Federal Budget 2011 Preview

The Federal Member for Page prepares the ground for tonight’s Australian Federal Government Budget Speech on ABC TV at 7.30pm

MEDIA RELEASE

Budget Preview

The Federal Budget will be brought down in Canberra tonight, and there is much speculation in the media about what might or might not be in it.

Page MP Janelle Saffin said the Budget will be well targeted to support those who need it most.

“This Budget has to address the dual challenges of lower revenues due to natural disasters and a patchwork economy where some sectors are still weak, and the price pressures caused by the massive mining boom which is gearing up again.

“The Budget will get us back in the black, get more Australians in jobs and spread the opportunities of the mining boom.

“Already we have had a number of pre-budget announcements of benefit to our region including almost $1 million extra for the Our House patient accommodation near Lismore Base Hospital. Health is always my top priority and I have been lobbying the Health Minister Nicola Roxon for health funding for our region and will be keen to see the health announcements in the Budget.

“In roads funding I can confirm that the Budget will include $62 million to start work on duplication a five-kilometre stretch of highway at Devils Pulpit State Forest (south of the Tabbimobile floodways) this financial year 2011-12.

“There is also $554.1 million in the Budget for duplicating 17.3 kilometres of the Pacific Highway between Tintenbar and Ewingsdale. This starts on the border of my electorate and will be of great interest to local motorists who regularly commute north on the highway,”

“The Budget will include $54.9 million to secure the Rural Financial Counselling Service over the next four years. I strongly lobbied Agriculture Minister Senator Joe Ludwig for this funding to continue, because of the invaluable service the Casino-based RFCS provides to farmers and rural communities in northern NSW.

“I am delighted to see that former Prisoners of War living in Page will receive a long-awaited special supplement of $500 a fortnight in recognition of their service and sacrifice in POW camps during the Second World War and the Korean War.”

Other Budget measures that will be of significant benefit to local people include the increase in the Family Tax Benefit Part A for families with teenagers.

“This is something I had lobbied for since I was first elected, because many local families were disadvantaged by the system where FTB payments were drastically cut when their son or daughter turned 16, while the costs of caring for their teenage child had not reduced.

“The changes in the Budget will mean an increase of up over $4000 for some families with 16 to 19 year olds attending school or vocational training. In Page there are about 5,900 families receiving FTB A who have children turning 16 in the next five years.

“There will be changes to the Low Income Tax Offset , increasing the proportion of the offset that is delivered in week to week pay packets from 50 to 70 per cent, so low income earners are taxed less during the year.

“This means a bit more money through the year to help with cost of living pressures, instead of waiting for it at end of financial year.

“And Budget measures for small business will include an instant tax write-off for the first $5000 of any motor vehicle purchased from 2012-13.

“The Government will continue to address skill shortages, with $281 million for additional tax free payments to encourage apprentices in critical trades to complete their qualifications.

“The $1700 Trades Apprentice Income Bonus is expected to support an extra 200,000 trade apprentices over four years in skills shortage occupations.

“This apprentice bonus scheme has been popular in the Page electorate and I am pleased to see this system of training bonuses continue to support our apprentices in completing their training.

Janelle Saffin MP
Member for Page
Tuesday 10 May, 2011

Advance Australia the Plastic

I was having a yarn with a local shopkeeper the other day when he remarked that most of his over-the-counter sales involved plastic.
I was rather surprised, being addicted to the feel of a roll of readies myself, but it was an observation borne out by the Australian Crime Commission’s latest report this year:

“Card transactions have continued to increase substantially over the past decade.
For example, during that period credit card transactions have increased from 42.8 million to 118.8 million per month.
Australians spend A$17.8 billion per month on credit cards and A$11.3 billion per month on EFTPOS transactions, and they withdraw A$12.4 billion per month from ATMs……
More than 657 000 cases of card fraud on Australian issued credit and debit cards were reported in Australia during 2009.
The value of credit card fraud was estimated at 57.15 cents per $1000 transacted in 2009. The value of debit card fraud during that year was estimated at 9.43 cents per $1000 transacted.”

Saffin on the attack over those bank interest rate hikes

The big banks close ranks over rates
Image: Herald-Sun 13 November 2010

In the wake of the financial feeding frenzy as big banks raise interests rates between 10 to 20 basis points above the recent Australian Reserve Bank increase of 0.25 per cent (affecting an estimated 80 per cent of homeowners), Federal Labor Member for Page Janelle Saffin sent out this media release which would appear to accurately reflect the mood of many people living on the NSW North Coast:

Page MP Janelle Saffin has joined the attack on the Commonwealth, NAB and ANZ banks for raising interest rates above and beyond moves by the Reserve Bank.

“The time is not right and mortgage holders rightly feel ripped off.

The banks have a guaranteed profit making business, with less risk than our small businesses and family operated businesses but pay their executives at the top levels as though they are running really risky businesses.

The grab these higher fees and yet they provide us with the most basic services.

It is time the big banks were held to account.

Our banks came out of the global financial crisis strong, and there is no justification for moving interest rates above Reserve Bank rates.

Local customers are tired of the arrogant way the banks treat them.

“This is yet another case of the big banks putting profits before their customers and before the community’s standards,” Ms Saffin said.

“It is because of this arrogance that so many people turn to the community-based banks and credit unions.”

Bank finances in pictures to compare with the Commonwealth Bank's overblown rhetoric

With Commonwealth Bank CEO Norris (of the $16M salary package) currently defending that bank's blatant cash grab when it raised its loan rate 45 points on the back of the latest official interest rate rise of 25 points, perhaps it's time to look at what The Reserve Bank of Australia had to say on domestic financial markets in November 2010:

The average cost of the major banks’ long-term
funding continues to rise as maturities are rolled over
at higher spreads. However, in recent months, this has
been largely offset by the narrowing in the spread
between bank bills and OIS rates. Overall, this suggests
that, in aggregate, the major banks’ funding costs are
likely to have been little changed over recent months,
though trends differ for individual banks depending
on their mix of funding.

In terms of net interest margins, banks have recently
reported mixed results; most have experienced a small
decrease in margins, though some have experienced
a small increase. In aggregate, the net interest margin
of the major banks has fluctuated in a relatively narrow
range since 2004, between 2¼ and 2½ percentage
points......

Financials’ profits rose by 10 per cent, largely as a result

of lower bad and doubtful debt charges and an increase in net
interest income.

UPDATE:

Commonwealth Bank chief executive Sir Ralph Norris has conceded his bank's 0.45 per cent interest rate hike will cost some of his customers their homes, a reality he says troubles him.
But in defence of his bank's Melbourne Cup Day hike, Sir Ralph said it was better to see "a few" foreclosures than have an economy hamstrung by a low-profit banking system.

Read more in The Courier Mail here.

Hockey one, hockey two, hockey three.....

Poor Uncle Joe. It felt so right when he practiced his indignation in front of the bathroom mirror, but then it all started to unravel after the Australian Industry Group’s national forum wound down.
First his fearless leader publicly failed to support him – not once but thrice.”
“Back home on the political front today, the spotlight was on the Opposition after Coalition Leader Tony Abbott declined three times to back his Shadow Treasurer's nine-point plan for a more competitive banking system before finally rectifying the matter.”
Then the banks began to bite back at his 9 Point Banking Plan. With “populism” being the kindest term used for his wish list.
Finally Joe fronts the cameras and tells the world that the Federal Treasurer agreed with him in Parliament, but neglected to point out that it was Graham Samuels with whom Swan was agreeing.
Joe obviously forgets that both Hansard and Open Australia have the exchange word for word
And I was actually beginning to feel for the bloke – until that pork pie on national television.

That's the Ocker spirit!

"AUSTRALIANS drank less beer, smoked fewer cigarettes and left the car in the garage more often during the global financial crisis.
Figures contained in final Budget figures for the past financial year reveal the nation tightened its collective belt amid the fiscal gloom."

Seems we're a hardy lot when the chips are down according to the Final Budget Outcome 2009-10.

The Federal Treasurer is skiting that "international credit ratings agency Standard & Poor's said Australia has "exceptionally strong public sector finances even among the 'AAA' rated sovereigns" and Tony Teh Wrecker is not saying much on the subject at all.

Last Friday also saw Treasury release redacted versions of the Red Book for those interested in doing a bit of trawling:

In light of the public interest in the Incoming Government Brief for a returned Labor Government (the so-called Red Book) and consistent with the policy intent that material be published where there is a general interest in its contents, the Treasury has decided to publish the information released under the Freedom of Information Act 1982 (the Act) in relation to the Red Book. Also published is the Treasury’s brief providing an overview of the Treasury portfolio and the related support services (referred to as the administration brief).

Treasury Incoming Government Brief - Red Book - Redacted - Part 1
3,482.31kb
Treasury Incoming Government Brief - Red Book - Redacted - Part 2
3,354.36kb
Treasury Incoming Government Brief - Red Book - Redacted - Part 3
1,461.28kb
Treasury Incoming Government Brief - Red Book - Redacted - Part 4
3,805.27kb
Treasury - Administration Brief - Red Book 572.75kb

WHK Horwath has verified Abbott & Co policy costings? G'arn!

Doesn't bluddy bode well. One of the only concrete things Abbott and Co actually do in the middle of all their campaign spin is to sidestep the Australian Treasury and contract the frequently rebranded accounting firm WHK Horwath (which is a listed company and the member firm representing Crowe Horwath International throughout Australia and New Zealand) to run a calculator over their policy costings.
"We aim to establish strong relationships with our clients, becoming an integral part of their organisation, adding value every step of the way through our proactive approach and driving their success." sez Horwath.
Gawd, I 'opes not!
In 2006 as Horwath & Horwath this company settled a claim "made in respect of 6 audits conducted by Horwath & Horwath as well as in relation to the preparation and verification of various financial reports pursuant to certain provisions of the trust deed. In particular the claim relates to the way Horwath & Horwath reported on, and failed to conclude that the provision for bad and doubtful debts in Geneva's financial statements was materially understated. It also concerns their failure to report on how Geneva did not have in place and maintain a satisfactory system of internal controls, as a result of which it followed poor lending practices."
And in its current manifestation it's into online footy tipping!
In 2010 WHK as it's now known may have agreed to honestly report on Coalition costings, but really, what in earth was it thinking to land the accountancy group in the middle of this particular political pottage.

Stimulus package debate - so who do you believe?

Still wondering if Tony Abbott and Co are right about the Rudd-Gillard Government stimulus packages?
This might assist..........

On ABC TV Q&A Opposition last night Leader Tony Abbott said this:

Well, again, it's horses for courses and don't expect miracles. Now, if spending was the sure fire answer to any problem like this, why is it that the Americans are in recession? Why is it that the British have been in a recession, because their stimulus packages were roughly the same as ours and it didn't work? What got us through the global financial crisis was not fundamentally the stimulus package. It was fundamentally the strength of our economy and I've got to say that that owes far more to the reforms of previous governments, including the Hawke Keating Government, than it does to the spending spree of the current one.

Yesterday John Quiggin also published this:

An Open Letter

We the undersigned economists are convinced by the evidence that the coordinated policies of the Australian Labor Government have prevented the Australian economy from a deep recession and prevented a massive increase in unemployment. Unlike most OECD economies we have come out of the Global Financial Crisis and the subsequent world recession with only one quarter of negative GDP growth and a smaller increase in unemployment.

We note that during a recession automatic stabilizers (increase in total unemployment benefit payments and decreased tax revenues) lead to an increased government budget deficit. In almost all the OECD countries there has been a massive increase in unemployment and in budget deficits. In Australia both have been trivial by comparison.

The Government Fiscal Stimulus package that was introduced was carefully crafted and implemented in a clever sequence. The first stage, the payment of $900 to most households, helped to boost confidence in the retail industry.

The second stage of the stimulus package (the Building Education Revolution, and the First Home Owners Grant) boosted the construction industry and created thousands of new jobs. Besides the employment effect, it also provided a much needed increase in the stock of public capital (better and greener homes, better schools) and prevented a sudden fall in house prices.

The last stage of the fiscal stimulus package (as it takes time to prepare plans etc.) was the infrastructure program that increased employment as well as increasing the stock of public capital and helping to overcome the significant short fall in Australian public infrastructure, and hence would increase future productivity, taxable capacity and the ability to repay public debt.

Just as a major corporation goes into debt to invest in its stock of capital, so does a government. Just as many householders have a debt to a bank or mortgage company, so does a government. A government has a budget deficit and a government debt, but it also has capital assets (roads, ports, better equipped schools, Broadband, etc.).

The performance of the Australian economy has been outstanding: the International Monetary Fund (IMF) and the Organisation for the Economic Cooperation and Development (OECD) have show-cased Australia as a model economy.

We hope that the economic achievements of the Australian Labor Government will be recognized by the population.

Signed by:

P.N. (Raja) Junankar Emeritus Professor UWS, UNSW, and IZA

G. C. Harcourt Emeritus Professor UNSW and Jesus College, Cambridge

Peter Kriesler Associate Professor UNSW

John Nevile Emeritus Professor UNSW

George Argyrous Senior Lecturer University Of New South Wales

Harry Bloch Professor Curtin University

Tony Bryant Associate Professor Macquarie University

John Buchanan Director, Workplace Research Centre University of Sydney

Jerry Courvisanos Associate Professor University of Ballarat

Mamta B Chowdhury Senior Lecturer University of Western Sydney

Barrie Dyster Senior Lecturer University Of New South Wales

Corrado Di Guilmi Post Doctoral Research Fellow University of Technology

Geoff Dow Reader The University of Queensland

Steve Dowrick Professor Australian National University

Chris Evans Professor University Of New South Wales

Peter E. Earl Associate Professor University of Queensland

Craig Freedman Associate Professor Macquarie University

Giuseppe Fontana Professor of Monetary Economics LUBS - University of Leeds

James Farrell Senior Lecturer University of Western Sydney

Roy Green Dean, Faculty of Business University of Technology

Boyd Hunter Associate Professor/Senior Fellow The Australian National University

Joseph Halevi Senior Lecturer University of Sydney

Neil Hart Senior Lecturer University of Western Sydney

Sasha Holley PhD student University of Sydney

Michael Johnson Associate Professor University Of New South Wales

Steve Keen Associate Professor University of Western Sydney

Bill Lucarelli Senior Lecturer University of Western Sydney

Bruce Littleboy Senior Lecturer University of Queensland

Marc Lombard Senior Lecturer Macquarie University

Elisabetta Magnani Associate Professor University Of New South Wales

Fiona Martin Senior Lecturer University Of New South Wales

Girijasankar Mallik Senior Lecturer University of Western Sydney

Robert Marks Visiting Professor University Of New South Wales

Stephane Mahuteau Senior Lecturer Macquarie University

Eddie Oczkowski Professor Charles Sturt University

Brian Pinkstone Associate Professor University of Western Sydney

John Quiggin Australian Research Council Federation Fellow, University of Queensland

B. Bhaskara (Bill) Rao Professor University of Western Sydney

Colin Richardson Visiting Professor of Economics Imperial College, London

Tim Robinson Professor University of Technology

Frank Stilwell Professor of Political Economy University of Sydney

Ingrid Schraner Senior Lecturer University of Western Sydney

Michael Schneider Honorary Fellow. La Trobe University

Ruhul Salim Associate Professor Curtin University

Chris Terry Associate Professor University of Technology

David Throsby Professor of Economics Macquarie University

Tim Thornton Associate Lecturer La Trobe

Phillip Toner Senior Research Fellow University of Western Sydney

Roger Tonkin Lecturer Macquarie University

Sean Turnell Senior Lecturer Macquarie University

Michael White Senior Lecturer Monash university

Other Signatories

James Arvanitakis Lecturer, Centre for Cultural Research University of Western SydneyNixon Apple Industry and Economic Advisor Australian Manufacturing Workers Union

Grant Belchamber Economist ACTU

Ross Buckley Professor of International Finance Law University Of New South Wales

Brad Crofts National Economist Australian Workers' Union

Rajinder Cullinan Client Services Accountant University Of New South Wales

Sandra Egger Associate Professor Faculty of Law, University of New South Wales

Rolf Gerritsen Professor, School for Social Policy and Research Charles Darwin University

Alan Morris Senior Lecturer University Of New South Wales

George McFarlane Retired Consultant, Sanders & Associates Pty Ltd

Gillian Moon Senior Lecturer University Of New South Wales

John Milfull Emeritus Professor University Of New South Wales

J. F. Pixley Senior Research Fellow Macquarie University

Ben Spies-Butcher Lecturer Macquarie University

Peter Sheldon Associate Professor University Of New South Wales

2010 Election Campaign Day 28 - Abbott puts government savings ahead of jobs

ABC TV "7.30 Report" 10th August 2010:

KERRY O'BRIEN: But you're talking about the big bang spending sprees; the big bang spending spree would have been $20 billion more than your big bang spending spree that Joe Hockey has already acknowledge a Coalition government would have spent. And in fact, if you're fair you would acknowledged that before the global crisis came along, the Rudd Government also delivered a budget that was more than $20 billion in surplus.

TONY ABBOTT: Which they did not deliver a budget. They did not deliver a budget outcome. Sure they told us ...

KERRY O'BRIEN: Because the Global Financial Crisis came along.

TONY ABBOTT: And they started spending like drunken sailors.

KERRY O'BRIEN: As you would have done.

TONY ABBOTT: And the point I make, Kerry, is that $20 billion is a very, very significant outcome.

KERRY O'BRIEN: But when you talk ...

TONY ABBOTT: And getting $20 billion off the bottom line is surely worth doing.

KERRY O'BRIEN: But when you talk about the massive amount of money overall that this country would have been in deficit - or the Government would have been in deficit - $110 billion in revenue that would have happened to you if you'd been in government, plus the $25 to $30 billion that you would have committed to a stimulus program - I mean, is that spending like a drunken - is $25 to $30 billion not spending like a drunken sailor, but $50 billion is

TONY ABBOTT: Well $25 billion! That's quite a lotta money, Kerry!

KERRY O'BRIEN: But at what point do you become a drunken sailor, is what I'm asking?

TONY ABBOTT: What I'm saying is you don't waste money, and this mob wasted ...

KERRY O'BRIEN: 200,000 unemployed.

TONY ABBOTT: ... - they wasted money. It's never right to waste money, and one of the extraordinary things is a prime minister who says a bit of waste is neither here nor there. It is always important to treat the taxpayer dollar with respect.

Clarence Valley Council: when does a précis turn into an attempt to censor and distort?

In response to "So What": the face of not-so-good governance on the NSW North Coast.

The Clarence Valley community is entitled to be concerned in regard to the process adopted by the Clarence Valley Council to reduce public budget submissions to a précis form, then respond to the précis.

It is not unreasonable for our elected council representatives to be pressed for time, so one can understand the beneficial logic behind such process. Unfortunately it has not taken long for Council's unelected bureaucrats to exploit the foibles of this process.

It had been pointed out in previous budget submissions that Grafton came into amalgamation carrying a $1.2m deficit while Maclean came in with a surplus. But I could not find any evidence that Council had ever reconciled that deficit.

It is on public record that Council's rates and service expenditures are calculated on the percentage levels that existed at time of amalgamation. Consequently an unreconciled $1.2m deficit more than likely still exists, undetected and negatively influencing council finances.
Naturally I raised this query in my budget submission.

In its infinite wisdom, administration responded that the deficit had been offset by:-

a) Purchase of sections of Stage 2 Yamba Bypass (est. $1m)
b) Purchase of open space at Townsend (est $216k)

I pointed out in my subsequent budget submission that a) and b) are debts and when paid appreciate in value generating direct/indirect revenues for Council. Therefore a debt cannot reconcile/offset a deficit which is an imbalance in council ledgers and continues until reconciled.

Embarrassed by its faux pas, administration reduced my submission to précis form, to read:-

"Concern that the issue of the GCC bringing a $1.2m deficit into amalgamation while the MSC brought in a surplus has not been adequately answered."

Administration then boldly answered its (misinterpreted) précis:-

"Amalgamation occurred on 25-2-04. This response is written on 21 June 2010 and it is "so what".

These are public monies administration are mismanaging. To properly reconcile this deficit, Grafton rates should have been increased in line with its service expenditures or, its service expenditures should have been reduced in line with its income.
As neither was done, Grafton has continued to live beyond its means at the expense of the rest of the shire.

If these self-serving unelected bureaucrats can be indicted for their inept administration, then they must also stand indicted for their self-indulgent and less than totally frank integrity, ethics and moral values.

Their contemptuous disregard for the community consultation process undermines public confidence and erodes public trust as energetically as it mutilates democracy.

Ray Hunt
Yamba

Guest Speak is a North Coast Voices segment allowing serious or satirical comment from NSW Northern Rivers residents.Email ncvguestpeak at live dot com dot au to submit comment for consideration.

"So what": the face of not-so-good governance on the NSW North Coast

Last weekend a copy of Clarence Valley Council's June 2010 Budget Submissions Summary was doing the digital rounds much to the enjoyment of local cynics.
Of particular note was this answer to one concern raised about the fact that after 6 years council still had not reconciled a $1.2 million deficit brought into the amalgamation process by Grafton City Council: "So what".
But what really had locals opened mouthed was this answer to concerns about lack of transparency and accountability:
"As the 'senior administrator' who recommended that CCRT funding be used for lifesaving services, I (Rob Donges) have taken responsibility for including Iluka and will take responsibility should a higher authority determine that this funding arrangement is grossly negligent or some such thing."
That last line comes after a previous entry which goes:
"LPMA representatives have verbally raised concerns as to the funding of this service from CCRT and staff have provided our reasoning. Nothing more has been heard. If the Authority were to formally advise that the funding is inappropriate, we would recommend it be funded elsewhere i.e. General Fund."
The merry cynics are now laying bets that the Land and Property Mangement Authority won't be amused when it learns that its attempt to informally manage the problem of past misallocations of what could be hundreds of thousands of dollars in Clarence Coast Reserve Trust funds has been seen as something council staff can brush aside - especially as it was a resident's complaint which first brought the matter to light and council management has been very careful not to consult with the NSW Department of Lands itself just in case it wasn't left with anymore wriggle room.
Clarence Coast Reserve Trust Budget 2010/11

Henry Tax Review Final Report: overview and analysis [transcripts]

The long term tax plan we announce today will strengthen the economy and make the tax system fairer and simpler for Australian working families and businesses.
These are the first steps in a 10 year agenda that will help ensure we share prosperity fairly, maximise our opportunities, and keep Australia in the box seat as the global recovery gathers pace.
Australia faces important decisions about how we structure our tax system.
This package is carefully calibrated to make the most of the opportunities presented by commodity boom mark II, but also to address the challenges that it presents.
This is a long term plan to apply a Resource Super Profits tax to the profits earned from resources that are owned by all Australians, and use it to:
generate more superannuation savings for working families;
lower tax for all companies, especially small businesses; and
invest in our future infrastructure needs, particularly for mining states.
Excerpt from Treasurer Wayne Swan's joint press release with Australian Prime Minister Kevin Rudd, 2 May 2010

Rudd Government's intended tax reforms outlined at Stronger-Fairer-Simpler: a tax plan for our future

Henry Tax Review Final Report:

Part 1: Overview	1.0MB
Preface	326KB
Terms of Reference	169KB
Executive summary	213KB
Chapter 1: The need for reform	240KB
Chapter 2: Designing a future tax and transfer system	223KB
Chapter 3: A tax and transfer system for the 21st century	185KB
Chapter 4: Personal taxation	214KB
Chapter 5: Investment and entity taxation	196KB
Chapter 6: Land and resources taxes	184KB
Chapter 7: Taxing consumption	169KB
Chapter 8: Enhancing social and market outcomes	212KB
Chapter 9: The transfer system	209KB
Chapter 10: Institutions, governance and administration	177KB
Chapter 11: Macroeconomic and fiscal impacts	191KB
Chapter 12: List of recommendations	295KB
Appendices
Appendix A: Acronyms	140KB
Appendix B: The Australia's Future Tax System Review Panel	165KB
Appendix C: Documents of the Review	188KB
Appendix D: Consultation	234KB
Appendix E: Research and consultancies	418KB
Appendix F: Secretariat and support	164KB
References	294KB
Glossary	293KB

Final Report: Part 2 - Detailed Analysis - Volume 1

1.9MB

Final Report: Part 2 - Detailed Analysis - Volume 2

2.2MB

Setting the council cat among the ratepayer pigeons in the Clarence Valley

The Daily Examiner reported on 19 March:

CLARENCE Valley residents may be hit with a rate increase of 8.15 per cent next year.
The Minister for Local Government recently announced that all councils could raise their general rate revenue by 2.6 per cent above the current level, but in a bid to raise an additional $1.3 million to finance capital works, Clarence Valley Council is seeking approval to raise rates by an extra 5.55 per cent.
.....the average rate for properties across the Valley varied between minimum and fixed rates and were determined by dollar value....
“It is hard to compare rates between shires because we have 15 different rate structures Valley-wide,”

Mention of a possible rate increase always raises the collective blood pressure of Clarence Valley ratepayers and differences of opinion between the Hinterland and Coast surface.

Clarence Valley Council is expected to run a series of community consultation meetings some time in the future and ratepayers would do well to attend these as well as keep an eye on proceedings as set out below.

Media Release: 17 March 2010

Clarence Valley Rates get a Special Meeting

An Extraordinary Meeting of Clarence Valley Council will be held in Maclean at 5.00 pm Tuesday 23 March 2010.
The single topic for discussion is whether to increase property rates next year to finance specific capital works.
A Workshop held on 16 March and attended by all Councillors and senior Council staff considered aspects of the Council's budget for 2010/11. A report to the Workshop from the Council's General Manager, Stuart McPherson, encouraged consideration of asking the Minister for Local Government, the Hon Barbara Perry MP, for approval to increase general rate revenue by an additional 5.55% in 2010/11. The Minister recently announced that all Councils could raise their general rate revenue by 2.6% above the 2009/10 level.
Mr McPherson reported that an extra 5.55% above the 2.6% increase, would provide an additional $1.3m next year and in subsequent years and would be used for clearly identified additional capital works and programs. These programs were described in Mr McPherson's report as "Main Street Programs", "Public and Community Halls and Libraries", "Town and Village Footpaths and Cycleways", "Rural Roads Improvements" and "Community Recreation Facilities Improvements".
The Extraordinary Meeting is open to the public and attendance is invited.

Authorised by: Stuart McPherson, General Manager 02 6643 0212 or 0429 903 758

Coalition super-duper accountant's obsession with China

Nats senator and Coalition front bencher Barnaby Joyce has become a trifle obsessed with the ol' yellow peril it seems.
If you believe this former Queensland accountant from St. George we're all in danger of being seriously in hock to China, which is coincidentally one of our more significant export markets.
Small problem for Joyce though - China doesn't figure as anywhere near our biggest creditor because that honour is reserved for the UK and US.
Hong Kong (which is China's only representative on the creditor list) holds around 3% of Australia's total foreign debt, but Britain holds in the vicinity of 24% and America 22% of the $114 billion or so red ink still on the books racked up by federal or state governments, financial institutions and private companies.
Less than a quarter of Australia's foreign debt is contractually long term if this Australian Parliament Library 2009 research paper has a good handle on the subject.
Barnaby mentions China so often that it's almost a nervous stutter.
Here is an abbreviated list of his comments on China over the last three years from Hansard and the media:

This is money that people want back. Most of them are from overseas. How much more money do you want to owe to these people? The biggest one being the Communist People's Republic of China.
Under this massive new tax of the Australian Labor Party, they will be signing us up to an agreement as a result of which we will be borrowing money from China to pay the interest to China to send back to China to develop China.

The Labor Party cannot tell you exactly how this tax is going to do anything to the temperature of the globe by itself. They aspire to grab America and China.

We have this ridiculous proposition that if we pass this bill we are going to be borrowing money from China to send back to China to help develop China. We will be borrowing money from China and from Saudi Arabia to send to African despots.

We have no money. We are in debt up to our eyeballs. We will be borrowing money from countries such as China to send back to China to help China develop, when we thought they were already doing a pretty good job at it.

So we will be borrowing money from China to pay back to China to develop?

It has stacked us up with debt to the eyeballs so that we could go out on some spending spree and have the stimulus of the nation spread across the carpet on Christmas Day with 'made in China' written on the back.

I have clearly stated that I have no problems dealing with China—I have no problems with the trade to China. I have clearly stated that over and over again.

When this legislation came forward, there was only one other nation on earth that had legislation like this, and that was the communist People's Republic of China, which I thought was peculiar.

In fact, I stated that the stimulus would be spread across the carpet on Christmas Day with 'Made in China' written on the back of it and that it was a complete and utter waste of money. Time has proven us correct.

We will develop a plant in China. We will develop another plant in the United States. But we're not going over there, because those people are half crazy.

Do we implicitly, by association in legislation, say that ovaries are now commercial property disassociated from the person and as property can be extracted from prisoners in China or aborted foetuses in Australia?

The Australian Government would never be allowed to buy a mine in China. So why would we allow the Chinese Government to buy and control a strategic asset in our country? Stop the Rudd Government from selling Australia.

'The Australian' & Melbourne Institute's Road to Recovery Conference apparently was a doozy

The Melbourne Institute currently has the The Road to Recovery: Restoring Prosperity After the Crisis 5-6th November 2009 conference program (along with speech and presentation downloads) available on its website.
Almost everyone who is anyone in the field of economic and social policy appears to have been there.
Below is a slide that Access Economics put up during the presentation Will the Budget recover alongside the economy?
Now it's been obvious for a while that Chris Richardson loves to craft statements which toss a live one to the meeja, but this is getting a bit over the top even for him:


















Oh, and thanks Malcolm for that universal tweet alerting all us plebs to this conference - from Richardson's power points to your next sound bite I'm guessing.

Local government thin ice pivot, slide and glide on the NSW North Coast

It seems like only yesterday that local government across the nation was up in arms over the constant cost-shifting by state and federal governments, which saw councils being asked to do more and more with less and less.
Indeed there was a formal inquiry into this very subject in 2003.

So I'm somewhat bemused to hear that one NSW North Coast council (which is known to complain about straightened financial circumstances from time to time) is now committed to allocating funding for improvements in a national park for which it has no responsibility, legal or otherwise.

This is the first time I have heard of local government actually encouraging other tiers of government to off-load their own financial obligations onto council ratepayers or council's own coffers. To the tune of a ballpark figure of $22,000+ no less.

So take a bow, Clarence Valley Council, for a dubious Yuraygir National Park coastal walkway decision based on an even more dubious attempt at a trust fund raid.

One has to wonder which councillor (or councillors) is trying to curry favour with either the Rees Labor Government or the Sussex Street mob and, for what purpose?

Surely not pre-selection hopes resurfacing?

Cartoon from Google Images

Anyone else just a mite suspicious of the G20's motives?

The G20 has been around since 1999. It's a group of finance ministers and central bank governors. Many of the same ministers and bankers who sat complacently by while the global financial crisis grew into a tsunami which threatens to widen the gap between the developed and developing world, between rich and poor, between those countries with enough resources to buffer against climate change and those that will simply sink into the ocean or blow away on the wind.
One or two of its members countries have also been on record in the past as wanting to sideline the United Nations as an international forum and decision making body.
I think that the dynamic duo, Kev and Wayne from Nambour, need to be careful here because in this group of twenty they will still be mice in bed with at least two elephants - the USA and the European Union.
Even though Australia is now considered a developed country by those heavies participating in setting G20 policy, the International Monetary Fund and the World Bank; it's still privately rated as something of a wannabee.
When I look at how things went down at Pittsburgh this month I can't help feeling that what I'm really seeing is the international banking and business world shoring up the status quo and trying to kick the UN off the field.

Pic from Financial Axis

Update:
Mungo MacCallum writing over at Crikey believes that the G20 Pittburgh Summit is a true change in the world economic order:
"It is almost impossible to overstate the significance of the events last week in Pittsburgh.
The acceptance by all the major players of the role of the G20 as a rule maker for the conduct of the financial systems of member nations quite literally ushers in a new world economic order.
And this is not some kind of Orwellian nightmare in which a conspiracy of plutocrats (or Jews, or Masons, or Martians) use their might to enslave the wretched of the earth, but a genuine democratisation that directly includes two thirds of the world’s population and indirectly gives a voice to the rest.
The London meeting of the G20 in April proved that the new organisation could actually work; that the diverse array of interests could co-operate in reforms to a system in desperate need of them. Now the process has been formalised and we have a long-overdue representative body with the power and the will to lead the world out of the global economic crisis and towards a better and fairer model of interdependence for the future.
Unsurprisingly, the Australian media have made much of the fact that Australia, as an active member of the club, now has a seat at the top table and this is indeed a cause for rejoicing. But far more important is the part Australia played in its construction, which is a matter for genuine and bipartisan pride."

Leaders Statement from the 2009 G20 Pittsburgh Summit signals new directions or business as usual?

This morning The Pittsburgh Summit released a lengthy Leaders' Statement, the full transcript of which can be found here.
Only a handful of its 50 clauses plus annex dealt with climate change.
In this the G20 (like the G8 before it) fails to live up to the UN's record on climate change, on the day the Australian media reported that it had become the new premier forum for global governance and economic management.

In part the Leaders' Statement reads:

12. Today we agreed:

13. To launch a framework that lays out the policies and the way we act together to generate strong, sustainable and balanced global growth. We need a durable recovery that creates the good jobs our people need.

14. We need to shift from public to private sources of demand, establish a pattern of growth across countries that is more sustainable and balanced, and reduce development imbalances. We pledge to avoid destabilizing booms and busts in asset and credit prices and adopt macroeconomic policies, consistent with price stability, that promote adequate and balanced global demand. We will also make decisive progress on structural reforms that foster private demand and strengthen long-run growth potential.

15. Our Framework for Strong, Sustainable and Balanced Growth is a compact that commits us to work together to assess how our policies fit together, to evaluate whether they are collectively consistent with more sustainable and balanced growth, and to act as necessary to meet our common objectives.

16. To make sure our regulatory system for banks and other financial firms reins in the excesses that led to the crisis. Where reckless behavior and a lack of responsibility led to crisis, we will not allow a return to banking as usual.

17. We committed to act together to raise capital standards, to implement strong international compensation standards aimed at ending practices that lead to excessive risk-taking, to improve the over-the-counter derivatives market and to create more powerful tools to hold large global firms to account for the risks they take. Standards for large global financial firms should be commensurate with the cost of their failure. For all these reforms, we have set for ourselves strict and precise timetables.

18. To reform the global architecture to meet the needs of the 21^st century. After this crisis, critical players need to be at the table and fully vested in our institutions to allow us to cooperate to lay the foundation for strong, sustainable and balanced growth.

19. We designated the G-20 to be the premier forum for our international economic cooperation. We established the Financial Stability Board (FSB) to include major emerging economies and welcome its efforts to coordinate and monitor progress in strengthening financial regulation.

20. We are committed to a shift in International Monetary Fund (IMF) quota share to dynamic emerging markets and developing countries of at least 5% from over-represented countries to under-represented countries using the current quota formula as the basis to work from. Today we have delivered on our promise to contribute over $500 billion to a renewed and expanded IMF New Arrangements to Borrow (NAB).

21. We stressed the importance of adopting a dynamic formula at the World Bank which primarily reflects countries' evolving economic weight and the World Bank's development mission, and that generates an increase of at least 3% of voting power for developing and transition countries, to the benefit of under-represented countries. While recognizing that over-represented countries will make a contribution, it will be important to protect the voting power of the smallest poor countries. We called on the World Bank to play a leading role in responding to problems whose nature requires globally coordinated action, such as climate change and food security, and agreed that the World Bank and the regional development banks should have sufficient resources to address these challenges and fulfill their mandates.

22. To take new steps to increase access to food, fuel and finance among the world's poorest while clamping down on illicit outflows. Steps to reduce the development gap can be a potent driver of global growth.

23. Over four billion people remain undereducated, ill-equipped with capital and technology, and insufficiently integrated into the global economy. We need to work together to make the policy and institutional changes needed to accelerate the convergence of living standards and productivity in developing and emerging economies to the levels of the advanced economies. To start, we call on the World Bank to develop a new trust fund to support the new Food Security Initiative for low-income countries announced last summer. We will increase, on a voluntary basis, funding for programs to bring clean affordable energy to the poorest, such as the Scaling Up Renewable Energy Program.

24. To phase out and rationalize over the medium term inefficient fossil fuel subsidies while providing targeted support for the poorest. Inefficient fossil fuel subsidies encourage wasteful consumption, reduce our energy security, impede investment in clean energy sources and undermine efforts to deal with the threat of climate change.

25. We call on our Energy and Finance Ministers to report to us their implementation strategies and timeline for acting to meet this critical commitment at our next meeting.

26. We will promote energy market transparency and market stability as part of our broader effort to avoid excessive volatility.

27. To maintain our openness and move toward greener, more sustainable growth.

28. We will fight protectionism. We are committed to bringing the Doha Round to a successful conclusion in 2010.

29. We will spare no effort to reach agreement in Copenhagen through the United Nations Framework Convention on Climate Change (UNFCCC) negotiations.

30. We warmly welcome the report by the Chair of the London Summit commissioned at our last meeting and published today.

31. Finally, we agreed to meet in Canada in June 2010 and in Korea in November 2010. We expect to meet annually thereafter and will meet in France in 2011.

* * *
1. We assessed the progress we have made together in addressing the global crisis and agreed to maintain our steps to support economic activity until recovery is assured. We further committed to additional steps to ensure strong, sustainable, and balanced growth, to build a stronger international financial system, to reduce development imbalances, and to modernize our architecture for international economic cooperation.

Clarence Valley Council intends to ask NSW taxpayers to fund a bigger slice of the jetty primarily being built for a privately-owned waterfront hotel

At its ordinary monthly meeting last Tuesday, after a small amount of argy-bargy, Clarence Valley Shire councillors unanimously voted to go ahead and build a jetty in front of Sedgers Reef Hotel at Iluka.

Never mind that the community preferred any new jetty to be sited elsewhere in Iluka Bay, the cost blow-out, a lack of transparency or a growing public perception that Council is doing favours for mates.

Just vote to ask New South Wales taxpayers to fork out all or part the $65,000 plus extra funds required to bring additional customers to the hotel.

For years local government has rightly complained about cost-shifting by the states and Commonwealth and called for this third tier of government to be taken seriously.

On Tuesday Clarence Valley Council voted for a good example of why local government is always a poor second-cousin twice removed; not to be taken too seriously by the rest of the political family.

So if you live elsewhere in New South Wales and are finding it hard to get additional funding for vital infrastructure like health services operating out of the local hospital, extra school sports equipment or that much needed community hall - just remember that Clarence Valley Council may have got into the Rees Government treasury ahead of you so that one North Coast hotelier can have his latest wish fulfilled.

Iluka jetty and pontoon: The Glass House revisited?

Secretary to the Treasury Ken Henry on the good, the bad and the ugly

From Dr. Ken Henry's speech to the Australian Economic Forum on 19 August 2009 concerning the Rudd Government tax review now underway:

"So what does this mean for the panel’s deliberations? As a first step, the panel is considering taxes and transfers on their individual merits, how they sit within the overall architecture of the tax-transfer system, and how they will meet the opportunities and challenges of the future. Importantly, this assessment is being undertaken without regard to the level of government which currently administers that particular tax or transfer.
The Panel’s concern is to ensure that our tax-transfer system is calibrated to emerging challenges and opportunities that arise from things like population ageing, the re-emergence of China and India and continuing technological change.
As part of its enquiry, the panel is assessing how different taxes and transfers rate against the standard policy assessment criteria – fairness, efficiency, simplicity, sustainability and coherence. These criteria will enable us to identify taxes which should be levied, taxes that are so irredeemingly poor that they should be abolished, and taxes that are reformable – the good, the bad and the ugly."