What the tax man saw....

While we wait to find out exactly what is in the Henry Tax Review, the Australian Taxation Office has published its latest statistics which are in a nutshell:

For the 2007–08 income year:

• 14.8 million returns were lodged, an increase of 6.7% from 2006–07
• 12,640,767 individuals lodged tax returns
• individual returns represented 85.2% of all returns lodged
• the proportion of individuals lodging returns using e–tax increased to 17.7%
• $7.7 billion in tax bonus payments were paid to 8.8 million individuals based on their 2007–08 tax return.
• 79.5% of individuals were salary and wage earners
• 13.7% of companies were in the rental, hiring and real estate services industry
• 25.9% of partnerships were in the agriculture, forestry and fishing industry
• 17.8% of trusts were in the rental, hiring and real estate services industry
• trusts experienced the largest growth in the number of returns lodged, with an increase of 8.3% from 2006–07
• individuals accounted for 19.6% of total income, 62.5% of taxable income and 64.4% of net tax
• companies accounted for 76.1% of total income, 26.7% of taxable income and 30.6% of net tax
• super funds accounted for 4.3% of total income, 10.7% of taxable income and 5.0% of net tax
• transfers providing assistance to families and individuals (excluding the one-off tax bonus payment) totalled more than $2.4 billion, a 2.1% decrease from 2006–07.

For the 2008–09 financial year:

• 2.6% fewer fringe benefits tax returns were lodged than in 2007–08
• fringe benefits tax collections totalled $3.4 billion, a decrease of 1.3% from 2007–08
• GST liabilities were $41.5 billion, a decrease of less than 1% from 2007–08
• excise liabilities were $24.3 billion, an increase of 3.1% from 2007–08 liabilities
• liabilities from the wine equalisation tax were $729 million, a 13.2% increase from 2007–08
• luxury car tax liabilities were $376 million, a decrease of 15.9% from 2007–08
• PAYG withholding liabilities were $116.9 billion, an increase of 2.0% from 2007–08
• PAYG instalments were $65.1 billion, a decrease of 7.4% from 2007–08
• During the 2008–09 financial year there were 410,318 self-managed super funds, with a total of 772,300 members.

For those completely spellbound by figures, the complete document and chapter downloads can be found here.

Lack of public facilities such as transport in rural and regional Oz

Last year the local community of ***** (name removed) buried young ****** (name removed).


***** hanged himself out of despair. Centrelink hounded him.

In order to pacify Centrelink ***** drove everywhere to find work, often in an unregistered vehicle as he had not the means to pay for registration.

Individuals like ***** end up driving, often without a licence, and more often in unregistered vehicles. The seeds of criminality begin this way, from despair.

Truth is, this is not an isolated incident.

Over to you Mr Rudd et al.

Source: Read this

Dividing the GST pie in 2010

Just goes to show - if you whinge long enough and hard enough you're bound to be heard.
New South Wales finally gets a slice of the GST pie which begins to reflect the amount of this consumption tax we Welshies pay.
From the Commonwealth Grants Commission media release on 26th February 2010:
"The Commonwealth Grants Commission has released its advice on how GST revenue should be distributed among the States and Territories in 2010-11. .....Under the Commission's recommendations for 2010-11, Victoria and New South Wales, and to a lesser extent Queensland and South Australia, receive larger shares of GST revenue compared to 2009-10, while Western Australia, and to a lesser extent the Northern Territory and the ACT, receive smaller shares. The share of Tasmania would stay unchanged. The Chairman of the Commission, Alan Morris, said, "This review takes into account the significant changes in the fiscal circumstances of the States since the Commission's last review in 2004. At the time of that review, New South Wales and Victoria were fiscally stronger than the other States. While their fiscal capacities are still above average, those of Western Australia and Queensland have strengthened quite dramatically over recent years as a result of strong increases in their revenue raising capacities, principally from mining royalties. The fiscal capacities of these two States are now the strongest. These four States now share the cost of raising the fiscal capacities of the four weaker States to the average. "Fiscal equalisation is designed so that, as a State's own capacity to raise revenue, or its cost of delivering services, diverges from the national average, there are compensating adjustments to its GST revenue", Mr Morris said. "That is what has happened in recent updates, and in this review."

2010 CGC Review final report here.

Dividing the Goods & Services Tax according to Granny Herald:
NSW + $1.07 billion
Victoria + 872 million
Queensland + $545 million
S. Australia + $357 million
Tasmania + $91 million
NT + $78 million
ACT - $30 million
WA - $223 million
SOURCE: GRANTS COMMISSION 2010-2011

When a quote is not a quote in 2010

Tim Lambert posting about climate change denialism reminded me that there are any number of misquotes and absolutely false quotes found on the Internet these days.
Snopes carries examples of some classics which are primarily sourced from America.

However, if one wants to see blatant misquotes and bogus paraphrasing at work in Australia one can do no better than look through Hansard courtesy of Open Australia where complaints about misrepresentation are not uncommon.

This little exchange was set off by that arch word-twister, Tony Abbott:

Tony Abbott (Warringah, Liberal Party, Leader of the Opposition) My question is to the Prime Minister. Does the Prime Minister agree with his finance minister that the Home Insulation Program, which has contributed to the deaths of four Australians, was a program where the government could not be expected to dot the i's and cross the t's?

Anthony Albanese (Grayndler, Australian Labor Party, Leader of the House) Mr Speaker, on a point of order: it is not in order for the Leader of the Opposition to verbal the finance minister in a question. Therefore the premise of the question is incorrect and therefore the question is out of order.

Harry Jenkins (Speaker) The Leader of the House will resume his seat. The chair is not in a position to vouch for the accuracy of quotes contained within questions. On all occasions, these matters are left in the hands of the person that is asking the question, and the remedial action open to any aggrieved party is well known by members of the House.

Lindsay Tanner (Melbourne, Australian Labor Party, Minister for Finance and Deregulation) Mr Speaker, I wish to make a personal explanation.

Harry Jenkins (Speaker) Does the honourable member claim to have been misrepresented?

Lindsay Tanner (Melbourne, Australian Labor Party, Minister for Finance and Deregulation) I do. And it has just been repeated in the most recent statement.

Harry Jenkins (Speaker) Please proceed.

Lindsay Tanner (Melbourne, Australian Labor Party, Minister for Finance and Deregulation) In question time today, the Leader of the Opposition stated that I had said yesterday that the government could not be expected to dot its i's and cross its t's with respect to the administration of the insulation program. As those who are listening might have noted in what was just read out by the member for North Sydney, I was asked a specific question about delaying decisions with regard to the government stimulus matters, and the question related to: why didn't the government deal with issues such as the risk association with metal fasteners at the time it made these decisions? My answer was: these are matters for implementation, rightly to be dealt with by the minister and the department, and this was not a reason for delaying those decisions. So the interpretation that is being placed on my statement by the member for North Sydney and the Leader of the Opposition is totally false.

House of Representatives Hansard transcript for 11 February 2010

Audio of Tanner interview which includes the dotting the i's and crossing the t's quote, courtesy of that excellent resource Malcolm Farnsworth's audio clips.

Greg Hunt's rubbery CPRS figures presented to Parliament

The Opposition's Greg Hunt spoke to the Rudd Government's third reading of the CARBON POLLUTION REDUCTION SCHEME BILL 2010 on Thursday 4 February 2010:

The ABS lists 8.7 million Australian families.

You need to multiply 8.7 million by $1,100.

Multiplying 8.7 million by $1,000 gives $8.7 billion.

You then add another $900 million, let us call it, and

that gives you $9.6 billion. We are still $2 billion short

of making up Mr Rudd's tax. We are assuming that that

component will be met off the bottom line of business,

but if business passes that through it will be more than

$1,100 per family. So remember this: it is the 8.7 million

Australian families who are the ones that have to

make up the $11½ billion. We are giving Mr Rudd the

benefit of the doubt. We are saying that they will only

have to make up $9.6 billion and that business will cop

the other $2 billion and not pass the costs through for

that, but it is likely that it will be higher than $1,100

per family.

If anyone is wondering where Mr. Hunt found his $1,100 figure:

Where do we get the $1100 figure from? It is not
just us. Whether it was the Daily Telegraph in November
on the splash front page '$1100 per family the cost
of Mr Rudd's ETS', whether it was the work of the
Brotherhood of St Lawrence...

Leader of the Opposition Tony Abbott apparently pulled the same number out of the air or from a Google News search (depending on who you believe) after The Daily Telegraph article was published and specifically applied it to middle income families. A fact which Hunt studiously ignores.

If Greg Hunt goes to a newspaper for some of his figures, where did he go to get his $11.5 billion great big tax and is it a per annum number?
We know that this figure is the estimated revenue from the proposed auction of CPRS carbon permits over two years because the Senate Economics Committee told us so in April 2009 and we also know from Frontier Economics that this original estimate is expected to fall under the revised CPRS currently before Parliament, but Hunt appears to be sticking with the original and now out-of-date projections which he insists on calling a tax on families, pensioners and small business.

Of course with this $11.5 billion being spread over two years that would mean that the spurious dollar amount Hunt is implying is an annual figure would have to be cut in half - that's $550 per family each year for the first two years of the emissions trading scheme.

Hunt is also being a trifle elastic when it comes to population numbers and needs to explain why he is distributing this 'tax' across 8.7 million so-called 'families' when he perhaps should be saying 'households'.
The $1,100 reverts to a per household basis in Liberal Senator Simon Birmingham's media release, so Greg Hunt cannot plead ignorance of what his 8.7 million represents.

Perhaps he thinks telling Parliament that it's all about Australian families reads better in Hansard and, after all the suspect $1,100 he is quoting appears to actually apply to middle-income families anyway according to other members of the Liberal Party.

And the $900 million or the Brotherhood of St Laurence and KPMG?
Well Hunt never explains where he drew that $900 million figure from.
While BSL-KPMG documents don't appear to mention the $1,100 per household but placed the additional costs at:

$494 per year additional expenditure for very low income (below $500 week gross income), high energy using households; and $478.40 for low-income (below $1000 per week gross income), high energy using households.

One rather suspects that Messrs. Hunt and Abbott have carefully included in their totals those projected cost of living price rises which are independant of any emissiosn trading scheme.

Rising to one's feet in the House of Representatives and knowingly building a dollar pyramid based on shifting sand is seen by simple folk as lying to Parliament.
Something Greg Hunt should remember before he goes any further.
Tony Abbott will of course totally ignore any parliamentary rules or conventions if it suits his immediate purpose.

Federal election campaign information 2010: Did Australia spend too much averting the worst of the Global Financial Crisis?

All through 2009 we had a preview of one charge that the Coalition parties are going to level at the Rudd Government during the 2010 federal election campaign - that it spent far too much on stimulus packages used to mitigate the worst effects of the Global Financial Crisis.

This great graphic comes via the very astute Peter Martin, who in his turn picked it up from the Harvard Business Review.

Click here to enlarge

As can be easily seen, Australia spent only an estimated 0.1% of its 2008 GDP on economic intervention with no financial 'bail-out' component, which indicates a low level of national economic stress.
Compared to many other OECD countries Australia did rather well and appears to have been the first to bounce back and be considered economically stable again.
Leading the World Bank managing director Juan Jose Daboub to say that Australia can be a model for developing nations struggling to recover from the global financial crisis.

If relatively speaking Australia did not really overspend on its stimulus packages, did it need to spend at all?

Reserve Bank data to date shows that although consumer sentiment is high consumption is still hovering around 1997 levels and, even if the unemployment rate is considerably lower than in the 1990s it still underwent an uncomfortable rise throughout the global financial crisis.

Australian banks may have enjoyed healthy combined-total profits which only decreased momentarily in historical terms, but investment overall took a sharp dip and is only now starting to slowly rise.

Household assets showed a more dramatic version of this dip-rise and household debt as a percentage of disposable income is also not within comfortable limits.

The graph below indicates that Australia was not in an enviable situation after the global financial crisis struck and even with state and federal government stimulus packages there was a falling away of investment spending in sectors which tend to drive economic prosperity.

Conclusion? On balance the Rudd Government (whether by good luck or good management) successfully steered the country through a global crisis.

Streuth Ruth! Abbott's a cobber of the elderly and Rudd's a granny basher?

You've gotta love the boy. Here he is gamely battling for that extra spin by having a go at Rudders and Swanee over the latest Intergenerational Report released yesterday.
Apparently the PM and Treasurer are guilty of elder bashing by pointing out that growing numbers entering retirement are posing a bit of a problem for a national economy which was traditionally coming off on a strong base of taxpaying workers.
Leader of the Coalition Opposition Tony Abbott hopes that I'll accept that he's my true blue friend, working flat out protecting me from Labor's nasty age discrimination.
"It's not seniors' fault that the government is under cost pressure. This idea somehow seniors are to blame for our economic problems, it is wrong, it is demeaning to great people who have worked hard for our country."sez our Tones.

Here's how Labor's 2010 intergenerational report basically assesses the aging of the population;
"Australia faces significant intergenerational challenges.
Population ageing will mean that there will be fewer workers to support retirees and young dependants.
This will place pressure on the economic growth that drives rising living standards.
At the same time, the ageing population will result in substantial fiscal pressures from increased demand for government services and rising health costs.
Australia's population will continue to grow over time but at slower rates
than in the past. A growing population will help manage pressures of the ageing population but will put pressure on our infrastructure, services and environment. This will require continued planning and investment ahead of time."

Here's how the Coalition's 2007 intergenerational report viewed the same issue;
Demographic and other factors will continue to pose substantial challenges for economic growth and long-term fiscal sustainability.
The projections in IGR2 show that over the next 40 years:

• the population will continue to increase in size but with a higher proportion of older people;
• economic growth per person will slow as the proportion of the population of traditional working age falls; and
• substantial fiscal pressures will emerge due to projected increases in spending, particularly in the areas of health, age pensions and aged care."

And before that in 2003 the Libs and Nats looked at that same ageing population in the first intergenerational report;
Australia, like most industrialised countries, is experiencing an ageing of its population. This is already beginning to place some pressure on government spending. However, much larger pressures are expected to emerge when the 'baby-boomer' generation starts reaching old age in the middle of the next decade.
By careful planning now, we will be better prepared to meet the future challenges of an ageing population.

Can't tell the chooks apart can you! Because the long term demographic shift exists and it will affect the economy.
Tony Abbott is showing what a bl**dy nong he really is in trying to run with this thought bubble for the next 24 hours and this particular greybeard would like to take his 'caring' and shove it down his dishonest pollie throat.

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.

Casino and Grafton winners in house price growth according to ANZ September 2009 rural & regional quarterly report

Snapshot from ANZ Rural and Regional Quarterly 23 September 2009

According to the ANZ Rural and Regional Quarterly 23 September 2009 non-residential and residential building approvals are weak across the NSW North Coast and are falling back towards 2001 levels. Existing dwelling slae prices have also fallen in Coffs Harbour and Byron Bay.

However, the median house price in Casino and Grafton has risen by 5-6% in the last twelve months. In part due to the fact there appears to be more housing stock on the market under $350,000 potentially attracting buyers eligible for the First Home Buyers Grant.

Aussie business confidence up with employment prospects growing stronger - will the NSW Northern Rivers benefit?

Manpower Inc has joined Dun & Bradstreet in reporting some positive news for Oz on the business and employment front.
In fact both place this country in a pretty enviable position, with employers expecting profits to increase (Dun & Bradstreet) and the intent to hire employees still being weak but relatively strong when compared to the rest of the world (Manpower).
As zero growth was a common economic prediction at the beginning of 2009, it's good to see so many crystal ball gazers are so wrong.
Australian business confidence is now at a six-year high and job ads in the newspapers and online have started to increase.
Given that Kevin Rudd's popularity in the polls is still going strong, I guess the country credits Federal Labor and its economic policy with much of this good news.
The big question for us in the Northern Rivers is: will all this translate into more jobs in the region?
I suspect that national confidence levels aren't always mirrored locally and business is more likely to be asking if the present predilection for 'staycations' will result in more domestic tourism business in the hinterland and on the coast at Christmas 2009 and in the first quarter of 2010.

Manpower Inc press release
Dun & Bradstreet National Business Expectations Study article
Latest 8th September Newspoll graphic
NSW North Coast tourism industry facts & figures

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."

Oh, Mr. KRudd! Case of the missing punctuation mark and the body in the library

Sometimes Twitter gives everyone a bit of a laugh at the expense of those pollies who use it.
This is Australian Prime Minister Kevin Rudd on Monday last when (with a missing full stop the culprit) he accidentally told all that climate change and global economic recovery were critical for his personal future:

KevinRuddPM Melb last night spoke 2 US leadership dialogue. Working w Obama Admin on climate change & global economic recovery critical for future KRudd
about 11 hours ago from web

{I know, I know - little things amuse little minds!}

However, Twitter was the last of a working week's worries for the Libs and Nats.
It is getting harder and harder for them to ignore the cadaver sprawled behind the chesterfield in the library, as each new poll keeps pointing to a politically deceased Malcolm Truffles Turnbull.
According to The Sydney Morning Herald yesterday, in the 13th to 15th August AC Nielsen poll the Leader of the Opposition's approval rating sank to 31% and his disapproval rating is a graveyard 60%.
In June 2009 his Nielsen poll approval rating was a lowly 32% and his disapproval score was already running at 60% - which rather indicates that Aussie voters are well and truly ready to plant him in the ground.
Something I'm sure KRudd will point out all week long, with careful attention to punctuation.

Favourite tabloid headline of the week

From the U.K. Guardian on 14 July 2009 and worth a read:

Is Goldman Sachs a blood-sucking vampire squid?

Now who were Australian Opposition Leader Malcolm Turnbull's former business partners again?

All's well with the world as the rich keep getting richer

Sometimes it is hard to fathom how inequitable the global distribution of wealth is, particularly as the current economic crisis is affecting the relatively little advanced economies give to the hungry, ill and dying across the world from Africa and Asia through to the Americas.
Ordinary people who more often than not live on less than two dollars a day.

Or why the UN Millennium Project does not appear to be meeting its goals.

But never fear, the world is righting itself and greed is once again triumphing as a Goldman Sachs recent media release attests.

Yesterday the Goldman Sachs Group reported that total assets were worth $890 billion, total capital as of end June 2009 was $254.05 billion, with net revenues of $13.76 billion and net earnings of 3.4 billion for the second quarter of 2009.

Compensation and benefits (including salaries, severance expenses, bonuses, payroll tax etc.,) for the same period were $6.65 billion.

On 17 June it even repaid the $10 billion is borrowed from the U.S. Government and taxpayers in that over-the-top bankers feeding frenzy at the beginning of the global economic crisis.

Goldman Sachs Group media release, 14 July 2009

New York Times article, 12 July 2009

Photo: Google Images

Trickle down effect more an ideological leap of faith than an economic reality

Core Economics has posted a link to a recent paper on inequality and growth; Do Rising Top Incomes Lift All Boats?

This thoughtful research eventually leads to conclusions that the poor intuitively know well - that any claims that economic growth which benefits the haves will always flow though to a similar benefit for the have nots is not supported by available data.

There appears to be some trickle-down effect in the long run, but since the impact of a change in inequality on economic growth is quite small, it is difficult to be sure from our estimates whether the bottom 90 per cent will really be better off or not.

Core Economics continues to prove that it is a blog well worth visiting.

Parliament begins its inquiry into the relationship between the banks, Storm Financial, Opes Prime & MFS

In all the hullabaloo about the Federal Leader of the Opposition's political nosedive, there has been little mention of the fact that last week the Parliamentary Joint Committee on Corporations and Financial Services began public hearings in its Inquiry into Financial Products and Services in Australia.

The basic terms of reference are:

1. the role of financial advisers;

2. the general regulatory environment for these products and services;

3. the role played by commission arrangements relating to product sales and advice, including the potential for conflicts of interest, the need for appropriate disclosure, and remuneration models for financial advisers;

4. the role played by marketing and advertising campaigns;

5. the adequacy of licensing arrangements for those who sold the products and services;

6. the appropriateness of information and advice provided to consumers considering investing in those products and services, and how the interests of consumers can best be served;

7. consumer education and understanding of these financial products and services;

8. the adequacy of professional indemnity insurance arrangements for those who sold the products and services, and the impact on consumers; and

9. the need for any legislative or regulatory change.

Hopefully those who lost their life savings when Storm Financial spectacularly failed will receive some answers as to why financial advisers are apparently so under-regulated that they can act like irresponsible cowboys.

As yet the transcript of the 24th June 2009 has not been posted. Perhaps because that first hearing day appears to have been taken up with the Australian Securities and Investments Commission explaining itself and its track record.

There have been over 110 submissions to this inquiry so far. Mostly from ordinary individuals, some with sad tales to relate.

The next hearings will be held:

26/08/2009	Melbourne, VIC
28/08/2009	Canberra, ACT
02/09/2009	Townsville, QLD
03/09/2009	Brisbane, QLD
04/09/2009	Sydney NSW

Turnbull couldn't take a trick until......

On 1st June the Leader of the Opposition was twittering negatives about the Australian economy under the Rudd Government:
TurnbullMalcolm in case you have not seen it - our new TV ad http://tinyurl.com/nyklya

The very next day his doom and gloom ad campaign hit a hurdle:
"The trend estimate of the balance on current account for the March quarter 2009 was a deficit of $3,676m in current price terms. This was a decrease of $2,691m (42%) on the deficit recorded for the December quarter 2008 where:
* the goods and services surplus rose $2,091m (52%) to $6,112m
* the income deficit fell $634m (6%) to $9,602m
* the current transfers deficit rose $34m (22%) to $186m.
In seasonally adjusted current price terms, the current account deficit fell $1,743m (27%) to $4,614m between the December quarter 2008 and March quarter 2009 where:
* the goods and services surplus rose $900m (22%) to $5,075m
* the income deficit fell $862m (8%) to $9,498m
* the current transfers deficit rose $18m (10%) to $190m."

Then matters darkened even further for Malcolm with the announcement of GDP quarterly growth and publication of "Debt for Development Makes Sense say 21 Prominent Australian Economists", which removed the last of the air from his little campaign.
Every time poor Mal thought he'd found a silver bullet to fire at his political opponents, along came economic reality.

However the gods must have listened to his desperate prayers, for up popped Fitzgibbon and Ute Man.
Ah, saved to fight another day! Even if nobody gives a toss - when you've shot your credibility wad you've shot your wad period.

The rest of Australian Bureau of Statistics 2nd June 2009 analysis and comments here.

The Australian Economy May 2009: Rudd grins, Turnbull glowers

Graphic: Thomson Reuters

This graph has to be the Liberal Party of Australia's worst nightmare. Not only does it allow the Rudd Government to successfully defend its economic policy to date, it also signals the likelihood of increasingly rebellious displays by its Coalition partner.

The Australian economy may not be out of danger yet, however it is far from the train wreck under Labor predicted by Malcolm Turnbull, Julie Bishop and Joe Hockey.

Truth in advertising missing from Turnbull's debt and deficit advertisement

Liberal Party advertisment May-June 2009

This week I saw a news clip on the teev showing Leader of the Opposition Malcolm Turnbull spruiking the former Howard Government's financial record and bagging the Rudd Government's level of public debt.
There was even a snippet from a coming Liberal Party advert on the subject.
"18 months ago we had no debt and cash at the bank."
And there's the rub - Mal was so foolish as to say that the Howard Government went out on zero debt.
How stupid does he think the average punter is?
Does he really think no-one was watching the growing current account deficit, outstanding Treasury bonds, level of government borrowing and interest payments before November 2007?
For heaven's sake - in 2006 total public sector gross foreign debt was 9.1% of GDP, in 2007 it was 7.7% of GDP and a big chunk of that was general government & Reserve Bank borrowing.
As for total gross national public debt.
Well, let's look at that graph again.







A history of public debt in Australia

See a 2006 0r 2007 zero there anyone?
The fact that Turnbull appears to be bragging about a lack of net public debt by 2006-2007 doesn't mean that there is absolutely no Commonwealth debt.
It simply means that government liabilities (mostly in the form of debt) were matched with financial assets which it could if needed sell-off to meet outstanding debt and interest obligations.
However, I suspect that with Costello as Treasurer these net figures became a trifle rubbery over time. Commonwealth unfunded superannuation liabilities and net claims were an ongoing problem in the final Costello budget.
As a millionaire ex-merchant banker, Turnbull can't pretend that he doesn't know that the Libs are trying to pull the wool over voter's eyes and he can't walk away from the fact that he is telling a political whopper in that first advert of a blatant disinformation campaign.
Who could honestly feel comfortable with the thought of this man's hands on the national helm?

Ken Henry, I luv u....

One of the few pleasures left (when faced with the mountains of negative financial news which greets unwary readers each week) is to find that Secretary to the Treasury Ken Henry has spoken out again.

This time it was his Post-Budget Address to the Australian Business Economists last Tuesday:

This is story-telling of extraordinary complexity. And while it hasn't tested Ross, it clearly has exceeded the reading age of many.
Consider, for example, the reporting of the budget in the Wall Street Journal Asia last week. According to that reporting, in all of the decisions taken by the Government in response to the global recession, the only ones that will have any stimulatory impact on the economy are the 'tiny' personal income tax cuts announced in the 2008-09 Budget. The journal also informs its unfortunate readers that revenue downgrades alone would not have driven the Australian budget into deficit. And to cap it off, readers were told, in what is surely one of the most ironic sentences ever uttered in macroeconomic analysis, that '(t)his Keynesian revival comes at a particularly bad time, given that tax revenues are falling as the economy slows, a normal feature of economic downturns'. Apparently, the right time for a 'Keynesian revival', involving the spending of large amounts of public money, is when tax revenue is strong and rising, a normal feature of economic boom times.
As you know, I don't always agree with Australian commentators. But our newspaper readers can be thankful that they don't often have to confront material that is quite that bad.

Just love to hear that Taree boy's plain speaking.