Sometimes I wonder into which alternate universe I have wandered

Australia successfully survived the Global Financial Crisis under the stewardship of a federal Labor Government which did not panic and, with the cooperation of states and territories, acted swiftly to support weak points in the national economy.

So well did the nation weather this financial tsunami that a year on from the initial rolling economic destruction it was being openly stated by northern hemisphere economic commentators that Australia was the envy of the rest of the developed world and, in 2012 in comparison with that same developed world we still have low unemployment, low levels of government debt, low interest rates, an economy which is holding its own despite an historically weak manufacturing sector and good international credit ratings.

Which begs the question of why this Essential Report survey question elicited negative attitudes in these responses below - from 42 per cent of the very people who barely felt any effect of this global crisis.

Trust to deal with GFC

May 7, 2012

Q. If there was another Global Financial Crisis, which party would you trust most to deal with it?

	15 Aug 11	Total	Vote Labor	Vote Lib/Nat	Vote Greens
The Labor Party	31%	25%	68%	2%	42%
The Liberal Party	40%	42%	5%	83%	5%
No difference	20%	23%	19%	11%	39%
Don’t know	9%	10%	8%	4%	14%

If there was another GFC, 42% would trust the Liberal Party more to handle it and 25% would trust the Labor Party more. This represents a shift to the Liberal Party from net +9% to net +17%

The Liberal Party was rated higher than Labor with all demographic groups. Those most likely to trust the Liberal Party more were men (47%), aged 55+ (48%), full-time workers (50%) and income over $1,600 pw (50%).

Commonwealth Budget Papers 2012-13

Over at www.budget.gov.au the 2012-13 federal budget papers are available for those interested in delving deeper than tomorrow's tabloid newspaper headlines.

• Budget Speech
• Budget at a Glance
• Budget Overview
• Budget Paper No.1  Strategy and Outlook
• Budget Paper No.2  Budget Measures
• Budget Paper No.3  Australia's Federal Relations
• Budget Paper No.4  Agency Resources
• Appropriation Bills

• Mid-Year Economic and Fiscal Outlook
• Final Budget Outcome

• Portfolio Budget Statements
• Portfolio Additional Estimates Statements
• Portfolio Supplementary Additional Estimates Statements

• Ministerial Statements

Past Budgets

A look back at the lack of Coalition economic theory expertise - as Australia waits for the 2012-13 federal budget to be revealed

Hours out from the 2012-13 federal budget, a look back at 2011....

Gross debt - gross ignorance on Saturday, 12 November 2011:  

Admittedly, the notion of gross and net government debt is a little complex, but when someone speaks authoritatively about gross debt in particular, one would hope they understood the intricacies of the concepts involved and how the government debt market works before they opened their mouth. It is embarrassing and disturbing, therefore, to hear the Shadow Finance Minister Andrew Robb, join with the Leader of the Opposition in the Senate, Barnaby Joyce and Leader of the Opposition, Tony Abbott deliver sensational criticisms about the rise in gross debt in Australia.

The views of the Liberal and National Party leaders - the alternative government in other words - highlight a gross misunderstanding of markets, economics and conceptualising what is big and small.

Read the rest here.

The End of the Age of Entitlement: Hockey's speech (link to full transcript)

In April 2012 the Australian Federal Opposition’s Shadow Treasurer Joe Hockey delivered a speech to the Institute of Economic Affairs in London titled The End of the Age of Entitlement.

In this speech Hockey stated;

Entitlement is a concept that corrodes the very heart of the process of free enterprise which drives our economy…

The social contract between government and its citizens needs to be urgently and significantly redefined. The reality is that we cannot have greater government services and more government involvement in our lives coupled with significantly lower taxation…..

You will remember it was Margaret Thatcher who interpreted community entitlements as the right for our children to “grow tall and some taller than others if they have the ability in them to do so”. This broader and timeless conservative definition of our end game lays down some foundations for the role of government. Equality of opportunity rather than equality of outcome is my preferred model for contemporary society.…..

Defined benefit schemes need to be phased out worldwide, including in Australia, whether they are for public servants or private sector employees. All government-funded pensions and other such payments must be means tested so that people who do not need them do not get them.

The first we heard about the Coalition’s plan to review Commonwealth welfare payments/tax concessions/other forms of government assistance with a view to reducing and/or eliminating some of these is found in an ABC TV Lateline interview on 18 April 2012.

Hockey told Lateline that:

Well, with an ageing population and an entitlement system that has seen extraordinary largesse built up over the last 50 years, Western communities, Western societies are going to have to make some very hard and unpopular decisions to wind back the involvement of the state in people's lives……

we need to be ever-vigilant. We need to compare ourselves with our Asian neighbours where the entitlements programs of the state are far less than they are in Australia…

Australia's heading in one direction, that's a reduction of entitlements and it's empowerment of people.

The full transcript of Hockey’s IEA speech can be found here.

Despite Hockey past protestations otherwise, he appears to be following the Liberal Party’s tendency to take its policy straight from Margaret Thatcher’s old playbook and the more conservative elements of the U.S. Republican Party and its Tea Party adherents.

Margaret Thatcher in October 1987:

I think we've been through a period where too many people have been given to understand that if they have a problem, it's the government's job to cope with it. 'I have a problem, I'll get a grant.' 'I'm homeless, the government must house me.' They're casting their problem on society. And, you know, there is no such thing as society. There are individual men and women, and there are families. And no government can do anything except through people, and people must look to themselves first. It's our duty to look after ourselves and then, also to look after our neighbour. People have got the entitlements too much in mind, without the obligations. There's no such thing as entitlement, unless someone has first met an obligation.

One Tea Party leader Phillip Dennis in CNN Opinion, April 2010:

Welfare and unemployment benefits must be drastically cut.

Here is a statement on one right-wing public policy think tank, The Heritage Foundation, made in August 2010:

If we really want to get our nation back on track, one of our top priorities must be to end the age of entitlements.

Ohio Republican Rep Jim Jordan told The Washington Times in April 2011:

Unless we start looking at this fractured system as one unit, exploding costs will bring the whole thing down.

Republican Rep. Paul Ryan said in The Huffington Post on 20 March 2012:

We don't want to turn the safety net into a hammock that lulls able-bodied people ... into complacency and dependence.

Australians trust in the national economy but remain ambivalent concerning the future

This media release of 5 January 2011 from Paris-based Ipsos Social Research Institute illustrates that Australians remain ambivalent concerning the future:

Australia confident about economy,
yet worried about cost of living

Three-quarters (74%) of Australians believe that our current economic situation is ‘very good’ or ‘somewhat good’ according to the December 2010 Ipsos-Eureka Social Research Institute’s Global Advisor study. At the same time, one-third of Australians (33%) believe that ‘inflation/cost of living’ is a top issue facing the nation, according to the December 2010 Ipsos-Eureka Issues Monitor.

The Ipsos-Eureka Global Advisor report for December 2010, which draws on a global Ipsos study conducted monthly in 24 countries since April 2007, asks survey participants to rate their own country’s economic situation on a scale of ‘very good’ to ‘very bad’. In December 2010, 74% of Australians rated our economic situation as ‘very good’ or ‘somewhat good’.

Australia’s most recent result compares favourably to the balance of nations surveyed, ranking equal fourth (China also scored 74%) behind India (88%), Saudi Arabia (81%) and Sweden (75%). Japan was least confident, with 6% reporting their economic situation was ‘very good’ or ‘somewhat good’.

The lowest Australia has performed on the confidence scale is 36% (April 2009). However scores have been consistently above 70% for each month in 2010. Established economies, notably the USA and Great Britain, have not recovered so well; with 20% (USA) and 16% (Great Britain) of people in these countries responding that their current economic situation was ‘very good’ or ‘somewhat good’ for the latest survey.

“These most recent Global Advisor results show that Australians continue to be confident in our post GFC economy, while countries like the USA and Great Britain are yet to recover. We are right at the very top among developed countries, and not far behind the leading emerging economies, particularly India and China,” said Ben Barnes, Managing Director of the Ipsos-Eureka Social Research Institute.

“The results also indicate that Australians are able to acknowledge confidence in the nation’s economy even while things may be getting tougher at a personal level. Confidence in Australia’s economy has been consistently above 70% for the past 12 months. In that time, however, we have seen the cash interest rate rise from 3.5% to 4.75%, growing disharmony about fair and equitable banking practices and a federal and Victorian state election where ‘cost of living’ was a major discussion point. Indeed, we have found that one-third of Australians (33%) believe that ‘inflation/cost of living’ is a top issue facing the nation.”

“The insight is that we, as Australians, are confident that the country is heading in the right direction, but have some worries about our own futures within that economy,” said Mr Barnes.

About Ipsos

Ipsos is one of the world's leading survey-based marketing research firms. Founded and run by market research professionals, Ipsos interprets, simulates, and anticipates the needs and reactions of consumers, customers and citizens – locally, nationally and around the world. Ipsos has a direct presence in more than 65 countries globally and conducts research in more than 100.

The Baltimore Sun 19 January 2012:

The world economy will lose momentum in 2012 but it will keep moving in the right direction, according to Reuters polls of around 600 economists who said crisis-hit Europe would drag on global growth…..

Backed by a mining boom, Australia's resource rich economy should lead the developed world in terms of growth, with a hearty 3.4 percent expansion this year.
"The mining investment boom is largely 'baked in' and is expected to contribute two-thirds of GDP growth in 2012," said Paul Bloxham, chief economist at HSBC Bank Australia.



Overall Australians are going into the 2011 festive season still confident that the economy and home finances are faring well

From the last Essential Report for 2011:

Click on graphs to enlarge

Overall, respondents were optimistic that 2012 would be a good year for themselves overall (52%) and their workplace (45%). They tended to be less optimistic about their financial situation (33% good/27% bad) and somewhat pessimistic about the Australian economy (29%/35%).
Compared to expectations 12 months ago, respondents were much less optimistic about the Australian economy (48% good last year compared to 29% good this year) and also rather less optimistic about their own financial situation (39%/20% last year compared to 33%/27% this year).
When compared with last week’s questions on perceptions of 2011, these figures suggest that respondents expect 2012 to be better than 2011 for themselves and their family (net +36% for next year compared to net +24% for this year), a little better for their workplace (+25% next year, +20% last year) and their own financial situation (+6% next year, -2% this year). The Australian economy is expected to be a little worse in 2012 (-6% next year compared to +2% last year).

UPDATE:

Moody’s Investor Service Global Credit Research - 21 Dec 2011

New York, December 21, 2011 -- Moody's maintains the following ratings on Australia, Government of:

Long Term Issuer (domestic and foreign currency) ratings of Aaa

Senior Unsecured (domestic and foreign currency) ratings of Aaa

Senior Unsecured Shelf (foreign currency) rating of (P)Aaa

RATINGS RATIONALE

Australia's Aaa ratings are based on the country's very high economic resiliency, very high government financial strength, and very low susceptibility to event risk. Economic resiliency is demonstrated by the country's very high per capita income, large size, and economic diversity. As one of the world's most advanced economies, the country has not only a significant natural resource sector--including minerals,hydrocarbons, and agriculture--but also well developed manufacturing and service sectors. It also demonstrates strong governance indicators. In particular, the framework for fiscal policy is transparent and has, until now, consistently kept government debt at low levels.

The government's debt rating of Aaa takes into account the aim of maintaining a balanced budget, on average, over the business cycle. It is supported by the very low level of public debt and the country's strong financial system. In comparison to most other Aaa-rated countries, Australia's government financial strength is very high, with very low gross debt that is easily affordable and provides a high degree of fiscal flexibility...... [my bolding]

Hatip to Latika Bourke for tweeting this information.

Now before you indulge in très grande panic with Dr. No - actually look at the 2011-12 MYEFO

Don't rely on the spin - knock yourself out with a bit of 29th November number crunching!

"The Mid‑Year Economic and Fiscal Outlook 2011‑12 (MYEFO) has been prepared in accordance with the Charter of Budget Honesty Act 1998. The Charter requires that the Government provide a mid‑year budget report which provides updated information to allow the assessment of the Government's fiscal performance against its fiscal strategy."

Mid-year Economic and Fiscal Outlook 2011‑12 1.7 MB

Preliminaries and Foreword 205 KB

Part 1: Overview 147 KB

Part 2: Economic outlook 221 KB

Part 3: Fiscal strategy and outlook 254 KB
Attachment A: Sensitivity of budget estimates to economic developments 122 KB
Attachment B: Tax expenditures 100 KB
Attachment C: Supplementary expenses table and the Contingency Reserve 119 KB
Attachment D: Australia's Federal Relations 406 KB

Appendix A: Policy decisions taken since the 2011‑12 Budget
Revenue Measures  293 KB

Expense Measures 566 KB
Capital Measures 163 KB
Appendix B: Australian Government budget financial statements 296 KB
Appendix C: Statement of risks 218 KB
Appendix D: Historical Australian Government data 182 KB

O'Farrell Government treats people of the NSW North Coast with open contempt

From A Clarence Valley Protest on 9 October 2011:

Living in regional New South Wales often leads one to suspect that any state government of the day and its minsters rarely display an understanding of (or empathy with)  the aspirations, problems or concerns of distant local communities.

This was clearly demonstrated when a question raising concerns on behalf of residents and ratepayers living on the NSW North Coast in the Dorrigo, Belligen, Coffs Harbour and Clarence Valley districts was put to the Coalition Government in the NSW Legislative Council last month.

Highlighted below the contemptuous, party-politics-before-people response which was given by the O’Farrell Government:

The Hon. JEREMY BUCKINGHAM: My question is directed to the Minister for Finance and Services, representing the Minister for the Environment. I thank the Minister for his detailed answer previously revealing that the Macleay River has been contaminated by the Hillgrove antimony mine for millennia—which is thousands of years, in case he does not remember. Ancoa has a proposal to reopen the Hillgrove antimony mine responsible for much of this contamination. Anchor Resources plans a new antimony mine at Wild Cattle Creek at the top of the Nymboida River. Given the toxicity of antimony and history of contamination, what is the Government doing to ensure that these mines will not further contaminate the Macleay River and contaminate the Nymboida River?

The Hon. GREG PEARCE: Last week I commented upon the member's North Korean controller and the need to translate his questions from Korean to code, then from code to Korean, and then from Korean to English. I said that his questions are garbled. If anyone could make sense of that question, I invite them to answer it for me. I could not follow it at all—I really could not. I invite the member to put the question on notice to get a detailed answer.

[NSW Parliament, Hansard,14 September 2011]

What a difference having a genuine national fiscal policy makes

The Economist’s Global Public Debt Clock 2011
Click on image to enlarge

Now before we all give into any international media-inspired hysteria and cry the sky is falling, here is Australia’s sovereign credit rating according to Standard and Poor’s (S&P) as of 5 August 2011:

Commonwealth of Australia

Sovereign local currency ratings (LT/Outlook/ST)  
AAA/Stable/A-1+

Sovereign foreign currency ratings (LT/Outlook/ST)
AAA/Stable/A-1+

Transfer and convertibility assessment  
AAA

The Commonwealth of Australia has retained an excellent Triple A credit rating from Standard and Poor's (as well as from Moody’s and Fitch) for the last eight years - for which successive federal governments of different political persuasions can take credit.

In 2011 its public debt as a percentage of its Gross Domestic Product (GDP) is running in the vicinity of 23 per cent, the current account deficit is around 2.5 per cent of GDP and total combined public, corporate and private individual foreign debt only resulted in a 3.9 per cent net income deficit as a percentage of GDP in the March 2011 Quarter - according to the figures I can find.


Just as importantly, one of the nation's major Asian trading partners China continues to see Australia as "stable" and gives a domestic currency credit rating of AAA and a foreign currency credit rating of AA+ at a time when Dangong Global Credit Rating has downgraded 
America's rating to "negative" and the official Xinhua news agency is stating; China, the largest creditor of the world's sole superpower, has every right now to demand the United States to address its structural debt problems and ensure the safety of China's dollar assets.

Now compare that brief fiscal thumbnail with the recent credit rating history for the USA, courtesy of a Democrat Government incapable of dominating the Congress and a Republican Party which has lost its way.

Standard and Poor’s release on 18 April 2011:

We have affirmed our 'AAA/A-1+' sovereign credit ratings on the United States of America.

The economy of the U.S. is flexible and highly diversified, the country's effective monetary policies have supported output growth while containing inflationary pressures, and a consistent global preference for the U.S. dollar over all other currencies gives the country unique external liquidity.

Because the U.S. has, relative to its 'AAA' peers, what we consider to be very large budget deficits and rising government indebtedness and the path to addressing these is not clear to us, we have revised our outlook on the long-term rating to negative from stable.

We believe there is a material risk that U.S. policymakers might not reach an agreement on how to address medium- and long-term budgetary challenges by 2013; if an agreement is not reached and meaningful implementation is not begun by then, this would in our view render the U.S. fiscal profile meaningfully weaker than that of peer 'AAA' sovereigns.

Standard and Poor’s release on 5 August 2011:

We have lowered our long-term sovereign credit rating on the United States of America to 'AA+' from 'AAA' and affirmed the 'A-1+' short-term rating.

We have also removed both the short- and long-term ratings from CreditWatch negative.

The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government's medium-term debt dynamics.

More broadly, the downgrade reflects our view that the effectiveness, stability, and predictability of American policy making and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than we envisioned when we assigned a negative outlook to the rating on April 18, 2011.

Since then, we have changed our view of the difficulties in bridging the gulf between the political parties over fiscal policy, which makes us pessimistic about the capacity of Congress and the Administration to be able to leverage their agreement this week into a broader fiscal consolidation plan that stabilizes the government's debt dynamics any time soon.

The outlook on the long-term rating is negative. We could lower the long-term rating to 'AA' within the next two years if we see that less reduction in spending than agreed to, higher interest rates, or new fiscal pressures during the period result in a higher general government debt trajectory than we currently assume in our base case….

We have taken the ratings off CreditWatch because the Aug. 2 passage of the Budget Control Act Amendment of 2011 has removed any perceived immediate threat of payment default posed by delays to raising the government's debt ceiling. In addition, we believe that the act provides sufficient clarity to allow us to evaluate the likely course of U.S. fiscal policy for the next few years.....

United States of America

Sovereign local currency ratings (LT/Outlook/ST)  
AA+/Negative/A-1+

Sovereign foreign currency ratings (LT/Outlook/ST)
AA+/Negative/A-1+

Transfer and convertibility assessment  

AAA


According to The Australian on 5 August 2011; Australian 3-year government bond prices posted their biggest one-day rise since 1991 as investors rushed en masse to the safety of risk-free assets.

In addition, The graph below shows historical exchange rates between the Australian Dollar (AUD) and the US Dollar (USD) between 7/7/2011 and 8/5/2011 as the international financial markets began to panic:

At 12pm (AEST) 6 August 2011 the Australian dollar was trading at 104.91 US cents....down from $US1.0665 late yesterday and off a 30-year high of $US1.1080 last week.  By 8 August the dollar was at 1.0343 US. 

On 5 August 2011 NASDAQ placed this recently high currency rate into perspective with this statement; the latest ascent comes about three months after the Australian dollar last hit a 30-year high. The initial push higher that started in June of 2010 came as a continuing mining boom and a series of interest rate hikes from Australia's central bank that began in October 2009 lifted the currency more than 30% against the U.S. dollar in a year.

According to the Herald-Sun the Australian stock market fell by 4 per cent on 5 August and at close of business yesterday the ASX All Ords and S&P/ASX200 graphs were not catastophic:

Placing that fall within an historical context is this ASX All Ordinaries (XAO) Index chart 1988 - 2011 graph:

Even the International Monetary Fund doesn't consider the Australian economy an overtly risky proposition. So the next time either the Opposition Shadow Treasurer Joe Hockey, unidentified Liberal/National sources or elements in the Murdoch press  attempt to slyly suggest that Australia's economy is inevitably on the way to the poor house without drastic regime change - yawn loudly and turn aside.

The only thing Australia has to fear at this point in time is the contagion of fear itself and perhaps being overly irritated by the silly political point scoring of conservative politicians and big business lobbyists alike.

Will NSW Premier O'Farrell protect local government investment in NSW North Coast sustainable urban water infrastructure?

 

From A Clarence Valley Protest on 18 July 2011:

There are ninety kilometres (90 km) of underground pipelines linking the Nymboida River with the Shannon Creek Dam in the Clarence Valley, the Rushforth Road Reservoir at South Grafton and the Karangi Dam near Coffs Harbour.  The combined value of this infrastructure to Clarence Valley and Coffs Harbour local government has been estimated at $200 million.

On 18 July 2011 The Coffs Coast Advocate reported Coffs Harbour City Cr. Mark Graham as stating:

…he had inspected a site on Wild Cattle Creek where Anchor Resources was exploring for antimony and there were already large plumes of antimony which could leach into Wild Cattle Creek and into the Nymboida River.

“There is a massive plume washing from the exploration site into the headwaters of our drinking water catchment,… There is a great need to protect the catchment of the regional water supply and our collective investment of about $200 million"

If these plumes are as reported, then the China Shandong Jinshunda Group Co Ltd through its Australian mining exploration arm, Anchor Resources Ltd, is placing local government investment, an urban water supply (which supports an estimated 3 million residents and visitors/tourists each quarter across Clarence Valley-Coffs Harbour regions) and, a high-value natural environment, at risk even before antimony mining and processing has begun.

According to a report commissioned by Clarence Valley Council in 2008; On average, domestic overnight visitors spent $118 per night, International overnight visitors spent $76 per night and domestic day trippers spent $80 per trip.

Will NSW Premier Barry O’Farrell and Minister for Resources and Energy Chris Hartcher ignore potential risks to the interests of Northern Rivers and Mid-North Coast communities in order to facilitate the interests of this international mining corporation?

Unemployment: compared to the rest of the developed world Australia is not doing too badly

U.S. Bureau of Labor Statistics, International Labor Comparisons

In May 2011 the official U.S. unemployment rate was 9.1 per cent, the latest figures available from the U.K. show an unemployment rate of 7.7 per cent (March) and, in New Zealand  and Canada the rate stands at 6.6 per cent and 7.6 per cent (April) respectively. Also in April 2011 Japan recorded a seasonally adjusted  unemployment rate of 4.7 per cent.

How the Australian Bureau of Statistics sees the Australian labour force in its latest release for May 2011:

MAY KEY POINTS

TREND ESTIMATES (MONTHLY CHANGE)

• Employment increased to 11,444,200.
• Unemployment decreased to 588,400.
• Unemployment rate steady at 4.9%.
• Participation rate steady at 65.6%.
• Aggregate monthly hours worked increased to 1,602.5 million hours.

SEASONALLY ADJUSTED ESTIMATES (MONTHLY CHANGE)

• Employment increased 7,800 (0.1%) to 11,440,500. Full-time employment decreased 22,000 to 8,027,100 and part-time employment increased 29,800 to 3,413,500.
• Unemployment increased 8,900 (1.5%) to 592,800. The number of persons looking for full-time work increased 6,700 to 421,800 and the number of persons looking for part-time work increased 2,200 to 171,100.
• The unemployment rate remained steady at 4.9%. The male unemployment rate decreased 0.2 pts to 4.5% and the female unemployment rate increased 0.4 pts to 5.4%.
• The participation rate remained steady at 65.6%.
• Aggregate monthly hours worked increased 6.4 million hours to 1,601.1 million hours.

LABOUR UNDERUTILISATION (QUARTERLY CHANGE)

• Trend estimates: The labour force underutilisation rate decreased 0.1 pts to 12.0%.
• Seasonally adjusted estimates: The labour force underutilisation rate increased 0.2 pts to 12.2%. The male labour force underutilisation rate increased 0.2 pts to 10.2%. The female labour force underutilisation rate increased 0.2 pts to 14.6%.

UNDEREMPLOYMENT RATE (TREND ESTIMATES)

MALES
The trend estimate of the underemployment rate for males fell from 5.6% in May 2001 to 5.2% in August 2002 before rising to 5.4% in May 2003. The trend then generally fell to 4.3% in May 2008 before rising to 6.3% in August 2009. The trend has since fallen to 5.3% in May 2011.

FEMALES
The trend estimate of the underemployment rate for females rose from 9.1% in May 2001 to 9.6% in February 2002. The trend then fell to 9.3% in August 2002 before rising to 9.7% in February 2004. The trend then fell to 7.8% in May 2008 before rising to 9.8% in November 2009. The trend has since fallen to 9.0% in May 2011.

Someone forgot to tell Australia it's rooned

Oft repeated sayings sometimes have a long life because they contain an element of truth and on Friday the 13th “There are degrees of falsehood - lies, damn lies and statistics” was taken out for a spin by Mike 'Mish' Shedlock in his Howe Street (U.S.) compilation “Economic Bust in Australia:Near-Record Corporate Bankruptcies, Employment Drops Unexpectedly; Rise in Bad Home Loans;Record Low Property Transactions”.
According to Mish (artistically depicted at right) Australia is in dire straits and everyone is shortly destined for financial hell down under - but no-one has told the Oz Government or most average Aussies who think that the economy is heading in the right direction.
When you look at the numbers used by this American Chicken Little they don’t justify that scaremongering headline.
With investment advisers like Mish, perhaps Sitka Pacific Capital clients should be wary of where their money is being sent.

Pic found at Google Images

Budget Reply 2011: exposing the hollow men

The Coalition Budget Reply - old, tired and inaccurate..........

ABC TV Lateline program on 12^th May 2011:

TOM IGGULDEN, REPORTER:

In the lead-up to tonight's speech, the Opposition was letting it be known Tony Abbott would be detailing new policies for small business and welfare.
He must have lost them on the walk to the chamber; there were no new initiatives, even a copy of the speech distributed to the media was a year out of date.

TONY JONES:

Well we didn't get a lot of response to the actual budget tonight in Tony Abbott's speech. So, he did talk about "forgotten families", and the Coalition's been very critical about changes to family benefits in the Swan budget. There are 1.9 million families who receive Family Tax Benefit A. Do you know how many of them Treasury estimates will lose their benefit after the changes?

ANDREW ROBB: Well as I understand it with Tamily Tax A, that almost all of those families will be affected by the decision of the Government to freeze the indexation.

TONY JONES: Well, according to Treasury, only 31,000 families will be affected by the changes.......

TONY JONES: Well in that case, do you know how many are affected by the changes, according to Treasury, in Family Tax Benefit B?

ANDREW ROBB: Well as I understand, some 44,000 families will be affected.

TONY JONES: No, it's 9,000. Apparently out of 1.6 million, 9,000 are going to be affected by the changes to family tax benefit B. Yes, 31,000 are going to be affected by changes to the other tax benefit A, and if you add them together, you get the figure you just mentioned.

Hansard transcript of Budget Reply - see Page 81.

Yeah, that's the answer Uncle Joe! Put more people out of work.

Uncle Joe and The Rabbit in The Canberra Times on 11^th May 2011

Now I’ve heard everything! Joe Hockey’s answer to the Australian Government’s 2011 Budget is to say tax concessions shouldn’t be taken from those rich enough to be into income splitting, family trusts and the like and other concessions and income support shouldn’t be frozen for the next four years for those singles or families earning $150,000 or more a year – instead he insists that 12,000 people should be sacked from the public service and be directed towards the dole line.
Onya, Uncle Joe. You’re the tosser giving us all a perfect example of the very class war you’re accusing the Treasurer of conducting. At least Swanee isn’t into mass layoffs to bring the federal budget into surplus.

In his call to support those earning a comfortable living, Joe ignores the fact that in August 2010 there were 9.8 million employees in this country and a good 50% of these earned less than $46,020 a year. Even if these people lived in households where their partners worked for similar wages, they would still come nowhere near having the combined incomes of Abbott & Co's newly discovered middleclass battlers. Who, incidentally, have also for many years been growing their disposable incomes at a higher rate than the less well off.
Here on the NSW North Coast it would be a safe bet to say that half of all households would have annual incomes which fall below $46,020 and a great many of these would be old age pensioners, so Hockey's plea to save the middleclass from the wicked Gillard Government falls on deaf ears in many a local home.

Here's a profile of Abbott and Hockey's 'battlers' (who appear to make up around a mere 15% of all households according to the Herald-Sun) courtesy of The Tele on 11th May and The Australian of the same day:
Family No.1 A young couple (with one small child and a high maintenance dog) whose combined incomes are more than $150,000 per year, both have successful, high-paying professional careers, own a modern McMansion in a popular suburb, with two cars in the garage as well as flashy plasma in the lounge, and yet still they loudly complain that their family income is not enough to support their preferred lifestyle.
Family No.2 A young couple (with two young children), he's in the building industry and she's an associate director in a recruitment firm, they have a combined income of around $200,000 per year, pay 18% tax, live in a decent house in an established suburb and had considered employing a nanny if the Gillard Government froze middleclass welfare rather than raising it to meet the family's expectations.
Anyone seen where I put the smallest violin in the world? I feel a sad, sad sonata coming on....