone who did not have other superannuation but it was the beginning of the system we have today which is still very inadequate. Unfortunately many employers modified existing schemes to a version of this new scheme which reduce contributions by employers and employees and provide reduced retirement benefits.)

So, O’Dwyer was rewriting history, or ignorant of it, to suit her point of view that the aged pension is a waste of money and should be removed or at least reduced as much as possible. To show how keen they are to vilify pensioners and to be further disingenuous the department of social security uses life expectancy estimates up to 11 years lower than those used in the government's intergenerational report.

The effect of the departments’ choice is to make it look as if the assets of retirees, who miss out on the pension, will last for the rest of their not so long lives.

However, the government’s intergenerational report makes it look like pensioners are living too long and will be a burden on the tax-payers and the health system, while the social security statistics make it look like pensioners will not live long enough to spend their excessive resources. Living too long and becoming an annoyance but not long enough to spend their largesse is the key problem with the elderly here.

Pensions at a Glance 2015 compared Australia to 33 other countries and found that it ranks second last when it comes to social equity. A massive 36 per cent of pensioners live below the poverty line, which is defined in the report as being half of a country’s median household income. The OECD average is 12.6 per cent.

The Australian Government contributes less to pensioner benefits, just 3.5 per cent of GDP, than any other OECD country, with the average being 7.9 per cent.

The findings mirror those of the Global Age Watch Index 2015, which ranks 96 countries in total and found that 33 per cent of Australians over 60 were living in poverty. 

The Cost of Costello

Strangely enough the lies of the Liberal party seem to have stemmed from or at least grew astronomically during the years of ‘Honest’ John Howard’s government. The lies of that period have caused the conservatives to continue the lies ever since. Particularly they have to lie about the ‘debt and deficit’.

John Hewson, former Liberal leader, economist and now professor with the Crawford School of Public Policy at the Australian National University, underlines the point:

“The tax cuts Howard and Costello gave are now costing [the budget] about $30 billion a year, and the deficit’s $40 billion.”

Without those cuts and the $9 billion Hockey gave – unasked for and against the will of treasury – to the Reserve Bank, says Hewson, “the deficit problem wouldn’t exist”.

And that’s without including some $40 billion in tax concessions for superannuation, which accrue overwhelmingly to the wealthiest 20 per cent of taxpayers.

“You can easily add it up to show that the deficit that exists today is a fake number,” says Hewson. “They’ve basically imposed it on themselves.”

According to Peter Reith, his former colleague Peter Costello was guilty of undisciplined arrogance, was constantly missing in action, was probably a deliberate leaker and was certainly a dope.

The criticism rings true, if somewhat delayed. It is high time that someone punctured the former treasurer’s vainglorious bubble.

Costello built long term structural problems into the budget and it’s very hard to get these vote buying gifts back when the boom drops off.

As well as the term ‘Labor’s Debt’ being a manufactured term, the budget office says more than two-thirds of the initial five percentage point decline in structural revenue was caused by the cumulative effect of the six tax cuts in a row delivered or promised by Costello… A further quarter of the five points, the office tells us, results from a decline in excise receipts, caused [mainly] by Costello’s decision to end the indexation of petrol excise in the 2001…

According to a Treasury report in 2008, between 2004 and 2007, the mining boom and a robust economy added $334 billion in windfall gains to the budget surplus. Of this, the Howard Government spent, or gave away in tax cuts, $314 billion, or 94 per cent.

In a recent study of 55 leading economies around the world, The International Monetary Fund identified four periods in Australian history when governments were engaged in "fiscal profligacy": they were in 1940, 1960 and between 2003 and 2007.

Peter Hartcher summarised the disaster: Howard spent $4 billion on his own ‘cash splash’ in his final budget, and promised another $4 billion in his election campaign, in the middle of a boom. In other words, there was no economic rationale whatsoever. On the contrary, Howard's handouts were helping to overheat the economy. These payouts were economic vandalism and political bribes designed to buy votes.”

On top of that there is no denying is that Howard/Costello sold off the entire catalogue of asset they could find: They were selling the farm bit by bit. Assets we already owned were considered assets that were now surplus to our needs. See the list here.

Well yes we could still have them, if we could afford to buy them a second time around, as with Telstra. Telstra had a return on assets of 20.8 per cent on equity of 32.1 per cent. In its last full year of public ownership, in 1996-97, it paid a dividend to the government of $4.5 billion.

The sale of 49 per cent of Telstra’s equity for $30 billion saved the government about $1.8 billion a year in interest expense – which didn’t justify the loss of 50 per cent of the dividends.

The sale of Telstra did not create wealth, it consumed wealth.

It is still a huge loss now. With profit and dividend returns of around 8 billion this year, 2015.

Just think, if John Howard hadn't sold Telstra, we would probably have an NBN now pumping billions back into government coffers with the possibility of a publicly owned renewable energy system run by Telstra doing the same.

Where is the evidence in any western country that selling the assets to the private sector has produced a more efficient service? In Australia did the commonwealth Bank become more efficient? Did the three Amigos and their imported skills give us a better Telstra? Did the sale of water resources give a better model here or in the UK? The answer in every situation, and there are plenty of them, is just about a resounding NO, NO and NO.

Howard and Costello talked on principle, but acted on self-interest. There was, and still is, much crowing about paying off Labor’s debt. What they don’t crow about is the fact that retirement costs in unfunded superannuation of the Commonwealth defined benefit scheme was estimated at close to $100 billion at the time the Howard Government left office: up some $60 billion during their reign. Their answer to that one was to close the scheme to new entrants. (Although to their credit they created the Future Fund.) This information can be found in the same Hansard that Costello crowed about paying off the last of the $96 billion.

The sale of Telstra shares 1, 2 and 3 totalled $52 billion. Add the unpaid retirement costs to the sale of Telstra and you have the $96 Billion, with quite a bit left over, they supposedly paid off.

It’s difficult to find a comparison in real life other than a farmer selling all the assets that he derives income from to reduce debt. But when the debt is reduced there is no income. With no income the farm is reduced to ruin and finally the shambles that was once a productive property has to go.

Under Hawke-Keating asset sales were around $6 billion. These figures are in the dollar value of the time they were sold. It goes without saying that no government will ever have those assets to sell again.

How the figures were fiddled to hide the true state of the budget under Howard/Costello: Or how the Howard Government were selling the future to maintain the present. That is where the so called ‘generational theft’ really happened. Only it wasn’t really intergenerational it was in the here-and-now.

Thirty years ago, a higher proportion of children went to government schools, there was free tertiary education and there was massive investment in urban infrastructure without the need of tolls.

Thirty years on, the Howard Government has sold off the accumulated infrastructure assets built up since Federation. These assets cannot be used to fund future generations, so now the Government is forced to rely on higher taxes and charges.

Despite the largest asset price inflation in a century, the Government has, in effect, swapped high-yielding assets for low-yielding deposits with the Reserve Bank.

A window into the private sector returns (and the income forgone to the Commonwealth) can be gauged from the Commonwealth Superannuation Scheme website, which describes how it turned a $5 million investment in airports into a 27 per cent a year return, while the money invested in term deports earned 4.7 per cent.

Who is looking after the public interest? The question was asked by the Auditor-General in 2001 in the audit of the billion-dollar sale of Commonwealth offices. The answer, given by the Finance Department, was that the department was not charged with the role of protecting the overall "interests of the Commonwealth".

There should be a full accounting to the Australian public of the true state of the Commonwealth budget, especially given the massive asset-sale programs. What has happened to all the money?

Such an accounting was never performed by the Howard Government. After all, it doesn't want to be seen to be selling the future to maintain the present.

Howard and Costello starved training and education making Australia over dependent on imported skills and in particular they starved infrastructure. Instead they used tax changes to pump countless billions into inflating a counterproductive housing bubble because it made the punters feel rich but it has left the economy badly distorted and the decision is still having serious social effects. When accused of inflating the bubble Howard said he had never heard of anybody complaining because the value of their house was increasing.

Well lots of people are complaining now.

Peter Costello had a formula for assessing the burden of foreign debt in 1995. It broke down as $10,000 for every man, woman and child in the country. By the time he left it was well over $30,000 for every man, woman and child in the country.

They were seduced by the revenues from a credit boom. They were so seduced by the tax revenues from the boom that they did not cool it in the period 2000-2006 when it obviously needed cooling.

Here is an example of the taxes they were collecting and that have remained in place.

According to an article in The Telegraph 2014, these are the taxes on a $639,533 house. That’s 44% of the price of a property.

On a house worth $639,533

For house with a total dwelling cost of $639,533

Total tax component — $267,879

Untaxed resource component — $371,654

Total dwelling cost — $639,533

A Centre for International Economics report found that taxes accounted for $267,879 of the average total dwelling cost of $639,533.

That happened throughout the great Costello/Howard economic miracle years and nobody even talks about it. The only answer the economic snake oil merchants in the Howard government had after creating a false boom on borrowed money was to mastermind ‘Deregulating’ the labour market; always a code word for lowering wages.

But lower wages were never the answer. Investment is. But there needs to be Government involvement even if it is in the form of long term low interest loans.

The money that should have gone into industry went into passive investment that was non-productive. Howard/Costello in their own step-fatherly way, gently took each toddling Australian industry by the hand, led its childish footsteps to the brink of the bottomless pit, and gave it a push, so ending its troubles forever.

The Intergenerational Report and life expectancy

The Intergenerational Report, which was initially meant to look into the future as much as is possible to help with economic forecasts, has been turned into a partisan report and consequently has no credibility whatsoever.

The scaremongering that the baby boomers are going to live to one-hundred, one-hundred-and-twenty and even one-hundred-and-fifty has, without a voice being raised in opposition to the opprobrium of the elderly, now become a new ‘fact’.

(The Baby Boomers
Born: 1946-1954
Coming of Age: 1963-1972
Current Population in America: 33 million

If you were a teenager in any part of the 1960’s you can call yourself, at least culturally, a baby boomer.

For a long time the Baby Boomers were defined as those born between 1945 and 1964. That would make the generation huge (in America 71 million) and encompass people who were 20 years apart in age. It didn’t compute to have those born in 1964 compared with those born in 1946. Life experiences were completely different. Attitudes, behaviours and society were vastly different. The first Boomer segment is bounded by the Vietnam War. Boomers I were in or protested the War. Boomers 2 or the Jones Generation missed the whole thing.

Boomers were largely optimistic about the potential for Australia and their own lives, the Vietnam War notwithstanding.

Baby Boomers are not the largest segment in the US. The largest cohort is actually the Generation Y, Echo Boomers or Millenniums, Born: 1977-1994, Current Population: 71 million in the US. The nearly 3.7 million American babies born in 1982 weren't special, except to their families. But in the eyes of demographers, they were categorically different from the 3.6 million Americans born in 1981. They were the first members of a new club: Generation Y.

This so-called millennial cohort is the largest generation in American history.)

No, unfortunately for baby boomers, life expectancy has not increased, except statistically – our average life-span in a graph does make it look like eventually we will all live forever...

However, most of the gains in ‘average’ life span are due to the reduction in infant mortality and those people live normal lives and pay their taxes. They don’t just arrive at pension age to be a burden on society in general and a particular burden on the treasurer and the health minister.

Using these figures is similar to taking a set of twins and saying that if one twin died at birth and the other lived to be 100 then statistically their average age at death is 50. That’s not telling the story of either of them. That’s what statistics are good at; not telling the story.

That’s why politicians love them. That’s what politicians are good at too; not telling the story.

John Quiggin, author of Zombie Economics had this to say on the subject: ‘It’s worth pointing out that, with pension age eligibility rising from 65/60 when the age pension was introduced around 1910 to 70/70 by 2035, men will have lost half of the extra retirement years gained from higher life expectancy and women the whole gain. The big problem we face is underemployment of prime-age workers, not the fact that we aren’t dying early enough.’

A concept Hockey and now Morrison seem totally unable to grasp is that life expectancy will show a significantly increase if more young people survive child birth and young adulthood, rather than just actually extending older people's lives.

Take as an example a sample in around 1900. In the sample of 10 kids – 2 die at birth 3 die before the age of 10 years and 5 live to be nearly 80 years old. Life expectancy is somewhere around 42 years. Now today take a sample of 10 kids. All survive child birth and live into their 70’s. Life expectancy is around 75. That’s an Increase of 33 years in life expectancy, even though many people were living just as long or even longer in the past. Put that in a graph and you have Hockey living to 150 years.

(In Russia the life expectancy for a male is still 60 years. Luckily the state pension kicks in at the same age. That’s the aim of the Australian Treasurer too. Kick in the pension at ‘life expectancy’ – around 150 years according to economic guru Joe Hockey.

Another statistic trotted out is that Australians are living longer because ‘in 1901, there were only 50 people in the country aged 100 or over. At last count, in 2014, there were more than 4,000.’

This is a completely meaningless figure considering that a person would have to have been in Australia from around 1800 to be an Australian living to 100 in 1901. In 1800 there were only around 5,000 Europeans in Australia. Even in 1841 there were only 178,000 people and many of those would be too young to be 100 in 1901. Very few elderly people were making the perilous journey to the antipodes. In reality the pool of people living in Australia with the opportunity to reach 100 by 1901 was very small. The biggest surprise, considering the conditions of the early settlers, is that any of them made it to 70 never mind 100.

(Data for the 19th century did not include the number of Aborigines in Australia of any age. At that time, as far as Britain was concerned, the Aborigines still did not exist as human beings, the term ‘terra nullius’ — empty land — had conveniently got rid of them.)

Since 1995, the proportion of Australia's population aged 65 years or older has gone from 12 per cent to 15 per cent.

The median age of Australians – the age at which half the population is older and half is younger – has increased from 34 years to 37 years in that period.

Now it would be interesting for those in power to suggest that they didn’t see that coming. Did they look around one day and say: ‘Oh my god where did all these oldies come from? God they smell. I never saw that coming. What are we going to do now?’ The Budget! What about the Budget?’ ‘Can we just kill ‘em??’

So, the biggest gains in life expectancy came from things like child vaccinations, improved care around births etc. Even workplace health and safety has made a big impact. To this can be added that after 1945 there have not been large percentages of the younger generations of males who have either died, or experienced life-shortening injuries or illnesses, as a result of wars.

Both Hockey and Morrison and now Health Minister Lea seem disappointed with that.

It is true that there have been very modest increased in what is known as ‘maximum life expectancy’ which only requires one person in the world to live longer than everyone else. Historical detail is too sketchy for this to be reliable and it’s not worth mentioning anyhow.

Animal studies suggest that lengthening of human lifespan could be achieved through reducing food consumption. Although calorie restriction has not been proven to extend the maximum human life span in countries where food is scarce – as in famine or near famine. Hockey didn’t seem to show any interest in this research for his welling and longevity.

So initiatives on preventing young people's deaths and reducing epidemics such as TB and other communicable diseases have a much greater statistical impact than any observation you can make on the health of older people. That's why obesity has a lesser relative impact on life expectancy than advances in medicine for children. There is even credible evidence that parents may soon outlive their obese children.

So why not target that area (reduce medicine for children or fatten them up) in the budget reforms. That’s where the increase in longevity is coming from.

A modest proposal indeed!

Lies and Claims

Once this lie is out, like so many other lies, it is hard to put it back in the box. As Vladimir Lenin said ‘A lie told often enough becomes the truth’.

Speaking about the most effective way to propagate the spread of lies and disinformation to as many people as possible, Adolf Hitler, stated that one should ‘make the lie big, make it simple, keep saying it, and eventually they will believe it.’ Does that sound familiar?

His minister for propaganda Goebbels made a profound statement regarding lying, an activity at which he excelled. He claimed that ‘the bigger the lie, the more it will be believed.’

Goebbels well understood that most people are prone to a condition that is a state of psychological denial. No matter how insane or destructive a lie that they have accepted may be, if the lie is deeply enough embedded within a belief system, people will be loath to challenge it, for doing so would require them to step out of a defined comfort zone and begin to challenge their belief systems themselves. Relatively few people ever venture outside of this comfort zone.

No matter that those actions are thinly disguised behind Big Lies repeated over and over by agents and tools of the wealthy – by the newspapers and TV stations owned by the rich, by a political process and Supreme Court controlled by the rich, by sound bites and legislation pushed by rich politicians – that taxes are unfair, that corporations are people, that the wealthiest among us have no obligation to assist the poorest, that government exists to protect wealth rather than its citizens, and that the surest way to help the poor is to advance the purpose and cause of the wealthy.

How can we still be talking about trickle-down economics when so little wealth ever actually trickles down?

This is another example of the lies that cannot even be explained even by creative accounting. If the people making the claim don’t know that it is Comparing apples with oranges they really have no business being let loose amongst the community.

Nimble, agile and innovative, Turnbull pays polluters $557m not to pollute. Maybe police are trialling paying crims not to rob people: And paying people smugglers not to smuggle – then again...

Check out Fact Check: Was the cost of cutting emissions 100 times greater under Labor?

The Claim about Carbon Reductions

Environment Minister Greg Hunt said in Question Time on October 20 that the Government was reducing emissions and bringing down electricity prices all at the same time.

"The second thing is, of course, that the first emissions reduction fund auction was a spectacular success - 47 million tonnes, $13.95 per tonne of abatement and approximately 1 per cent of the more than $1,300 per tonne cost of abatement under Labor's failed scheme," Mr Hunt said.

Roger Dargaville, deputy director of the University of Melbourne's Melbourne Energy Institute said the Government was "comparing apples and oranges, it is not the same thing at all".

"The price on carbon applied to all emissions but it was a revenue neutral tax, in that all the revenue is returned to energy users in the form of tax reform and also to compensate the high emitters and trade-exposed emitters," he said.

Individual taxpayers were compensated for increased prices resulting from the carbon tax by $7 billion in tax cuts applied by raising the tax free threshold from $6,000 to $18,200, which is still in place.

VIDEO: Watch John Barron present the facts. (ABC News)

"The $1,300 a tonne is nonsense because it didn't cost anyone that amount of money; the money was redistributed throughout the economy," he said.

"Whereas the $660 million that has been spent so far on direct action is a net cost to the government with no compensation, no compensating revenue out of it. So it's only a cost to the federal budget, not a benefit."

Dr MacGill said Labor's carbon tax was a revenue raiser for taxpayers.

"Taxpayers were also paying that price through increased electricity prices and so on," he said.

"But you can't compare a direct taxpayer expenditure to a price which is actually raising revenue."

Ian MacGill, joint director, engineering for the University of NSW Centre for Energy and Environmental Markets, told Fact Check that the ERF involved "highly abstract calculations" of abatement and it may or may not genuinely reduce emissions.

"So the $13.95 a tonne for 47 million tonnes that's claimed, there's no way of being sure that genuinely 47 million tonnes less went to the atmosphere than otherwise would have happened, due to the ERF," he said.

Dr Burke said it was hard to calculate the cost of emissions reductions from direct action.

"Imagine that first round of auctions bought nothing, it's just paying for permits for trees which were standing on this abandoned agricultural land anyway, and so paying companies to not cut down those trees, to not follow through on a threat to cut down the trees," he said.

"If actually Direct Action has bought nothing then the cost per unit of abatement is mathematical infinity."

The verdict

The experts said there was a much greater issue with Mr Hunt's claim than the concerns with the numbers.

They said government revenue raised by the carbon price did not represent the cost of that method of reducing emissions.

In addition, comparing the carbon price, which raised government revenue, with the ERF, which is a government expense, didn't make sense because the money from the carbon price was distributed back into the economy.

Mr Hunt's comparison of the two schemes is untenable.

On more-or-less the same issue, with a slightly different bent, in 20 July 2015 Alan Jones stated on Q&A that:

“Eighty per cent of Australian energy comes from coal, coal-fired power, and it’s about $79 a kilowatt hour. Wind power is about $1,502 a kilowatt hour. That is unaffordable. If you take that power and feed it into the grid, then every person watching this program has electricity bills going through the roof.”

The statement by Jones that wind power was unaffordable at $1,502 a kilowatt hour has been the subject of a fact-checking article in the Conversation and a Media Watch report on ABC TV.

On Thursday the ABC posted a correction which said Jones had apologised for the error. The ABC’s correction said Jones had pointed to the Conversation analysis, which found the real cost was $150 per megawatt hour. Jones had also erred in using kilowatts instead of megawatts.

Jones got his ‘facts’ from the Australian newspaper and they blamed a ‘stray’ decimal point for the error.

However, the 'stray' decimal point appears to have been very selective, moving for wind and solar but staying put for coal. And the other problem is that this has now become a new factoid to be quoted forever more. It’s another case of a lie travelling the world while the truth is still putting its trousers on.

What’s even worse nobody on the panel on the night had the facts. Even Mark Butler Australian Labor Party representative didn't have his facts on wind power ready to counter Jones.

Also, his claim that renewable energy is having a large impact on residential electricity bills also runs counter to modelling commissioned by the government.

As Lenore Taylor wrote from Paris  ‘The smart investment will be in clean technologies, and if Turnbull wants to be active and nimble and innovative and get a slice of it, he needs a credible, clear, transparent domestic climate policy, and quickly. That’s exactly what Jie Zhang, from Chinese firm Hareon Solar, told me he is looking for when deciding whether to make a billion dollar investment in Australia next year.’

Partisanship

The most deluded people of all are those who choose to ignore what they actually know to be true and factual. But they are blinded by partisanship.

We are in a period of hyper-partisanship which is akin to gang warfare. There is no place for a logical argument anymore.

The shift to the extreme right seemed to gain momentum during the Howard years. The late Malcolm Fraser, former Liberal Prime Minister was so dismayed that he quit the Liberal Party, leaving the Liberals struggling to dispel criticism that it has moved too far to the right.

It also allows them to continue with their political ideology of cutting taxes for the wealthy and cutting spending on the sick, the poor and in particular the elderly – who are often sick, poor and elderly.

Who hasn’t heard of ‘Labor’s debt’?

We heard of Labor’s debt from Howard and Costello and as follow-on from those years ‘debt and deficit’ became a crescendo under Abbott and Hockey and is echoed by everyone on that side of politics. It’s still their fall-back slogan.

A very quick rundown of the most recent years since the 1970’s will show that the Whitlam Labor Government while being dysfunctional was not a big spending government and did not run up debt. The Fraser Coalition with Howard as treasurer ran big deficits which were initially paid off by the Hawk government but when they fell on economic ‘bad times’ (the recession we had to have) they ran-up the deficit that we have all heard of ad nauseam.

Howard and Costello paid it down by selling assets.  If the Hawk/Keating had sold all those assets that Howard/Costello sold there would have been no deficit either.

But it will be evident later in the article that a budget surplus is not as important as we are all led to believe. We were in fact led by the noses by the Coalition and a compliant media before the last election when Rudd was replaced by Abbott. We are still being by the nose now.

Yet, for no convincing macroeconomic reason, Julia Gillard and Wayne Swan and Kevin Rudd set themselves up to fail by asking the Australian public to judge their financial management skills on how quickly they could bring the budget to black. That was because the media had only one hymn book to sing from; the ‘debt and deficit’ hymn book.

The Coalition can’t believe it got away with its counterfactual argument, and the lies. The misfortune is Rudd thought every voter was as smart as he was and understood economics whereas Abbott knew most voters were as dumb as he was and didn’t understand anything about economics.

Now they are trying, successfully it seems, to pull the wool over our eyes again even though a new study destroys the theory that tax cuts spur growth it’s always tax-cuts again for the wealthy while taking from the poor.

Now daily there is new story in the media about how the electorate is coming around to the GST (because they are being barraged with propaganda) but what the masses don’t realise is that increasing the GST and cutting services and pensions and unemployment benefits are really just a way of freeing up cash for more tax cuts for the wealthy.

They have a roster for putting it out there, a little bit from Government Ministers such as the Minister for Social Services the dreadful Christian Porter, a bit from journalists such as Peter Martin and people like John Daly of the Grattan Institute who is fanatical about getting tax cuts for high income earners by having retirees pay for them.

They then wangle a positive mention on Insiders and Q & A not to mention the conservative media.

It is impossible to keep up with the daily barrage. 

It always comes down to the same thing though: tax cuts for the wealthy; wage and services cuts for the rest of us.

The so-called debate is being driven by an élite group who continuously try to deceive us by insisting that their interests are those of the country as a whole. They love the term ‘trickle down economics’ whereas in truth the money is trickling up and sometimes it’s not just a trickle it’s a tsunami.

If they could just raise the GST every year without political repercussions that’s all they would do. They keep telling us everything is on the table even though the only thing on the table is their free lunch.

If you accept one basic premise – that wealth is finite – then all the financial, economic and social upheaval in our country starts to make sense. There isn't enough to go around when one sector gets a lock-tight grip on the purse and the purse strings. Once that happens, with so little left on the table, those of us who aren't rich find ourselves battling each other for an ever-dwindling share of the pie. Programs compete against programs. The needy compete with the needy. Infants battle the elderly and the poor for nutrition allocations. Recovering alcoholics challenge the homeless and disabled for shelter dollars.

Budget 2015 sliced and diced: Where every dollar comes from, and how it's spent.

Morrison and the Donkey

Hockey was followed by Scott Morrison who claims that eight out of ten income tax payers fund our total welfare payments. This is a poor attempt at that horrible world of cherry-picked political comparisons. His implication being that every taxpayer is more-or-less supporting someone else. The comparison he didn’t make is that it takes thirty out of thirty taxpayers to support him and not just now but forever. Here is a simple graph (on the internet) of what comes in and what goes out

Morrison’s ideological blinkered blindness is like the story of the farmer who bought a donkey and when he got it home it refused to go into the little shack, where it was to be housed from the weather, because its ears touched the lintel above the door opening. A neighbour suggested that the farmer could dig a little of the dirt floor at the bottom of the entrance to which the farmer replied ‘don’t be stupid, can’t you see it’s his ears not his legs that won’t go in’.

It’s a suitable analogy although Morrison is more like the ass than the farmer.

Immediately, the Coalition started by cutting welfare and now, like the farmer with the ass, Treasurer Scott Morrison is going for slogans like ‘We have a spending problem, not a revenue problem’– a claim that's not just incorrect, but also sounds worryingly like the sorts of casually wrong things that previous Treasurer Joe Hockey was blithely spouting as he got the country into the current low-growth-high-unemployment situation.

If we accept former Treasury Secretary Ken Henry’s assessment that both revenue and spending should, over a given cycle, be around 25% of GDP then it is clear both areas need to be addressed. Attacking spending in isolation will lead to a contraction which is exactly what we are experiencing now and exactly what we don’t need.

But rusted-on Liberal ideology limits Morrison’s choices. If he had to solve the riddle of the donkey its ears would be trimmed. They would rather limit wage growth and cut back on welfare: the opposite of what they should be doing. Their only solution is lower taxes for their corporate friends.

It’s a ‘we can only afford to buy a new car if we stop buying petrol now’ type of logic, but it is what the Abbott and Turnbull governments have been saying. They argue that a budget revamp can only possibly come from the pockets of the lowest-paid.

Whereas, higher wages would mean higher tax revenue, greater demand for goods and services, higher GDP which translates to a higher living standard for all. Additional demand compensates companies for the extra tax they may, or may not, pay.

Gainful employment is our right, a thing born in us at birth, a thing no more to be doled out to us or withheld from us than the right to life itself.

The economic structure of the world has been organized and managed so that the poor are mostly powerless. A study prepared by Empirica Research and the Harvard Business School finds us oblivious to the truth that the best-off 20 per cent have 60 per cent of the wealth and the worst-off 20 per cent a mere 1 per cent.

So if they have no resources and their children can’t be eaten what are they good for? Cheap labour!

‘If we’re honest, most of us would accept that a bad boss is a little bit like a bad father or a bad husband … you find that he tends to do more good than harm. He might be a bad boss but at least he’s employing someone while he is in fact a boss’. Tony Abbott.

Sunday Penalty Rates

Under Prime Minister Malcolm Turnbull one of the first places the party headed was to slash Sunday penalty rates. Every objection by the poor is passed off as the ‘politics of envy’.

The reasoning for slashing penalty rates was that the Productivity Commission backed a cut to Sunday penalty rates in a draft report.

This is supposedly based on research conducted by the Restaurant and Catering Association which suggests around 40,000 extra Sunday jobs could be created if penalty rates were reduced.

Dr Patrick Carvalho a research fellow at the Centre for Independent Studies in the article Australia's unemployed youth are getting priced out of the market added to the debate saying:

For instance, Sunday pay rates starting from $33 an hour for a casual entry-level job in a fast-food restaurant might explain why it is so hard for long-term dole recipients to be given a fair chance to enter the workforce. Such high pay rates act as a strong disincentive for employers to create job positions for low-skilled, long-term unemployed youth.

(No mention of young people getting a real Monday to Friday job, just weekend work in a fast-food restaurant.)

This has been on the to-do list of business groups forever and has nothing to do with creating jobs but is hidden under such idioms as Turnbull’s ‘flexible seven-day economy’.

There is a flexible seven-day-economy in countries like Thailand and the Philippines and it hasn’t led to any great prosperity.

Is there any better example of the decrepit state of business leadership in this country than the response of the Business Council of Australia to the government’s innovationpolicy?

Appearing at the AFR’s workplace and productivity summit, the head of the BCA, Catherine Livingstone, responded to the $1.1bn innovation statement by arguing for greater labour market flexibility, saying “we have to be able to talk about whether the current workplace relations system in Australia is able to accommodate the changes we are talking about”.

What else would she say?

Youth unemployment is not a problem to be fixed with labour flexibility says Greg Jericho.

The BCA responds to every issue by suggesting more labour flexibility is the answer. Were someone from the BCA to be a judge on The Great Australian Bake Off, they would suggest the sponge cake was beautifully baked, the icing elegantly done, but it really lacked a dollop of labour force flexibility to bring out the taste.

But rather than suggesting it is about charging lower wages for workers or being able to fire workers with greater ease, those who favour greater labour market flexibility often couch it in terms of being for the benefit of workers, especially youth workers.

The productivity commission’s draft report on workplace relations, after admitting there was no real evidence of a link between labour market flexibility and improved productivity, noted “there are some potentially concerning trends. In particular, youth unemployment is rising, and by more than the growth in the unemployment rates of prime-aged people in the labour market”.

Back in June, Catherine Livingstone also asserted that youth unemployment was at a “crisis”.

Yes, the call for labour market flexibility is really just Helen Lovejoy asking “won’t somebody think of the children?”

But the odd thing is, youth employment is now actually doing quite well – for the past nine months it’s been growing faster than the employment of prime-aged workers:

Well naturally if wages are cut in half twice as many people can theoretically be employed, for as long as they manage to live, using the same pool of money and the same pool of food. That applies to every industry and service. Twice as many police, soldiers, teachers, public service members and business executives even politicians. However, everything would need to be half the price for them to exist (except for politicians and the rich) and so how would anybody benefit in practice?

However, by cutting only the wages of the already under-paid, supposedly more of them will be employed.

The fact is employers would like their employees to be cheaper but they would like everyone else's employees to continue to be well paid. That way the general public still has spending money but they can make more profit by underpaying their employees.

The end result would be that the high level of competition in the hospitality industry would mean any reduction in costs would be passed on to consumers so virtually nobody would be better off, except customers by a dollar or two, but the employees would be much worse off.

In the meantime, if a business can't make money opening on Sunday, the obvious answer is close on Sunday. The trouble is even a small retail shop will be paying $2,000.00 a week in rent even if they stay closed all week. Plus there are many other fixed expenses. Nobody is attacking these expenses.

The fact that people expect services to be provided on the weekend has no bearing on the question of how employees should be compensated for providing that service.

Nobody is worried about the many thousands of workers who don't receive even the legal base pay rates for normal hours, let alone weekend shifts. Skip over them and go straight for the weekend workers and tell them that they are living in the past and that now everyone is entitles to a cheap cappuccino on a Sunday.

The people making those suggestions don’t themselves work on weekends.

Of course according to the political experts nobody will be worse off and in fact everyone will be better off. Everyone will be rich.

You Cannot Have Rich People Unless There Are Poor People

But you cannot have rich people unless there are poor people, and preferably lots of them.

John Ruskin’s 1860 Essay from the Cornhill Magazine 1860 reprinted as ‘Unto This Last’ in 1862 is to be found the best and simplest illustration of the relations of master and servant under the ‘laissez faire’ system of economy:

Ruskin examines the concept of ‘wealth’ – that you can only have rich people if you have poor people. He points out that wealth has two components: material possessions and power. Wealth can consist of how much food, housing, clothing, etc., a person owns. But it is only possible to have an abundance of these if someone will produce them cheaply. The example that he uses is to consider a wealthy landowner. If the other people in his area are all well-off independent farmers, he will have a problem finding workers. If, on the other hand, they are impoverished and landless, he will have no trouble at all getting them to do just about anything he wishes for little or no reward.

The general situation is that if all citizens have a certain level of prosperity it will become increasingly impossible for the wealthy to hire others to work; hence their wealth becomes meaningless as an instrument of power. It becomes clear that the wealthy have a clear and vested interest in maintaining a certain number of people in absolute poverty.

The next recent big achievement by the Coalition was that tax paid by companies controlled by Australia's richest business people, including Gina Rinehart, James Packer and Lindsay Fox, will remain secret after they succeeded in exempting private companies from new tax disclosure requirements.

According to a leaked list from 2011, grandfathered companies include scandal-plagued 7-Eleven stores, Ramsay Healthcare – formerly owned by the deceased Liberal Party donor Paul Ramsay, Red Lea Chickens, swimwear brand Seafolly, Mr Triguboff's Meriton Apartments and Mr Stokes' private investment vehicle Australian Capital Equity.

The 1500 companies on the list do not have to submit audited annual financial accounts,  
including tax contributions, to the corporate regulator the Australian Securities and Investment Commission (ASIC).

This was despite a recent Senate hearing scrutinising the bill to exempt private companies from disclosure rules heard that one in five privately-owned companies with revenues in excess of $100 million paid no tax in 2014.

The alarming figure was revealed by an Australian Tax Office official.

Even Dick Smith savages Malcolm Turnbull for shielding the rich from tax transparency.

One of the reasons promulgated was that if the amount of tax they paid was know they would all be kidnapped and held hostage, until presumably they paid their fair share of tax.

It turns out the Senate was successfully lobbied to support corporate tax secrecy laws by a ‘families institute’ that represented no families. The Family Office Institute Australia, whose submission informed large parts of a Senate report recommending the government shield privately owned companies from increased transparency, actually has no members.

Hidden vested interests were toying with our democracy.

The practise is known as "astroturfing" – or the use of artificial grassroots to create an impression of widespread support for a particular political agenda.

Joe Hockey's tax disclosure wind-back is a 'reform' nobody asked for: Ikea, the Future Fund, Lend Lease, AMP and Macquarie Group are among dozens of Australian companies using elaborate, legal structures to cut their tax bills, leaked documents reveal.

There was a compromise deal done in the Senate which was supported by the Greens, 600 major Australian companies can still keep their tax details secret.

There were 579 local and foreign-based companies that paid no tax in 2013-14 which had a combined turnover of $405.9 billion and a taxable income of $4 billion.

The Turnbull government has been urged to shift its focus to the "top end of town" to combat the worsening deficit amid evidence billions of dollars are being lost to corporate tax avoidance.

The data shows technology giant Apple had total income of about $6.1 billion, but only $247 million of that was taxable income.

The company's tax payment was the largest of the multinational tech giants at just over $74 million, but that only equates to around 1 per cent of its total income in 2013-14.

Competitor Microsoft paid around $31 million, 5 per cent of its total income of $568 million, while Google paid just $9 million in tax, around 3 per cent of its total income of close to $358 million.

Cleaning company Spotless Group made around $2.2 billion, but paid no tax.

How much tax major corporations pay

The ATO has identified the major firms that paid no income tax in the 2013-14 financial year. See who's paying what.

Shopping centre and real estate owner Stockland had income in 2013-14 of around $1.3 billion, but also paid no tax.

Eighteen of 70 tech companies on ATO transparency list paid no tax

Some of the biggest tech companies in the world are paying little or no tax in Australia, an analysis of the Tax Office's data release shows.

Apple, Google, Microsoft, Hewlett Packard, and Cisco Systems are only generating an average gross profit of about 5.5 per cent compared to the average of their parent groups which clock profits closer to 24 per cent rates, the analysis shows.

Tax Commissioner Chris Jordan released the tax details of 1539 corporate entities – 985 of which are foreign-owned, and 554 of which are Australian public entities. There were 579 local and foreign-based companies that paid no tax in 2013-14.

A team of tax researchers from the UTS accounting discipline, Dr Brett Govendir, Associate Professor Roman Lanis, and PhD candidate, Ross McClure, have analysed the technology companies included in the ATO tax transparency disclosures.

They found that of the 70 technology companies on the ATO list, 18 of them, including MYOB, NBN Co, iSelect, Verizon, and Acer Computers – are not paying any tax at all. However, this may be because they are making losses.

These are the wonderful companies that Turnbull wants to model our future economy on.

Tax paid as percentage of total income

But at the same time as leading corporate lights are defending practices that allow them to pay very little actual tax, the Business Council of Australia (Chevron, BHP and Rio are all members) and other groups are pressing for a corporate tax cut as part of what policymakers like to call tax reform. “Reform” sounds like it really has to be a positive thing although all they mean is they don’t want to pay any tax.)

No one says, “Sure, we can manage a company tax cut to boost investment just as soon as major corporations start paying a reasonable amount of the tax they are already supposed to pay – but not until then.”

Until then it’s the aged and infirm that can prop up the ailing budget.

It might be time to rewrite Australia's budget script

There’s the perfect opening line for the new script: "Australia: we have a revenue problem."

Now all we need is a politician willing enough to utter those fateful words. He or she could be hard to find amongst the current bunch of cowardly practitioners.

It certainly won't be PM Turnbull who has been nowhere to be seen since Morrison bought out his MYEFO report. It's plain to see that when the going gets tough, Malcom runs.

The ideal of the wise, benevolent reformer who would calmly canvass options and then lead a determined program of change has evaporated.

In its place is just another politician, operating from fear or vested interests.

It always does seem to be the poor who have to fund the rich, either through cuts or increases in sales tax.

In 1979 the top tax rate in Australia was 67%, in the UK 86% and around the same in the US. Within 15 years of conservative rule in each of those countries it was brought down to the all-time low of 40%, of which most don't pay due to the legal loopholes inserted within the tax laws.

Check out the full brief on the new laws here.

SURPLUS YEARS ARE RARE

We are all being bombarded with the need for a government surplus. However, surplus years have been few and far between. Aside from the early years of balanced budgets (before Canberra existed!), the only surplus budget outcomes have been in the following years:

  • 1933, 1934 and 1936 resulting from the depression austerity plan under Joe Lyons (UAP). Deficit spending to stimulate the economy was not an option because foreign credit markets refused to lend to Australian governments following the default and restructure on the entire stock of domestically held government bonds in 1931. The government had no option but to balance the budget by imposing austerity measures including savage cuts to wages and spending
  • 1949  under Chifley (Labor)
  • 1988, 1989, 1990 and 1991 under Hawke/Keating, in the late 1980s boom prior to the deficit spending in the 1990-1991 recession
  • 1998, 1999, 2000 and 2001 under Howard/Costello, in the ‘dot-com’ boom prior to the impact of the ‘tech wreck’ slowdown
  • 2003 through to 2008 under Howard/Costello (although Labor under Kevin Rudd won the election during the 2008 fiscal year), in the 2000s mining/credit boom prior to the ‘global financial crisis’.


RUNNING UP AND PAYING OFF GOVERNMENT DEBT

The recent Rudd/Gillard deficits were similar in scale to the Fraser, Hawke and Keating deficit years. Contrary to popular myth the Whitlam era was not one of high deficits or high debt. The only significant deficit was in 1975, with the budget crisis triggering the controversial sacking of the Whitlam government by Governor General Sir John Kerr on behalf of the Queen.

  • The current level of Commonwealth government debt relative to national income is modest, and is lower than almost any other time since World War 1. It is also lower than almost all other countries in the world today. The only times it was lower than today’s levels was in the late 1960s to mid-1970s, and in the late 1980s.
  • Current interest burden on Commonwealth debt (as a % of national income and also as a % of government receipts) is also very modest, and is lower than almost any other time since before World War 1. World War funding was bi-partisan.

What Is the Debt Reality?

Despite the thunderous negative rhetoric Labor left the Coalition an economy that was the best performing in the OECD.

The Libs keep saying the problem is Labor’s unrestrained spending but, in fact, it’s almost all on the tax side. In a post-budget speech on May 20 2010, Treasury secretary Martin Parkinson produced a chart showing that every budget over the 12 years from June 1998 loosened fiscal policy, that is, increased spending and decreased tax revenue. 

Of those, 10 budgets were delivered by the Coalition and included eight years of income tax cuts.  

Economic comparisons are useless without context:

Back to that $96 billion ‘Labor debt’ inherited by the Howard government in 1996 - which actually comprised $40 billion of Fraser government debt that carried through the Hawke-Keating years taking the true level of ‘Labor debt’ in 1996 to $56 billion. Bringing down that debt wasn't all about constrained spending and higher taxes, in fact neither of those things were characteristics of the Howard-Costello years. Government asset sales between 1996 and 2007 worth $72 billion wiped the net debt out entirely with $16 billion to spare.

Labor or Liberal Government Debt?

The above figures seem a bit dodgy (they have been calculated this way: When John Howard was Treasurer, net Government debt rose at a steady pace, hitting 7.5% of GDP when Fraser lost the 1983 election.  In 1996 dollar terms, 7.5% of GDP is around $40 billion which is used to calculate the real level of net government debt ‘inherited’ by the Hawke Government when it won the 1983 election.)

Nobody ever checks to see what ‘Labor’s debt’ was actually spent on but anybody would think it was spent on an election campaign. Maybe some of it was spent on infrastructure. There is never a debate about what the debt is spent on, and whether it will maximise the productive capacity of the economy in the future.

Under Hawke-Keating asset sales were around $6 billion. These figures are in the dollar value of the time they were sold. It goes without saying that no government will ever have those assets to sell again.

Is Paying Down Government Debt Even a Good Thing?

Government debt has been paid down only twice since Federation once by Labor and once by the Liberals.

In the case of Howard/Costello it was probably not a good thing because it was done mostly by selling income producing asset and doing little or no infrastructure with the proceeds during their watch. Although with higher that average interest rates and an economic boom, it probably seemed like a good idea at the time. And it would have been a good thing if the money had gone into developing infrastructure instead of into tax cuts and other sweeteners to insure their re-election. The little extra money people get in the pay-packets was just squandered on mostly imported unnecessary items that further upset the balance of trade.

(Appropriate infrastructure and education is vital for manufacturing: Australia lies well below NZ in the index of Global Competitiveness: And the sane in the ease of doing business index.)

On top of that the privatisation of assets (often acquired through the creation of debt, and at a loss to taxpayers) caused the build-up of vast mountains of so called ‘private debt’ funded by money from outside Australia.

The government then reverted to variations on ‘austerity’ and wage repression in the form of ‘Work Choices’ – which contracted incomes and consequently spending. Then they were thrown out of office.

Howard and Costello governed during a boom; Rudd, Gillard and Swan during the worst developed economy recession since the 30s. Howard had Costello left a structural deficit.  Tax cuts that were not funded,

Lazy Balance Sheet  

If Australia was a company its national debt would be labelled a very ‘lazy balance sheet’ and the CEO and Chairman would be thrown out by shareholders for not borrowing enough to invest for future growth!

Australia has always been a country in which the opportunities for growth and investment have far exceeded the local savings pool available to fund its development, and so it has always had to import people and capital, in the form of equity and debt.

Many people liken a country to a household, where it is prudent to have no debt, or at least to pay off debts as quickly as possible. However a country is more like a company than a household. In a household, the breadwinner(s) stop generating income and have to draw down their accumulated savings during decades of retirement. Companies and countries can exist forever (in theory anyway) and they can (and probably should) carry debt as long as the cost of debt (interest) is lower than the additional income generated from the investments funded by that debt.

So despite all the talk about leaving a debt for our children to pay off; it is far better to leave them infrastructure with debt than to leave them infrastructure free and debt free. Inflation reduces the burden of debt into the future in the same way we all wish we had gone into debt to buy real-estate in the sixties, seventies or eighties.

The so-called ‘intergenerational theft’ has been visited on this generation of retirees and not on posterity as is the claim.

Think of the Goldfields Pipeline – Perth to Kalgoorlie – at a cost of around £2.5 million. O’Connor, the engineer, was subjected to prolonged criticism by members of the press and also many members of the Western Australian Parliament over the cost of the scheme and he committed suicide as a result, less than a year before it was completed.

Today many houses, in Perth, are valued at more than the cost of that great infrastructure that was such a ‘waste of public money’ and it is still providing water to the towns along the way to Kalgoorlie which still produces about 800,000 ounces of gold a year. The pipeline continues to operate today, supplying water to over 100,000 people in over 33,000 households as well as mines, farms and other enterprises.

Even if the debt had not been repaid only the interest it would not be ‘intergenerational theft’. We have benefited from them rather than the other way around.

Governments generally do not reduce debt levels by ‘paying off debt’ per se, but instead the size of the economy grows and that reduces the ratio of debt to national income. The two occasions when governments did actually pay off debt with government surpluses were in the 1930s depression (under Labor) and in the late 1990s to 2000s (under Liberal).

Foreign Debt

So if ‘debt and deficit’ is not the problem and if it has in fact doubled under Hockey and Abbott despite the pomposity; is there a problem?

Yes, the very thing nobody is mentioning; the balance of trade; External debt, or net foreign debt;

No manufacturing and no money for financing business innovation in Australia is part of the real problem.

As the Graph shows while government debt was going down (the little red line) private debt or ‘foreign debt’ was going up dramatically under Howard.

Howard said before the 1996 election that he was concerned about the net foreign debt because:

‘This idea that foreign debt is in some way removed from and remote from the daily lives of Australians is completely false.

If it weren’t for the level of foreign debt, interest rates in this country would be much lower.

And every Australian today who owes money on his or her home is paying a higher interest rate than would otherwise be the case because of the size of our foreign debt.’

And again at his campaign launch speech in February 1996, Mr Howard said this was the most important indicator of a government’s economic credibility.

 ‘We now owe the rest of the world $180,000 million. Nothing my friends symbolises absolutely and comprehensively more than that disgraceful figure, the total failure of Labor’s economic management over the last 13 years.’

This is a very good article on the trade-deficit and it shows that nothing has changed at the end of 2015. The trade deficit for the September quarter came in at over $7 billion. It shows that the deficit hasn’t plunged this low since 2008.

John Howard and Costello Knew the Problem

All through the Howard years, despite his rampant rhetoric about the net foreign debt of 180 billion (which he liked to call one-hundred-and-eighty-thousand-million because it sounded bigger) that he was about to inherit from Labor (including the ‘truck stunt’ where he travelled with a large truck with the amount written on the side.), the net foreign debt went up and up, heading towards a trillion dollars and with no infrastructure and no industry to show for it.

In another interview he said ‘I can promise you that we will follow policies which will, over a period of time, bring down the foreign debt . . . our first priority in Government economically will be to tackle the current account deficit.’ - John Howard, Doorstop interview, Debt Truck Launch, 20 September 1995.

The Current Account Deficit

 Terms of Trade and The Current Account Deficit are measures of a country's trade in which the value of goods and services it imports exceeds the value of goods and services it exports. It was $11.9 billion at the end of September 2003, an increase of 112.5 per cent on the September 1995 level – Australian Bureau of Statistics, ABS, Time Series Spreadsheets (Balance of Payments and Investment Position, Australia 5302.0, Reserve Bank of Australia (H) Bulletin, Current Account).

So despite the speech-making, a decade after Howard took office Australia's foreign debt had not fallen. It hadn’t stayed the same, increased at the rate of inflation, or even increased at the pace of Australia’s economic growth.

It had blown out to three times the level it was when John Howard took responsibility for the economy.

Export growth had halved from 10.8 per cent under Labor between 1983 and 1996, to 5.3 per cent since John Howard took office.

After ten years, John Howard became too arrogant to even acknowledge the problem, let alone work on the solution. Everybody said the economy was going ‘gangbusters’ because house prices were going up. Well it wasn’t. When a country is losing two thousand million dollars a month and has been doing that for the entire term of office of the Howard government then we are listening to spin not living in reality.

National debt went from a third of GDP in 1996 to more than half when Howard left office in 2007.

We were told that a current account deficit wasn’t a problem because most of it was going into capital goods to increase the productive capacity of the economy. In plain speak; we were buying tools and machinery to manufacture the thing we should be manufacturing. Well we could believe that for one year maybe two years maybe even five years but not twelve years.

If it had been going into capital goods to increase the productive capacity of the economy we would be the biggest industrial nation on the planet and we wouldn’t be importing, we would be manufacturing and exporting. It is quite obvious that most of it was going into housing and consumer goods that we no longer manufactured.

The IMF just pointed out  (October 2015) that Australian infrastructure is under pressure and Australia has an "infrastructure deficit" of about $80 billion. A boost in infrastructure spending funded by borrowing would have short and long-run benefits "with little effect" on the debt-to-GDP ratio.

The next best solution is for a country that's running a current account deficit to wisely invest the foreign capital into building infrastructure, such as roads, education of its workers, and ports to boost international trade.

This, however, would have required huge investment in industry, research and development, human capital and infrastructure, urban and freight rail networks as well as ports, on a scale to dwarf what we saw during the Howard /Costello years, to pull ourselves out of the hole.

None of it happened that way.

All the money for increased housing values came from outside of Australia until we were one of the biggest borrowers in the world and with a negative balance of trade.

Instead of investment in business all the money was going into housing. However, unless a person sells their family home and moves to another country there is no real value in having every property valued at more than twice what they should be. It’s just wasted money tied up in realestate.

Owning an expensive property in Australia is of little or no financial benefit because all homes are equally expensive. (There are of course ‘mansions’ for the super-rich but they are in every country.)  It only means higher rates and expenses and more of worker’s earnings poured into the purchase of the family home. It also starves industry of investment.

If in a particular country all house blocks are worth $1m and in another country they are only worth $10.00 the people in the former country are no richer in real terms unless they sell the property and move to the latter country. Or of course they could live under a bridge in their own country.

When there is more money to be made on passive investments, like investing in housing, who is going to build a factory and go down the risky road of manufacturing, without some government incentives?

For industry to compete globally there needs to be Government involvement even if it is in the form of long term low interest loans that do not require payments until the company makes profit. We need to build factories that are two kilometres long and half a kilometre wide if we are to be competitive.

Because venture capital is hard to come by businessmen tilt their activities toward short-term projects and the general business mentality comes to view speculation as likely to produce safer gains than investment in projects such as manufacturing that have a long growth period.

The Dutch had to learn these lessons the hard way in the 1970s when a currency spike associated with North Sea gas made their manufacturing sector uncompetitive.  

‘Only the Norwegians understood the lessons of these dismal but instructive experiences. They took a public stake in their oil assets and imposed a resource rent tax, not at 20 or 40 per cent but at 76 per cent. They also established a sovereign wealth fund to quarantine exchange rate effects and invest in their research and innovation infrastructure. Clearly, these measures will enhance Norway’s capacity to diversify its industrial structure as the oil price plummets.’

Obviously there were no ‘axe the mining tax’ slogans at work there.

The investment in manufacturing cannot be left to private enterprise. Nobody is going to mortgage their house and start a shipbuilding industry. And unfortunately lowering corporate taxes doesn’t necessarily lead to investment.

Businesses are borrowing more, but they’re investing less.  

Why would it be any different with taxes in that case? If businesses receive tax breaks, who’s to say they won’t hoard that extra cash?

What’s more, if big business just funnels extra profits to shareholders, there’s no reason to lower taxes. Any reduction in corporate tax rates should aim to raise investment levels. Not beef up corporate piggy banks.

It is absolutely essential that we rebuild our manufacturing industry and create decent jobs.

Instead of slowly working our way to trillions in debt with nothing to show for it, it would have been much better if we had borrowed the money to begin with. Then we could build our lagging infrastructure and rebuild our manufacturing industry. We could buy our way into business; we could buy the technology – the latest Japanese or German machine-tools.

Why Is Government Debt Better Than Private Debt for Major Works?

Let’s say that there is an infrastructure project such as a section of highway that will cost around $5 billion. The project is contracted out and funded by the private contractor. The money has to be borrowed and it will come from the internationally banking system because it is not available in Australia. The ledger shows no increase in government debt but the country has nevertheless incurred the debt. It is necessary to look at foreign debt to find it but it seems nobody looks at that any more.

If in a fiscal year there is a domestic budget surplus of $5 billion to boast about but money has been borrowed to do a project on behalf of the country in general; it just has not been borrowed in the name of the government. But it is owed by the country in exactly the same way. And the government could have borrowed at the best interest rate.

Super funds have done little more with our savings than blow up a realestate bubble in the major cities, much of which could evaporate overnight, especially when the OECD stated that Australian house prices are more overvalued than in any other country.

Super funds do also invest in overseas shares on behalf of their clients and that has the effect of reducing our gross overseas debt.

Net Liability Position with the Rest of the World

The IMF's annual assessment of the Australian economy, released in October 2015 had this to say: ‘Throughout its history Australia has been a capital importer with an overall net liability position with the rest of the world. This reflects very high private investment relative to a savings rate that is already high by international standards. As a result, the net liability position has ranged from 50 to around 60 percent of GDP since 1994. This could give rise to vulnerabilities were the rest of the world to become much less willing or able to lend to Australia.’

We could afford to run a budget deficit permanently if we had a positive Balance Of Trade. That’s where the money comes from – what we sell to other countries and what we buy off them and the money that’s left over. The beauty of the trade deficit is its simplicity. It measures the difference between import and export revenues. It’s the money that’s left over that makes a country rich. It’s the money that’s not left over that makes a country poor.  In Australia’s case one-and-a half-trillion dollars poor. (1,500,000,000,000. If you lived to be 80 years of age you would have to save $34 Million each day of your life to have $1 Trillion.)

Lowering the Australian dollar has the opposite effect to what the media is usually telling us. A lower dollar makes everything we import more expensive: Thus raising the deficit if we continue to purchase as we do. (Although most liabilities are in Australian dollar so a lower dollar lowers the debt against the foreign assets Australia owns.)

Virtually the only ones benefiting from a lower dollar would be mining companies because their contracts are in US Dollars so every cent drop in the parity of the dollar is a 1% increase in the price of their product when they convert to Australian dollars. A 30% drop in the Australian is a 30% increase for the profits from their exports when converted from US dollars to Au Dollars but also a 30% increase in many of our imports depending on which country the imports are coming from.

Everybody pays more so some can make extra profit.

The answer to the question is self-evident; how can a country that imports everything benefit from a falling dollar? It can’t.

Even Julie Bishop has fallen under the spell of this voodoo economics as reported in the Sydney Morning Herald.

In response to Budget Estimates questions from Labor, DFAT (Department of Foreign Affairs and Trade) has revealed Australian diplomats in 2015 hosted 15 overseas fashion events in Abu Dhabi, Istanbul, Jakarta, London, Los Angeles, Manila, Mumbai, New Delhi, New York, Paris and Port Moresby that cost taxpayers hundreds of thousands of dollars.

IT’S been dubbed “fashion diplomacy” but critics of Foreign Affairs Minister Julie Bishop say the high-fashion-loving politician’s hosting of overseas runway shows has gone too far.

The Department of Foreign Affairs and Trade admitted it had not ­undertaken any modelling on whether there was an economic benefit in supporting the fashion industry, but stated two designers and labels, Michael lo Sordo and Romance Was Born, had been picked up overseas as a result of the events.

In defending the shift from foreign policy to fashion festivities, DFAT said its promotion of the industry was in line with its public and economic diplomacy agendas.

“Fashion diplomacy embraces innovation, style and creativity, all of which are key themes in terms of the way in which we wish to project Australia abroad,” it said.

Ms Bishop said the opposition was trying to kill of a 12 billion dollar industry and the sector employs 200,000 people.

Well it is a Billion dollar ‘industry’ that is a net loss.

Sure there are people employed, at the wharfs unloading the cargo, truck drivers, forklift drivers, unpackers, shelf stackers, sales people, even models and makeup artists but all for a net loss. On top of that DFAT spends taxpayer money promoting it with lavish parties.

Generally we think of industry as a manufacturing enterprise collectively, as opposed to agriculture or we think of it as the sector of an economy made up of manufacturing enterprises and the process of making products by using machinery and factories.

To Ms Bishop it is any general business activity such as importing and selling fashion items, even those selling fake handbags are probably included.

Danny Guest, founder of Blue Illusion, summed up the malaise. In 1998, when Blue Illusion was established, Guest made the label in Australia. Now, all the manufacturing takes place in China.

He cites the problem of lack of investment in new machinery, coupled with the state-of-the-art facilities and services offered in countries such as China.

If importing clothes is classed as an industry that the government should be spending tax-payers money promoting and if it is the new definition of ‘industry’ then Australia is the most industrialised country in the world.

The connection to prosperity was lost because the Howard Government’s major economic triumph was to convince voters through the compliant media, that domestic budget surpluses equalled immense economic management, even though monkeys could balance a domestic budget. The monkeys would simply let out less money than they took in; or take in more than they let out, whatever it is that monkeys do. And they did.

They pretended they were feeding the country economically while bleeding the life out of it. The plea of a generous diet will not hold good against bleeding a man to death.

The negative balance of trade is bleeding the country to death.

This Is an Example of the Lies That the Libs Get Away With

In this interview by the ABC, Broadcast: 07/07/2009, Reporter: Matt Peacock

MATT PEACOCK: But under the Howard Government, that foreign debt, combined public and private, soared.

The debt that Malcolm Turnbull's truck [another truck stunt] is now focused on according to economist Ross Gittins is purely the Government's debt.

ROSS GITTINS: Were they to talk about the foreign debt, the Government would say, "It trebled under your watch." So they don't want to talk about that. They want to talk about the one that's happened under this Labor Government.

Then Turnbull went on to say this and was not corrected:

MALCOLM TURNBULL: The problem with Labor's debt is that they've taken Australia, in a little over 18 months, from being a country which had no debt at all - no debt at all, and cash in the bank, and now we're heading for the biggest debt in our history. And that debt will have to be repaid, the interest on it will have to be paid, and it means, inevitably, higher taxes and higher interest rates.

Sales of public businesses to rich private hands yielded $72 billion. And yet Australia’s cash in the bank when Howard left office was a pathetically low 7.3% of GDP. (Chile 13.0%, Sweden 17.4%, Finland 72.5%, United Arab Emirates 100.8% and Norway 138.8%. Constant crowing by the cocky Coalition about the strong surplus it left is laughable. Even Algeria [20.9%], Bulgaria [10.2%] and Kazakhstan [14.4%] had better books in 2007 than Australia.)

As it turns out interest rates have never been lower. And now they want to lower taxes.

The problem with Labor's debt is that they've taken Australia, in a little over 18 months, from being a country which had no debt at all - no debt at all, and cash in the bank, and now we're heading for the biggest debt in our history.’ That is as big a lie as it is possible to make about Australia’s debt and it went uncorrected, worse still Turnbull parroted the same lie day in and day out without anybody telling him he was lying although he knew he was lying.

The press is complicit.

The Stimulus Package

Speaking to Liberal Party members at the party’s Melbourne headquarters around the time of the GFC Mr Howard said it took 10 years for Australia to repay $96 billion in federal debt left when his government came to office.

Then he had this to say:

‘We can only contemplate the length of time needed to liquidate the $200 billion of debt at the very least our nation now faces as a consequence of recent policy decisions.’

‘Malcolm Turnbull [note it was Turnbull as the leader at the time] and his colleagues were absolutely right to oppose the Government’s stimulus package.

It needlessly plunges Australia deeply into debt with a poorly-targeted spending spree.’

He never said to the party faithful that the Australian Government's $42 billion stimulus package saved Australia from the GFC and it was greatly helped by the $700 billion Chinese Government stimulus package.

And no it wasn’t spent on ‘pink bats’.

The spending plan includes pre-Christmas payments of $4.8 billion for pensioners, $3.9 billion in support for families, and $1.5 billion for first-home buyers – delivered benefits to millions of Australians.

FROM March, families eligible for Family Tax Benefit Part A will receive a $950 Back to School Bonus for each eligible child.

One-off $950 payments will also be made to: 

AROUND 1.5 million single-income families who receive Family Tax Benefit Part B;

FARMERS and rural-dependent small business owners receiving exceptional circumstances assistance;

YOUTH Allowance, Austudy, Abstudy and Education Entry Payment recipients;

FROM April, workers earning up to and including $80,000 will get a $950 tax bonus;

THOSE earning $80,000 - $90,000 will get $650;

PEOPLE earning between $90,000 - $100,000 will receive $300.

See the full second package here: More than 10.6 million Australians will receive cash bonuses under a $42b Government plan to boost the economy.  

See some of the analysis here  and here: the political rhetoric (by the Liberal Party) is at odds with the major forecasts (such as the OECD and IMF) which confirm that the stimulus packages must not be wound back.

More on Foreign Debt and the Balance Of Trade

Note how, with Turnbull, it is always ‘Australia’ (The problem with Labor's debt is that they've taken Australia) never the ‘government’. But it was the government and not Australia. However, during the Howard years Australia was borrowing money in billions of dollars and we didn’t even know about it. Where was it coming from?

Well, we didn’t’ have inflation and high interest rates in the Howard years because of a miracle economy.

We had inflation and high interest rates because of an ever spiralling national debt, caused by a never ending trade deficit. Every month the country was losing billions of dollars. Every year Australia’s deficit in goods, services and investment in a quarter could be as high as $15 billion. That is the equivalent of the country borrowing cap-in-hand $15 billion a quarter or $60 billion annually from banks and trading partners.

What’s The Danger for Australia You Ask?

 At the moment we are propped by Asian economies buying Australian dollars. It’s in their interests right now, because Australia is a huge export market for them. But if they sell their foreign exchanges reserves then what would happen?

Interest paid on gross foreign debt as a percentage of GDP has quadrupled. No other country is worse than Australia and only countries likeHungaryandBulgariaare close.

Foreign debt is often expressed as a percentage of annual gross domestic product (GDP) in order to show its significance relative to the size of the overall economy. Throughout the late 1970s and early 1980s, gross foreign debt was fairly low at less than 15 per cent of GDP. Now it is close to 100 per cent of GDP.

A similar pattern is evident for net foreign debt as a proportion of GDP which has increased more than seven-fold since June 1981.

(We get away with it mainly because of population growth which has trebled in the life of the current PM Malcolm Turnbull.)

Gross foreign debt is currently 4 times the value of exports.

The current Reserve Bank Act says: It is the duty of the Board, within the limits of its powers, to ensure that the monetary and banking policy of the Bank is directed to the greatest advantage of the people of Australia and that the powers of the Bank ... are exercised in such a manner as, in the opinion of the Board, will best contribute to:

(a) the stability of the currency of Australia; (b) the maintenance of full employment in Australia; (c) the economic prosperity and welfare of the people of Australia.

Trying to achieve a lot of things is often a recipe for achieving nothing.

One thing is certain – our current course is not sustainable. Running a permanent trade deficit is not a long-term option. Platitudes, lip service, empty gestures and theories are not enough.

That was all the Liberals could come up with, in ten years, to stave off high interest rates and our looming foreign debt crisis. Party now, pay later; 1996 =180 billion 2008 = 610 billion (CIA The World Factbook: the entry gives the total public and private debt owed to non-residents) – the figures speak for themselves.

Foreign Debt under Labor                  $180 billion

Foreign Debt under Coalition             $610 billion

(These older figures are no longer available on the website.) Read more: Why our foreign debt is a taboo topic.

In 1986, household debts amounted to 46 per cent of disposable incomes (income after tax). Twenty years later, that ratio had climbed to 152 per cent – the highest figure in the world. When Australians talk about cost of living pressures, it's the debt servicing costs that are hurting most households.

A Brand New Three Word Slogan

Nimble, agile and innovative the new buzz-words.

Turnbull said: ‘The Australia of the future has to be a nation that is agile, that is innovative, and that is creative.’

Prime Minister Malcolm Turnbull believe that innovation can be turned on and off like a tap.

PM Turnbull has pretended to put ‘innovation’ back on the nation’s agenda, as if innovation was manufacturing, but will he be able to put anything into practice? It’s not innovation we need (we’ve had all the innovation we need with the Hills Hoist). What we need is to build the things we use. Turnbull glossed over the difficulties that lie below the surface of the very complex issues.

It’s complex because we have forgotten that we were once a manufacturing country. We suffer from manufacturing amnesia. Nobody remembers that we did it or how it was done. Right-wing think tanks don’t want us to recommence manufacturing and become self-sufficient as a country because now we have to borrow money from the world bankers and that’s something they don’t want us to stop. If fact the more the merrier.

Turnbull generally gave the public the impression that, with the right style, (a new suit and a smiling face) the digital disruptive industry (disruptive being the new buzzword for companies such Airbnb or Uber’s that disrupt existing structures. He’s not so happy about the disruption being caused by Abbot in his own party) will be our friend and everything will be fine again and quickly too. No matter how great the talent or effort, some things just take time: You can’t produce a baby in one month by getting nine women pregnant.

Turnbull thinks the answer is in getting smarter. Everyone should become a paper shuffler like he is. (Malcolm Turnbull made headlines across the world by promising to ratify phase two of the Kyoto Protocol and by committing $1 billion over the next 5 years to minimizing climate change. However, he is in reality taking money from Australia’s existing tiny aid budget and pretending to do something new. His “very important statement” is simply moving money around.) That’s all he has ever done. That’s all he knows. Maybe he could the ‘rainfall enhancement technology’ and the wasted millions.

The federal government spent more than $1,700 on three beanbags as part of a creativity initiative.

The opposition quizzed the department about foreign affairs minister Julie Bishop’s description of her brainchild initiative as a “gorgeous little funky, hipster, Googly, Facebooky-type place”.

The innovationXchange, launched in March, aims to develop more effective aid programs.

Bean counters.

The bags were purchased at a cost of $590 each for the innovationXchange initiative, the Department of Foreign Affairs revealed in an answer to Labor Senate leader Penny Wong.

The trouble is we would still have to import everything even the bean bags. Turnbull’s gizmo idolatry is similar to believing that everyone can invent Apple or Facebook over and over and just watch as the money rolls in – tax-free. It’s also akin to saying to other countries such as China ‘we will do all the smart work and you can do all the dumb work’.

Maybe he thinks everyone can be paid like Marissa Mayer of Yahoo despite her lack of performance, although currently she faces growing pressure over the company's performance and her pay package. Mayer's pay package jumped 69 per cent to $US42.1 million last year as she worked on a turnaround of the Web portal.

Or why doesn’t everyone just learn to play tennis like Roger Federer or Serena Williams and retire young? (That is the young could retire young. The not-so-young would have to concentrate of doubles and mixed-doubles which would take longer.)

It’s similar to saying everyone should go to Hollywood and become a movie star. Yes, some might make a lot of money but most will simply starve.

It’s not more Airbnb or Ubers Australia needs. They cost jobs not create them. And even worse they cost jobs at the lowest and unskilled end to the market. The profits from these companies go offshore and the pretend workers will pay no tax and neither will the companies.

It is of course a way of getting people to legally work below the minimum wage. It’s ‘work choices’ dressed up in a phone app.

Employee pay and conditions are notoriously bad in startup companies and the overwhelming majority never succeed.

Talking about putting money into startups is about putting money into generating low paying, short term jobs.  Don’t we want public money put into generating secure, well-paying jobs? And as for the misery amount the government is hoping to create the smart economy with consider that Samsung, one company, one year [will spend] $18.6 billion in research and development alone.

In an article in the Philadelphia City Paper, Emily Guendelsberger worked undercover as an UberX driver in Philadelphia and after 100 rides, she concluded that she would need to work 10 hours per day for six days each week, and take just one week off each year, to make about $30,000 annually before taxes. (Or as she said ‘if I wanted to net that $90,000 a year figure that so many passengers asked about, [Uber’s promotional figures] I would only have to work, let's see ...27 hours a day, 365 days a year.’)

And how do they get away with calling it ‘ride sharing’? If you pay money to be taken from A to B that’s not ride sharing or if it is then even public is ride sharing.

Why is it acceptable in Canberra? Because, it’s Work Choices revisited.

If there was a phone app that allowed us to call up a replacement for a banker or a politician, ‘politician sharing’ (to sit on a bench and nod our heads in unison and occasionally nod off in boredom) for a day or two, on below minimum wages, they would fall over themselves to rush through a bill the next day to prevent it.

Or if an elderly lady in a small town, where there were two or three Taxis, decided to set up a phone answering business by having other town’s people picking up passengers she would be locked up. Or the ACCC would block her.

Uber eats! They drive around with the food already in the car waiting for a call.

Can you imagine an Indian restaurant getting away with that one?

But because it’s a phone app that is something innovative, and even better according to Turnbull it’s ‘disruptive’. In Canberra, where Uber will be legal, taxis were paying twenty two thousand dollars a year as a licence fee. That’s four hundred dollars a week before they even start up the car. Uber drivers would be happy with just that amount in total.

The first step, a long time ago, should have been to cut the taxi licence fee from $22,000 a year to, say, $1,000 to cover admin costs.

(As of October 2014, standard Taxi Licences were selling at around $525,000.00 plus Stamp Duty (approximately $17,700.00).  To earn a return on that would under normal interest rates be a further $50,000 a year or another $1,000 a week.)

Instead of embracing Uber, (Eventually they will buy up everything until they have a monopoly and then….) a foreign company with no interest in Australia, except to rip as much money as possible out of the country, all the government had to do was deregulate the taxi industry and regulate Cabcharge’s 10 per cent ridiculous surcharge. The owner, Kermode, was 86 and not likely to change; and now he has passed away. Soon every competition regulator in the world will have their hands full dealing with the enormous and rapacious Uber monopoly. And who is going to be the next Uber and the one after that until eventually everyone is in a car just driving around until there are driverless cars and everyone is at home again. Then the cars will be driving around all on their own.

That should fix the economy.

On the other hand there is a new movement for young artisans who are these days being called makers. It is also called the fourth economy and its aim is to have a sustainable economy into the future. The industry can be implemented is a moderate way immediately. But because it’s not disruptive and in fact it’s the opposite, nobody is talking about it or funding it.

As a comparison to government investment in Australia, in Israel, the government puts in $7 for every $1 of private investment in a start-up. That means 85 per cent of investment in tech risk capital comes from the government.

The result is that Israel saw a $25 billion growth in exports, and a high return on its government investment.

Now let us apply that to a real-life example at home.

The Queensland’s Department of Health software cost an estimated $1.25 billion. Rather than paying that money to an overseas company to provide a package which is modified to fit the Australian system, we could have used it to develop our own from scratch.

That sort of money could employ 5,000 IT professionals on $100,000 a year for three years. Then there would be many more similar enterprises once the expertise was established.

It would be an investment that would nurture Australia’s technology ecosystem and build on IP knowledge base created by Australians for Australian and the rest of the world, not the other way around.

However, it is industry that drives innovation not the other way around.

Imagine if the ideas lead to new products that needed to be ‘manufactured’. How would we do that?

Turnbull talks of technology as he waves around his phone with a new app, like wow, this is so awesome dude!

People create apps for a hobby and there are thousands of school kids who do the same.

Manufacturing

Manufacturing needs appropriate infrastructure but big companies have to pay their way if they want to have the infrastructure.

Henry Ford made a fortune but he didn't have to build the roads for his cars. The public taxes did that.

The poor may not drive cars but the still have to fund the roads or maybe even build them.

The big companies want all the facilities laid on by the taxpayer but they don't want to help fund them. As Warren Buffett admits he could not have made his enormous wealth if he had being born in India or the jungle in South America. He needed everything to be in place already.

Australians love cruising but they don't build the cruise ships. Could they build the ships? Of course they could, if the will was there. The South Koreans did it and it wasn't done on cheap labour either. Labourers were being paid double what a labourer would receive in Australia. The brought in the experts, one from Ireland and one from Canada and asked them what their dream shipyard would be like. Then they said ‘build it’. They had no history of shipbuilding but they figured if the Japanese could do it they could. And they could.

They built the biggest shipyards on the planet.

In 2005 Richard Carlton discovered that a gleaming new tanker or container ship slips into the water every 36 hours. They had 20 billion dollars of work going forward.

They had the five biggest shipyards in the world in what just 30 years before had been rice fields.  From a dirt poor country it is now an industrial powerhouse; Producing 300 tankers a year. They invested billions of dollars. Education and hard work is the key.

The started the industry from scratch. A country that was once just rice fields and was occupied by the Japanese had to come from a very low base.

Australia gets little from supplying the materials. Only about 3% is paid for Australian Ore. All the rest is valued added.

In a 100,000,000 million dollar container only 3,000,000 is paid for iron ore.

The industry is not founded on the backs of low wage earners either. They work a 44 hour week. Daewoo paid $70,000 Australian dollars to a shipyard worker in 2005.

The Bosses salary is 3 or four times the lowest paid. No million dollar salary. It gets invested back into the business.

South Korea is the biggest shipbuilding country in the world with 37.45% of the world total.

(China is second. The opposite of Capitalism is not Communism. The opposite of either one would be good and honest government. That’s what we are asking for.)

So could Australia. We did it once. We have forgotten that there was a substantial shipbuilding yard in Whyalla and in Brisbane. These two companies together produced 74 merchant ships from 1942-72. The ship building industry in Australia has witnessed a decline from 1970 onwards.

We could do it again. And it has nothing to do with wages. It has to do with government will. None of our super wealthy individuals has shown the slightest interest in manufacturing and there is no indication that they ever will.

Casinos and newspapers/television and mining and shopping malls, supermarkets and more gambling are lucrative for the owners but they are not manufacturing and those in charge show not the slightest interest in ever manufacturing anything.

There needs to be big tax incentives for manufacturing. At the moment all the profits are either leaving the country being invested in realestate or going to shareholders and not into growing the businesses.

Without a manufacturing industry we will indeed be the Poor White Trash of Asia. Being agile and nimble is just another slogan and it will fizzle out by the time the next slogan comes around.

Economies like Japan and Germany were built with long term low interest and sometimes no interest loans. That is what is needed in Australia. The manufacturing industry must be resurrected.

A Deloitte report stated the nation could become less competitive over the next five years while the United States was expected to become the most competitive country in the world, overtaking China.

Deloitte’s 2016 Global Manufacturing Competitiveness Index showed Australia had fallen five places from 16 to 21 in over the past two years.

Top 10 competitive manufacturing nations:

  1. China
  2. United States
  3. Germany
  4. Japan
  5. South Korea
  6. United Kingdom
  7. Taiwan
  8. Mexico
  9. Canada
  10. Singapore

Manufacturing industry’s share of GDP

The usual complaint and excuse is that Australia is a high wage country, but Germany is still one of the biggest manufacturers in the world and it’s not a low wage country. How have they adopted to the competition from low wages in Asia? One example would be Germany’s Putzmeister, the world’s biggest manufacturer of the giant concrete pumps used to pump concrete up to the top stories on construction sites. It splits its production between high-wage Germany and low-cost China. The Chinese plant mostly serves the booming Chinese construction industry. German operations meet the demands of developed-world construction companies. There is also a plant in the US for their construction industry. Both the high-wage and low-wage operations are close to the customers they serve. Many new jobs are created in the high-cost German economy.

Belgium, Canada, France, Germany, Ireland, Italy, Japan, the Netherlands, Spain, Sweden, Switzerland, United Kingdom and others are not low wage countries but they are manufacturing countries. Ireland with a much smaller population and few natural resources has many similarities to Australia but it imports 60 billion dollars less than Australia thus giving it a huge surplus in its balance of trade. It borrowed the money to achieve that and it came off a very low base. The industrial revolution passed over Ireland like a white cloud on a fine day.

Ireland and Australia went in different directions around thirty years ago and it would be difficult to suggest that Australia went in the correct direction. If Australia didn’t have minerals it would be as Paul Keating said a real ‘Banana Republic’. If you substitute minerals for bananas that’s what Australis is.

Unlike Ireland, thirty years ago Australia was up with the rest of the world in manufacturing; now Australia is down to the level of Greece.

 (Ireland’s fall from grace had nothing to do with the balance of trade or manufacturing but with the speculative bubble in property that was supported by a surge in bank lending, and the balance sheets of Irish banks grew disproportionately large relative to the size of the economy. The Irish were buying property all over the world with money borrowed in Ireland but not Irish money. When the international financial crisis erupted in August 2007, Irish banks were left vulnerable and exposed. When America’s housing market turned, a chain reaction exposed fragilities in the financial system. With falling property prices, banks began to suffer huge losses on their loans. Much of the money had come from conservative Germany (they save but they don’t speculate) and the Irish government guaranteed the banks. Surprisingly the Germans wanted the money back.)

The opening of the Newcastle Steelworks in 1915 established the Australian steel industry.     

Years later…Although the reformers spoke of a re-energised Australian manufacturing sector, responding to tariff cuts with an outward re-orientation that would stimulate innovation and boost productivity, this proved to be fanciful. Australian manufacturing went into precipitous decline instead.

Manufacturing has been reduced to a remnant. …Given the continuation of current policy, further decline in manufacturing is assured.

To reduce the foreign debt, what we need is to manufacture the things we import or at least some of them; house-hold products, whitegoods, tools, computers and all the things we regard as necessities.

Without a manufacturing base, Australia would need to import more consumer and capital goods, reinforcing our chronic inability to run a positive trade balance.

The drop in the Australian dollar might help the tourist industry but overall the country will go backwards because everything we import will be dearer. It’s now use telling us that internet items will be dearer so therefore that will help retailers in Australia. It would if the things they were selling were manufactured in Australia but they also have to purchase overseas so their price will have to rise exponentially. How can they be relatively cheaper?

It is increasingly recognised that accelerating deindustrialisation results in countries going backwards technologically, and diminishing their capacity for innovation. Not the other way around as Turnbull keeps trying to convince us. Other industries cannot substitute for this loss in capacity.

Until someone admits that’s where the problem is the country will continue to stagnate and struggle.

For example, in a paper published in the journal Applied Economics in 2009, Miao Wang from Marquette University, examined the relationship between inbound foreign direct investment (FDI) and economic growth within 12 Asian economies over the period 1987 to 1997. This analysis found that FDI inflows into non-manufacturing sectors did not play a significant role in enhancing economic growth. However, FDI flows into manufacturing industries had a significant positive impact.

Honesty in Government

Finally, before we can get anywhere we must have honesty and morality in our leaders and not let governments be corrupted by vested interest lobby groups and a compliant media.

The 2014 budget, the start of Abbott’s downfall, was laden with broken promises, not just with regard to the measures it contained, but its fundamental breaking of his compact with the people.

Abbottwon the election campaigning foremost on trust. People took him at his word even though they shouldn’t. “Remembering Abbott’s past”.

No cuts to health, No cuts to education, No cuts or changes to pensions, No Medicare local closures, No unexpected adverse changes to superannuation, All $100m-plus infrastructure projects to have cost-benefit analysis, Provide mothers with 26 weeks paid parental leave, Cut the company tax rate by 1.5%, No tax increases, No cuts to ABC or SBS, No-one who arrives illegally by boat will receive permanent residency, I want to see car-making survive in this country, not just survive but flourish, Taxes will always be lower under a Coalition Government...

Then he broke that trust immediately supposedly because of how the economy was with figures he made up and projected figures that don’t exist, except in his head. He knew before the election and everyone that mattered knew exactly how the economy was. The figures were available to everyone.

Tony Abbott would have died happy with his government's achievements if he had been accidentally killed on the morning of the day that he was removed as prime minister (one of his better ideas without a slogan) he said in an interview with Fairfax Media.

Among the achievements were stopping the asylum-seeker boats, the successful negotiation of trade agreements with all three of Australia's biggest trading partners, (which had been in negotiation long before his time and had little of nothing to do with him) and the establishment of the royal commission into trade union corruption.

He said that the problems and limitations the government suffered were not of his making: "I think it was a very successful government in spite of a feckless Senate, an irresponsible Labor Party, a poisonous media culture (even though he had News Corp's papers, websites and apps which are still read daily by a higher percentage of Australia's population than is reached by any other single publisher in any other sizeable democracy in the world. He had Andrew Bolt, Tim Blair, Miranda Devine, Piers Akerman, Rita Panahi, Terry McCrann, Paul Kelly, Chris Kenny, Janet Albrechtsen, Nick Cater, Brendan O'Neill, Maurice Newman – the list of News columnists goes on and on)  and well organised white-anting."

The former prime minister defended the 2014 budget: "We did manage to get $50 billion of savings in place," he said, over the four-year forward estimates. (Figures he made up because the deficit is still going up dramatically.)

He cited four specific budget proposals - cutting the rate of spending growth by changing pension indexation, (the elderly don’t count or maybe he thinks they can’t count.) the Medicare co-payment, deregulation of higher education and the so-called "learn or earn" welfare changes and said: "These were all very important economic reforms. In the immediate aftermath, commentary was pretty positive. It was only after the Senate cross bench turned out to be populist and the ALP obdurate that the commentary went from 'reformist' to 'impotent'."

Read more: http://www.smh.com.au/comment/view-from-the-street/view-from-the-street-former-pm-regrets-not-being-hit-by-bus-20151201-glcjhf.html#ixzz3t8Y4lo7m

And sure, that sounds a bit slim for two years of effort, especially when you take into account that the boats haven't stopped (as we were reminded about only last week), that the trade deals were well under way long before the Abbott government was in power (China TPP negotiations began in 2005; the first Trans-Pacific Partnership negotiations started in 2008; negotiations for the Korea-Australia FTA were almost concluded when Labor lost power in 2013), and that the royal commission descended into farce riven with well-founded accusations of bias when the head of the Commission, Dyson Heydon, ruled that he had no conflict of interest when he agreed to speak at a Liberal Party fundraiser

(He didn’t say that amongst the number of Party members stood down over the last 30 months, since May 2013, 15 are Liberal Party members. One is a National and one is Labor.)

He still doesn’t get it that everything they did were broken promises.

It’s just part of the hyper-partisan malaise that has become endemic in politicians.

Abbott took his cue from Honest John Howard who got away with it too.He lied about everything but he got away with it.  

"Telling a lie is easier than killing it, even for a prime minister. A lie is a lie, and once it is out on the street no amount of passing traffic can ever truly skittle it. John Howard told a lie on May 2, 1995. Then he told more lies to reinforce the first lie. To protect himself from what he judged a serious threat to his last chance to be prime minister, Howard lied and went on lying. Howard lied about the GST before the 1996 campaign. He lied about these lies during the 1998 campaign. He lied about the reasons he took Australia into the Iraq travesty. Now we are told by someone at the centre of events that he lied about the children-not-overboard affair and his non-core promises were just outright lies and a disaster.

He is still lying about the Iraq invasion.John Howard should be tried for conspiracy to commit mass murder by the international criminal court over the 2003 invasion of Iraq, independent MP Andrew Wilkie has claimed.

The Economy

Despite the Conservatives saying that it is in their DNA to be better managers, in fact no party is a better manager of the economy. They mostly all just rise and fall with the tide of the global economy. Rodney Tiffen and Ross Gittins compare the Howard government’s economic record with the performance of other Western countries. They match almost exactly. However it is to Labor that we have to look for all the innovative policies. The Hawke–Keating Government introduced Economic reform. A fringe benefits tax and a capital gains tax were implemented. A compulsory superannuation was introduced.

The economical comparison between the US and Australia is unmistakable. However, Australia never was a superpower so it’s not as noticeable. The US still thinks of itself as a superpower but it hasn’t won a war in a lifetime.

How did the US rise from being little more than a colonial power to being a superpower? After the great depression of the 1930’s, Franklin Roosevelt planned and instigated an economic policy which rebuilt the US economy from the ground up.

In one simple example he created two million jobs that didn’t previously exist in parks and recreation. He began an infrastructure program on a scale previously undreamed of, putting dams and power stations near farms and bringing better living conditions to rural America.

From 1933 to his death in 1945 he presided over an epic stimulus program which transformed the flagging economy into a high tariff, high taxing, and prosperous system of production and distribution and consumption.

The rapid industrialisation of the United States gave it at least the appearance of a superpower.

However, the post war period under Harry Truman saw Roosevelt’s industrial economy systematically dismantled. Real capital was siphoned off through privatisation and replaced with mountains of debt. Financial markets were deregulated, leading to a series of booms and busts of ever increasing magnitude. The most recent brought the entire western world to its knees.

Roosevelt had repudiated Churchill’s planned cold war. Harry Truman proved a much more pliable president. That was where the rot set in again. Truman became a prisoner of the money people the Rothschilds, Warburgs, Lehmans, Goldman-Sachs’, Rockefellers and other banking elites, a relationship set in stone by the Federal Reserve Act of 1913,

In 1963 JFK planned to issue government bonds as currency, effectively shutting down the Federal Reserve. This did not end well for Kennedy, and to this day Washington and Wall Street remain loyal servants of the money people.

Projects built with taxpayer dollars was handed over to private interests only to be rented back at a profit.

So where did the money go from the US? It followed the manufacturing. Where manufacturing goes the money flows. Today we are witnessing the birth of a new superpower. This is unstoppable. The Anglo system was based on looting and that’s not as legal as it was. American capitalism was based on productivity. When the US outsourced its manufacturing to China (and Brazil), their superpower days were over. With almost total control of global manufacturing and new multibillion dollar funds for development the power lies with China.

China is now the banker of the US. Luckily China loans money to the US so that it can buy what China manufactures. But there is a price to pay. Credit Hillary Clinton with a wonderful quote which is, indeed, a great question: 'How do you deal toughly with your banker?'

China, whether we like it or not, is the new great power; it is also Australia’s banker and Australia’s factory. China may own as much as 20 per cent of all Australian Government debt according to big Canadian investment bank RBC.

Reserve Bank of Australia governor Glenn Stevens said in July that markets need to prepare for a world where China invests $400 billion a year offshore. The figure is equivalent to more than 25 per cent of the Australian economy

The comparison between the US and Australia is obvious. Once Australia closed its manufacturing and sold its government assets it was on the slippery slope to the mud at the bottom of the incline or in this case decline. The only way out of the mud would be to start climbing back up the slippery slope. Because the Coalition doesn’t even acknowledge that we are in the mud, or that there is a slope, all we are doing is sinking deeper. We are still selling off the assets. Now it’s the States and Territories selling them: Ten billion here half a billion there.

(Their latest rumoured plan is to sell the NBN network off, at a huge loss, to their corporate mates even before it’s finished. And no doubt take enormous commissions or transaction feeslike they did from the sale of the NSW power grid – a 'massive’ $134 million.

According to the Financial Review, these were huge "fees" for Liberal donors.

‘Banking sources place the fees for their advisers JP Morgan and Royal Bank of Canada at about $20 million. Each. Plus a cut of the debt and equity fees. Sweet Mary! As for the government's advisers UBS and Deutsche Bank, disclosure on the NSW tender website "estimated" they would each earn $17.5 million for their work ...’

Three of these recipients – JP Morgan, Deutsche Bank and UBS – have been generous donors to the NSW Liberal Party. An inquiry must determine why so many beneficiaries reaped such huge ‘rewards’ from the public purse.

Senior Liberal party figures and donors, including the party's federal treasurer, have reaped multi-million windfalls from the former Baillieu government's signature urban renewal project in inner Melbourne.

An investigation into the controversial Fishermans Bend project has found Liberals' honorary treasurer Andrew Burnes is among a slew of party activists and donors who either bought into the renewal precinct before it was rezoned or were long-term property owners that pressed for redevelopment of the area.

Others include auto dealer John Ayre and BRW rich-listers John Higgins and Harry Stamoulis​.)

How important is manufacturing for any country? Well it’s a lot more important than being agile and nimble and Ubering, all of which are just a new form of Work Choices’.

In a recent interview with Charlie Rose, when asked if Russia would survive sanctions, Putin replied: “Naturally, beyond any doubts, it is even out of discussion. Sanctions even have a certain advantage. Do you know what is it? The advantage is that previously we used to buy many goods, especially in the area of high technology, with petrodollars.” “Now, with the sanctions imposed and our partners having left our market voluntarily, we have an opportunity to develop.”

However, we have all our faith in Free Trade Agreements. Despite the fact that the critics were right. Ten years after the Australia–United States Free Trade Agreement, or AUSFTA, came into force, new analysis of the data shows that the agreement diverted Australia’s trade away from the lowest-cost sources. Australia and the United States reduced their trade with the rest of the world by US$53 billion and are worse off than they would have been without the agreement.

Negative Impact of Free Trade Agreements

Australia stands to gain almost nothing from the mega trade deal sealed with 11 other nations including United States, Japan, and Singapore, the first comprehensive economic analysis finds.

The annual boost to growth would be less than one half of one 10th of 1 per cent.

Prepared by staff from the World Bank, the study says the so-called Trans-Pacific Partnership would boost Australia's economy by just 0.7 per cent by the year 2030.

Another recent study by the federal Parliamentary Library, released in December 2008, found that, overall; free trade agreements (FTAs) have had a negative impact on Australian trade flows.

It concluded, "Of the four FTAs currently in force, a common feature has been their impact on trade flows. The FTAs were followed by higher Australian trade deficits and a much slower rate of reciprocal export growth, as well as trade diversion as products were sourced from countries with which Australia has zero tariffs."

However, each of the agreements had benefits for some industries, which made it look as if they were generally beneficial.

In relation to the Australia-US Free Trade Agreement (AUSFTA), the report said that Australia's manufacturing sector was expected to be "the biggest winner, particularly motor vehicle producers and component manufacturers".

We all know how that worked out.

Depending on whose economic modelling you believe, every dollar spent in subsidising the production of cars returned between $3 and $6 to the economy overall. Keeping auto manufacturing and associated industries going would have been $300 million well spent. Hockey and Co were ideologically opposed so they were allowed to collapse and with the collapse go all the jobs and all the skills.

Motor vehicles might be cheaper for the consumer but it costs the country dearly in the long term. Like so many things motor vehicles are imported and the money to import them is borrowed, hidden in the ‘balance of trade’. The employment is gone, the skills are gone, and the knowledge is gone.

If the country was at war the army would have to buy their boots before they could mount a defence. Hopefully, not from the country they were fighting with.

Malcolm Turnbull fumbled the so-called rescue of the NBN, delivering less than he promised and for twice the price. It’s vastly over budget, over time and underperforming and, having spent $800 million to buy and reuse Optus' cable network, now it may be forced to invest another $375 million to rebuild parts of the fading network because it isn't capable of delivering high-speed broadband after all.

It was all scandalous news for the government, which has based much of the rationale for its revised NBN plan, on the basis that it was being thrifty.

Why did it get everything so wrong? Is Turnbull just a double-dealing lying fool? Well probably not. The most likely reason is that there is no expertise and no skills left in Australia for anything. In simple terms nobody knows what the hell is going on any more. Skills are not something inherent in us. The skills have to be learned then nurtured and developed and most of all used in the correct field. Skills don’t come from a phone app or the disruptive economy.

Finally on manufacturing; there is no need to become smarter or innovative as Turnbull keeps telling us. Australian expat Danny Kennedy moved to Oakland in the San Francisco Bay Area in 2008 to start a rooftop solar company, Sungevity. In California, solar is cool. It has also become one of the USA’s fastest-growing industries.

"The solar industry has employed 55,000 Californians," Mr Kennedy says.

"That's more than Twitter, Google, Facebook and Apple combined. As a national employer solar is huge, it's bigger than the coal mining industry now." There one thing that Australia has plenty of – sun.

Royal Commissions

On top of all the other Liberal lies, Abbott proceeded to waste $200 Million on Royal commissions aimed at his political opponents and his biggest one was against the unions –his mortal enemies.

When the biased commission couldn’t come with anything against Bill Shorten they buried the information in the 13th paragraph of a TURC press release issued at 8:07pm on a Friday night. Even the Weekend Australian newspaper, a big Liberal supporter, was scathing.

And if one of the reasons for the Royal Commission into the unions was to clean up the building industry, where is the Royal commission into corporate fraud which is where the real criminals are operating in the industry?

At least $3 billion of debts are being shirked in the construction industry due to the insidious and illegal practice of phoenix activity, a Senate inquiry has heard.

So-called phoenix companies are businesses that collapse one day with a pile of debts then rise from the ashes with the same assets and customers to avoid paying their bills.

And where is the Royal Commission into the banking and investment industry such as Macquarie Bank with its self-titled 'Dream Maker' Peter Spann aggressively marketing Macquarie structured investment products between 2006 and 2009 through his now-defunct financial advisory business, Freeman Fox. And there are many other riches-to-rags stories but the government looks the other way.

It’s not hard to see where the real crime was in this Royal Commission – the cost $45.9m with Justice Heydon receiving remuneration in excess of $3000 a day. Some figures say as much as $9,000,000 to Hayden for 2 years work and Jeremy Stoljar SC - $3,300,000.00 plus $54,000 to ‘get ready’ for the Trade Union Royal Commission.

This is an echo from down the ages. For instance, in 1976 the Sweeney royal commission had a look and later in 1982, the Winneke royal commission looked at bribery and corruption in the building industry. In 1984, the Costigan royal commission examined the criminal activities of the ship Painters and Dockers Union and so on.

In 1989, Heydon and Meagher recommended that union officials should have the same fiduciary duties as company directors.

So the great cold war warrior, who gave the academically underweight Tony Abbott a Rhodes scholarship, has coughed-up the goods – nothing again – just his own ‘get rich quick scheme’.

Economist John Quiggin says the auditor general should be called in to “investigate this appalling waste of public money”.

The two people the Abbott government expected to be scalped, Bill Shorten and Julia Gillard, are home free.

The Commission found that it would be naive to deny wide spread systemic corruption, but that it was notoriously difficult to find particular instances. So if corruption cannot be found, how can it be said to be systemic?

Another on of Abbott’s Royal Commissions gives the impression that nobody had ever died in the workplace before roof installations began.

But they did and they die in the workplace at the rate of three or four every week.  Between 1989 and 1992, 3,627 Australians lost their lives in work related accidents. This equates to nearly 16 per cent of all deaths during that time period. Also in Queensland there were seven electrocution deaths in 2011 and 2012 and they had nothing to do with the so called ‘Pink Bats’.

In the construction industry alone in 2015 year, after two construction workers were killed on Wednesday 25 November 2015, the total fatalities in the sector is at least 22 (and that is less than half of each of the two highest sectors). The total killed last year was 29. That compares with 17 for 2013.

That’s despite the Bureau of Statistics data showing construction activity fell substantially in in 2015 — down 14.2% on the previous year.

PM Malcolm Turnbull said in May:

“One of the important things we should do is make sure that we remove as many obstacles to enterprise and entrepreneurship as we can ... That is one of the reasons the Abbott government has been so assiduous in cutting regulation and red tape.”

Not surprisingly, Financial and insurance services; Information media and telecommunications; Professional, scientific and technical services; Education and training; Wholesale trade had no fatalities. Government administration and defence shows only one death. That’s why deaths in the workplace are not important unless one of Abbott’s opponents can be targeted.

More people will die from poverty as a result of pension cuts, in a country where one in three pensioners’ lives below the poverty line, and health funding cuts that will prevent the poor from receiving adequate care, but there will be no Royal Commission into those deaths.

Are All Deaths Equal?

Indeed they are not, Five-thousand-five-hundred die due to alcohol in Australia every year without hardly a mention.

100,000 Americans are shot every year – some are murdered, others commit suicide, and others are the victim of tragic accidents.

More than 31,000 of these people will die. And no they are not killed by terrorists.

18,000 school children and teenagers are shot each year in the US.

Malaria killed around 440,000 people in 2015. Malaria is credited with killing off entire species of birds – notably in Hawaii where, when it was introduced in the early 19th century, no native species had built up immunity – and some even blame the fall of certain civilisations on the disease’s spread.

If you happen to be one of around 100,000 people who die of snake bites around the world in any given year, such facts are irrelevant.

Sepsis causes millions of deaths globally each year and is the most common cause of death in people who have been hospitalized. The worldwide incidence of sepsis is estimated to be 18 million cases per year.

There are of course road deaths in their thousands too. They might get a mention in the media.

Nearly 19,000 people die each year from prescription opioid overdoses.  

Then there are deaths from errors in hospital. We mostly never hear of them at all.

However, in 1999, Americans learned that 98,000 people were dying every year from preventable errors in hospitals. That came from a widely touted analysis by the Institute of Medicine (IOM) called To Err Is Human. This was the “Silent Spring” of the health care world, grabbing headlines for revealing a serious and deadly problem that required policy and action.

As it turns out, according to some, those were the good old days.

According to a new study just out from the prestigious Journal of Patient Safety, four times as many people die from preventable medical errors than we thought, as many as 440,000 a year.

http://www.forbes.com/sites/leahbind...-in-hospitals/ Leah Binder 9/23/2013

And they are not killed by terrorists either.

With innovations in research techniques led by Dr. David Classen, the Institute for Healthcare Improvement and others, there are more tools to tell us where the bodies are buried.

Medical errors now claim the spot as the third leading cause of death in the United States.

They are burying a population the size of Miami every year from medical errors that can be prevented.

In Australia the keep their cards close to their chests. (They probably do in the US too but someone takes the time to wrench them away from them. In Australia it’s mostly ‘he said, she said’ journalism: Journalism on the cheap.) The figures are buried with the errors in Australia but by some estimates, as many as 18,000 people die every year as a result of medical error, while 50,000 people suffer a permanent injury.

But there is no systematic collection and linking treatment error data, so it is impossible to know for sure how many medical mistakes cause serious harm or death. This is a lot greater than the 1200 or so road fatalities but we never hear of it.

Deaths from Asbestos and Mesothelioma

Australia's high incidence of mesothelioma corresponds with the country's extensive history of asbestos use. Experts report that from the 1950s to the 1970s, the country had the highest per capita rate of asbestos use in the world. People were already dying in those years and the mining and manufacturing companies and the government were waiting for them to die out so as not to pay compensation.

Asbestosis is a chronic lung disease characterized by a scarring of lung tissues, which leads to long-term breathing complications. The disease does not have a cure.

More than 13,000 U.S. asbestosis deaths were recorded from 1995-2004. However, many people who get asbestosis die from a related disease, sometimes lung cancer or mesothelioma.

From 1999 to 2010, 29,639 people in the United States died of mesothelioma. The number of deaths rose from 2,342 in 1999 to 2,573 in 2010, an increase of 231 deaths.

The Australian Mesothelioma Registry concludes that 551 Australians died from mesothelioma in 2007, the most recent public accounting of the disease.

A study of 600 mesothelioma patients in the UK and Australia revealed that 1 in 10 retired carpenters born prior to 1950 would die of asbestos-related cancer.

The number of mesothelioma cases in the country is expected to reach 18,000, according to the Australian Institute of Health and Welfare.

Now it has been discovered that As many as 1,000 Queensland coal workers could have black lung, claims union.

Black lung was not eradicated, it was 'covered up'

In 1984, a Government survey identified 75 confirmed or suspected cases of black lung amongst the state's underground coal miners.

When Tony Abbott was the Minister for Health, the dying asbestos disease sufferer Bernie Banton obtained a petition containing 17,000 signatures of those who supported the listing of the mesothelioma drug Alimta on the Pharmaceutical Benefits Scheme. This petition was to be presented in person to Tony Abbott. If it wasn’t disrespectful enough to snub the petition, refusing to meet him even though it was an arranged meeting, then his verbal response certainly was.

 “It was a stunt,” Mr Abbott said on the Nine Network.

“I know Bernie is very sick, but just because a person is sick doesn’t necessarily mean that he is pure of heart in all things.”

He had no compassion as Health Minister. But they are all without compassion. It’s in their DNA. Take Julie Bishop as another example.

In the 1980s, working under her married name Julie Gillon, Bishop was deeply involved in some of Slater & Gordon's biggest asbestos cases.

Lawyer Peter Gordon told Australian Doctor Magazine in 2007: ‘We had to fight even for the right of dying cancer victims to get a speedy trial. I recall sitting in the WA Supreme Court in an interlocutory hearing for the test cases involving Wittenoom miners Mr Peter Heys and Mr Tim Barrow. CSR was represented by Ms Julie Bishop (then Julie Gillon). (She) was rhetorically asking the court why workers should be entitled to jump court queues just because they were dying.’

Julie Bishop represented the mine owners, and defends her role “As one of the lawyers in the case, I acted ethically and professionally at all times in accordance with client instructions.” (Source: Chronic asbestos deaths, sudden mining disasters – both indicate deep corporate problems).

And yes despite claims to the contrary lawyers can choose their clients.

Attack on Our Civil Liberties

After running one of the most secretive, closed governments (as opposed to the promised open and honest) it’s quite funny that now it seems almost every rock has been lifted to reveal potential criminals underneath them. The authority of a government over its people is accommodated and strengthened by its supposed necessity to protect them. Patriotic nationalism doesn’t escape any side of politics. Because of this there has been a breathtaking attack on the security of every man, woman and child in Australia with the recent mandatory data retention laws.

The Government is conducting unprecedented surveillance, with increased intelligence powers and interceptions of online communications. Prominent whistle-blowers world-wide demonstrate that governments and corporations are now intercepting, retaining and using more of our private information than ever before.

Abbott was keen to protect everyone from everything, except for those that might actually need it such as workers and their rights. However, in exchange for protecting us he needed to know everything about us and keep it on record. Although it was meant for the period of the so-called terrorist threat there is no sunset clause in the Abbott government's legislation for data retention and the end of Australians' digital privacy.

The phrase, “if you have nothing to hide, you have nothing to fear” is often used in defence of spying and intelligence services.

The origin of the phrase is unclear but it is most famously associated with the Nazi Goebbels who is believed to have used it in 1933. A lot of people who had nothing to hide had plenty to fear from Goebbels.

Voltaire didn’t say, ‘I disapprove of what you say, but I will defend to the death your right to say it.’ And if he did say something like that he would have been referring to being allowed to be critical of government laws and decisions. Freedom of speech is not the freedom to offend anyone and everyone.

But Voltaire did say ‘Those who can make you believe absurdities can make you commit atrocities.’

And he also said ‘The human brain is a complex organ with the wonderful power of enabling man to find reasons for continuing to believe whatever it is that he wants to believe.

What we think of as free speech is no more than what Noam Chomsky famously stated in The Common Good:

'The smart way to keep people passive and obedient is to strictly limit the spectrum of acceptable opinion, but allow very lively debate within that spectrum - even encourage the more critical and dissident views. That gives people the sense that there's free thinking going on, while all the time the presuppositions of the system are being reinforced by the limits put on the range of the debate.'

Despite the rise of social media, some people have substantially more influence over what information is distributed than others.

Police already abuse the immense power they have, but if everyone’s every action were being monitored, and everyone technically violates some obscure law at some time, then punishment becomes purely selective.

Eventually, those in power will essentially have what they need to punish anyone they’d like, whenever they choose, as if there were no rules at all.

As for challenging it in court, in Australia, litigants face paying all court costs if they lose, which can run into millions when battling the government or major corporations. So it seems all we have is the right to remain silent.

In June 2015 there were 1,898,800 public sector employees; meaning the public sector accounted for 16.4% of total jobs. They cannot criticize their employer or speak out without fear of retribution. That in effect muzzles a large percentage of adults which includes teachers, police, and most people in Canberra.

‘Freedom of speech’ is not the ability to insult and offend whosoever we choose. Freedom of Speech is about the freedom to be critical of a Government without retribution. This government has chosen to keep the people who elected it in witlessness and ignorance.

Morrison and now Dutton keeps telling us ‘we don’t comment on operational matters’. ‘We don’t comment on “on water” matters’. So therefore we can’t be critical of what we don’t know only that we don’t know it. They have managed to stonewall every attempt to release information to the very people who they were elected to serve.

There is little or no access to investigate the conditions in the Australian immigration detention facilities which comprise a number of different facilities throughout Australia and offshore. They are manned under contract, for a profit, under contract from the Department of Immigration and Border Protection.

The government attitude is ‘You elected us in good faith and now we have decided to run amuck and you can’t do a thing about it.’ ‘If we can bring down the ability of the working class to partake in collective bargaining and remove funding from the Labor opposition but not from ourselves we are home and hosed’ is their attitude. ‘Oh! And by the way we have to data retention laws in place, so we can track you down and you will have done something we can pursue you on.’

Who Would Be Most Affected By the GST?

The lowest twenty percent of course!

The government says it is a fair tax because everyone pays their share, this is not true. Businesses or individuals, who are registered for the GST, claim most, if not all of their GST back, claiming it as a business cost.

The GST is a regressive tax that imposes a greater burden on the poor than on the rich. It reduces the tax burden of the well to do (people of higher ability to pay) so it shifts the burden disproportionately to the needy.

Unions

Martin Niemöller was a Protestant pastor who emerged as an outspoken public critic of Adolf Hitler and spent the last seven years of Nazi rule in concentration camps.

Niemöller is perhaps best remembered for the quotation:

First they came for the Socialists, and I did not speak out—
Because I was not a Socialist.

Then they came for the Trade Unionists, and I did not speak out—
Because I was not a Trade Unionist.

Then they came for the Jews, and I did not speak out—
Because I was not a Jew.

Then they came for me—and there was no one left to speak for me

 

The unions are the nemesis of the Conservatives and always have been.

The Liberals in all their guises since federation have existed only to oppose organised labour movements. They have never had plans or policy to progress the nation because their only purpose is to do the bidding of a select few to the detriment of the great majority. The fact that so often they have convinced the majority to vote against their best interests says that either the Liberals are exceptional sales people or that collectively Australians aren't very smart.

They are parasites, but in their greed, they are killing their host. Not just society, that they make ever more unequal, unjust and vicious, but the Earth itself, which they are rapidly making uninhabitable for our species.

CFMEU officials John Setka and Shaun Reardon charged with blackmail by royal commission taskforce.  

News of the arrests was splashed across the front pages of newspapers around the country in a clear attempt to legitimise this unprecedented move and intimidate workers with the prospect of criminal charges for striking or taking any other form of action against employers.

Possible criminal charges against Setka and Reardon were first mooted by the federal Liberal-National government’s trade union royal commission last December. The police laid the charges a year later despite a blackmail charge against CFMEU official John Lomax being dropped on legal grounds in Canberra two months ago.

However, Hockey wasn’t charged with blackmail or even petulance ‘If I was going to stay it'd be overwhelmingly about getting even with people that brought me down.’

Or fraud as in: Was Joe Hockey taken for a ride? The taxi driver, Cabcharge dockets and secret investigation.

The man whose troubled term in office ended in ignominy after colleagues grew tired of the lapses of judgment, and an ill-advised defamation claim, says he had to leave politics because to stay would have meant getting even with those who brought him down. These are the same people incidentally he will now be reporting too: Julie Bishop and Malcolm Turnbull.

Turnbull now says "Joe is a great Australian" and that he will be perfect because has extensive contacts in the US. This commendation should be seen for what it is. After all, he has recently described Tony Abbott as "a great prime minister", raising the obvious question, why roll him?

As political flame-outs go, Hockey's was pretty remarkable. Not so long ago he was regarded as future prime minister material. In the first six months of the Abbott government, the new treasurer was seen as the policy spine in a show that, amazingly, was already showing signs of drift.

According to Nicky Sava in her book “The Road to Ruin” Hockey just read the budget it was compiled by Tony Shepherd and others of his right-wing ilk.

In the 2014 Budget, Abbott and Hockey tried to blackmail the states into a GST hike by abandoning $80 billion in promised funding for our schools and hospitals. This Friday they could get their wish.

Decline in union membership

22 Jul 2015, by Owen Tudor in Economics

Through gritted teeth, the International Monetary Fund (IMF) has this week issued a ‘staff discussion note’ which contains a bit of a bombshell. The ballooning inequality that results from rampaging top people’s pay is not, as previously thought, an unfortunate by-product of technological process or increasing world trade. At least forty percent of the increase in bosses’ pay is down to the decline in union influence. And a further increase in inequality results from reductions in the level of minimum wages. Who could have guessed it?

According to their results the decline of union density explains on average 40 percent of the increase of the top 10 percent income share over the period under consideration (broadly, 1980-2010.) And it’s worth remembering that the IMF considers such inequality to be a pretty bad thing.

There are two key ways in which lower union density has allowed top people’s remuneration to leap ahead of the rest of the workforce. Firstly, and obviously to anyone but an economist, if unions are less able to secure wage rises for the mass of the workforce, there is more left over for the people at the top. Wage restraint for one group of stakeholders in a company means a blowout for the people at the top – again, who’d have thunk it?

Secondly, although much more difficult to quantify, the researchers accept that weaker unions mean that the political pressure for more redistributive action – such as progressive taxation, stronger public services, higher benefits for the unemployed and disabled and so on – is reduced. Rich people get to keep more of their income because unions are less able to press governments to take it and use it for measures which benefit the mass of the people.

The democracy effect

Inequality is not the only adverse outcome of a weakened union movement. The IMF authors also conclude (reasonably enough) that decline in union membership has led to unions having less influence on public policy. That has led to a lower real minimum wage, weaker unemployment benefits and weaker employment protection laws.

The IMF’s Jaumotte and Osorio Buitron cite Nobel Prize-winner Joseph Stiglitz’s work, which shows that highly concentrated wealth allows top earners to, in their words:

'... manipulate the economic and political system in their favour.'

To put it more plainly: the rules are rigged.

The evidence for that is all around us. The very wealthiest have captured a much larger share of national income in recent decades. They have also, as a Princeton study shows, been able to dictate our national political agenda with little or no regard for what the majority wants.

In Australia non Union members get the benefits that the union negotiates on behalf of its members. Therefore some workers feel they can save money by not belonging to a union. Here is a recent example of the perseverance of a Union against the state government in Victoria where the vast majority of Victoria's 50,000 teachers are forced by the Department of Education to lease laptops for use in the classroom, with the money coming directly out of their pay. http://www.abc.net.au/news/2015-11-07/teachers-may-be-repaid-millions-over-department-laptop-scheme/6921128

Earlier this year, the Liberal Party produced a three and a half minute anti-Labor TV ad accusing Opposition leader Bill Shorten of corruption. The ad used documents and footage generated by the Trade Union Royal Commission (TURC), which this month cleared Shorten. The ad, however, is still online.

The unions have always been the mortal enemies of the Conservative Governments and because unions have been so successful in the past at getting the average employee such improved living standards that people have forgotten that not so long ago our grandparents were living in a time of exploitation of workers, when there was no minimum wage, no sick pay, no unemployment benefits, no annual leave, and no legislative protection of any kind for employees.

There was even a time when sumptuary laws were even introduced to prevent the common people from imitating the appearance of aristocrats. Sumptuary laws dictated what colour and type of clothing were allowed to be worn by people of various ranks or incomes to ensure that people did not dress ‘above their station’

During the early days of the industrial revolution, children were chained to machines and beaten when their production dropped off. Children wounded and crippled in the factories were turned out without compensation of any kind and left to die of their injuries.

Women worked down in coal mines, almost naked, for a pitiful wage, often giving birth to children when surprised by the pains of parturition amidst the darkness and gloom of their places of employment; little boys and girls were employed drawing heavy hutches (wagons) of coal along the pit-floors by means of a strap around their bodies and passing through between their little legs; in cotton factories little tots of eight, seven, and even six years of age of both sexes were kept attending machinery, being hired like slaves from workhouses for that purpose, and worked twelve, fourteen, and even sixteen hours per day, living, sleeping, and working under conditions which caused them to die off as with a plague; in pottery works, bakeshops, clothing factories and workrooms the overwork and unhealthy conditions of employment led to such suffering and degradation and shortening of life that the very existence of the working-class was endangered. In the agricultural districts the sufferings of the poor were so terrible that the English agricultural labourer – the most stolidly patient, unimaginative person on the face of the earth – broke out into riots, machine-breaking, and hay-rick burning.

…So great was the distress, so brutal the laws, and so hopelessly desperate the labourers, that in the Special Assize held at Winchester in December, 1830, no less than three hundred prisoners were put upon trial, a great number of whom were sentenced to death. Of the number so condemned, six were actually hanged, twenty transported for life, and the rest for smaller periods. We are told in the English Via Dolorosa, of William Heath, that “a child of fourteen had sentence of death recorded against him; and two brothers, one twenty, the other nineteen, were ruthlessly hanged on Penenden Heath, whither they were escorted by a regiment of Scots Greys.”

The dreadful conditions that the working classes endured, in what was little more than our grandfather’s time, has, for the most part, been forgotten today in the western world. Children started working before the age of twelve. The first cotton spinning machines were so small that children were the most suitable to operate them. Because mills were small owners looked for children between the ages of six and twelve.

Poverty is not pervasive anymore due to the inception of the welfare state and the work of trade unions. The benefits, entrenched in our society after long years of fighting for workers privileges, mean that now most people imagine that these rights always existed. It would be necessary to go to impoverished third-world countries to have something with which to compare the conditions of that period.

‘The Condition of the Working Class in England’ is the best known work of Engels, and still in many ways the best study of the working class in Victorian England. As Engels was sent to England by his father to look at factories, his attention was drawn to the absolute poverty of the workers, their terrible working conditions and the brutality of capitalism. Engels believed that conditions were so bad that a working class uprising must take place in Britain. And they would have had their uprising if not for the fierce punishment meted out to anyone who dared raise his or her head in search of better conditions for the working poor. Engel’s whole view can be summed up in this quote,

‘Here men regard their fellows not as human beings, but as pawns in the struggle for existence. Everyone exploits his neighbour with the result that the stronger tramples the weaker under foot. The strongest of all, a tiny group of capitalists, monopolize everything, while the weakest, who are in the vast majority, succumb to the most abject poverty.’

From this Website

Let's get one thing straight...

Employers and Corporations did not feel generous and decide to give you two days off every week to have a social/personal life. (We now call them weekends). Corporations did not just feel like being nice one day and give their employees paid vacations. CEOs didn't get together in a board room and say "Let's give our employees more rights at work" or "Maybe there should be laws to limit our power over an employee".

Virtually ALL the benefits you have at work, whether you work in the public or private sector, all of the benefits and rights you enjoy every day are there because unions fought hard and long for them against big business who did everything they could to prevent giving you your rights. Many union leaders and members even lost their lives for things we take for granted today.

The right-wing attack on unions is nothing more than ignorance, lack of education, and propaganda.

If republicans would rather support corporations instead of organized groups of workers working to secure a fair work environment A.K.A a union, I ask them to walk the walk as well. Give up every benefit and right that you use that unions are responsible for.

Complete trust and submit yourself to the corporate agenda you fight for. Play by their rules with no influence from democrats or labour unions to try to force rights among the workers of this country. Dedicate your life to their life goal of making your company more money than the year before. Just understand that this may mean sacrificing the union fought rights you enjoy everyday. I mean, you don't want to be a hypocrite, do you? Like bashing unions on your union fought lunch break? Which means if you practice what you preach, you don't get a lunch break.

Corporations use to work employees 80+ hours a week, offer no breaks, hire children, offer horrid, unsanitary work conditions, paid literally next to nothing, and even murder. Not murder with a pen like they do today, but actual murder. They basically did whatever they wanted.

This is what they were like before unions. Don't take my word for it, look it up. (Links at bottom of page). If we rid the world of unions tomorrow, who is to say that they won't go right back to the way they were merely 70 years ago? The GOP governor of Maine signed a bill to repeal child labor laws this year, maybe they are going back to their roots whether we have unions or not.

So conservatives please practice what you preach and give up all these rights and leave the umbrella of these laws for they were brought to you by unions...

36 Reasons Why You Should Thank a Union

Weekends
All Breaks at Work, including your Lunch Breaks
Paid Vacation
FMLA
Sick Leave
Social Security
Minimum Wage
Civil Rights Act/Title VII (Prohibits Employer Discrimination)
8-Hour Work Day
Overtime Pay
Child Labor Laws
Occupational Safety & Health Act (OSHA)
40 Hour Work Week
Worker's Compensation (Worker's Comp)
Unemployment Insurance
Pensions
Workplace Safety Standards and Regulations
Employer Health Care Insurance
Collective Bargaining Rights for Employees
Wrongful Termination Laws
Age Discrimination in Employment Act of 1967
Whistleblower Protection Laws
Employee Polygraph Protect Act (Prohibits Employer from using a lie detector test on an employee)
Veteran's Employment and Training Services (VETS)
Compensation increases and Evaluations (Raises)
Sexual Harassment Laws
Americans With Disabilities Act (ADA)
Holiday Pay
Employer Dental, Life, and Vision Insurance
Privacy Rights
Pregnancy and Parental Leave
Military Leave
The Right to Strike
Public Education for Children
Equal Pay Acts of 1963 & 2011 (Requires employers pay men and women equally for the same amount of work)
Laws Ending Sweatshops in the United States

So will conservatives give up all 36 of these union fought rights? Will they stand by their rhetoric that unions are thugs and refuse to take benefits from these "thugs" or will they hypocritically carry on the diatribe that unions are ruining this country while enjoying their weekends and paid vacations?

Or...

Maybe they could just admit that while not perfect, like anything else, unions have done great things for working people that they use and benefit from every day of their lives?

Maybe a conservative union-hating family got to have some of the best moments of their lives while on vacation from work, and they still got to come to a job still there waiting for them, because of unions?

Maybe a conservative can't wait for their lunch break at work so they can turn on the radio and listen to Rush Limbaugh and Glenn Back talk about how horrible unions are?

If you don't want to give up all your union fought rights and benefits at work, I understand. I don't want to either, that's why I'm pro-union and vote Democrat.

https://www.unionplus.org/about/labor-unions/36-reasons-thank-union

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