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Wasteful spending, poor planning and extreme socialism.

June 14th, 2009 · Greg Atkinson · 46 Comments

For some time I have been saying that the Government’s economic stimulus spending spree will be wasteful, poorly directed and do little to make Australia a more competitive economy.  If this is not bad enough the chances are the reckless spending by the Rudd Government may also stir inflation again and cause more problems for the Australian economy than the global financial crisis ever did.

Finally a number of newspapers are now putting the spotlight on how the Government is spending tax payers money with The Australian even having a section called Stimulus Watch so readers can see how their money is being spent.  At present there is a lot of focus on the cash being tossed at schools (even if they are scheduled to be closed) but I can assure you that money is being wasted across all areas of Rudd’s multi billion dollar, debt fuelled, vote buying, spending extravaganza. (see my earlier blog Rudd Economics 101 – When in doubt spend like crazy to see where $800 million dollars of your money will also be mostly wasted)

It was popular some months ago to bash capitalists especially if you were a left leaning politician and it seems the Australian public enjoyed Rudd’s verbal bashing of bankers and company CEO’s.  But now we are are seeing something less productive and more costly than any version of capitalism (extreme or otherwise)….extreme socialism.

Extreme socialists believe that the Government should jump in and help us through the bad times, distribute wealth so that we all can live in harmony and that they know how best to manage our schools, hospitals and utilities.  Of course extreme socialists need a lot of money to create their fantasy-land but no problem, they simply raise taxes for those greedy free market companies and for people whom they decide are wealthy.

The main problem is that extreme socialists only know how to spend as the concept of making a profit or seeking an economic return is something that only those evil neo-liberals would think of. So in their view of the world when a government funds a project there should be no detailed objectives, just some high level vague statements of what they they hope will be achieved.

Sure some money is wasted, but the government will always have new money coming in via taxes so there will always be funds to spend or if needed, money can be borrowed.  If the budget deficit starts to become a problem then extreme socialists reckon they can overcome this by simply raising taxes again for people who will probably not vote for them anyway.

If you think what I am saying is fiction then just reflect on where we are now. The Rudd Government has turned a budget surplus into a deficit, is slowly chipping away at those who it feels are wealthy and plans to introduce an Emissions Trading Scheme which is nothing more than an extra tax on companies.  This is just the beginning, because sooner or later someone is going to have to pay back the $300 billion or so the Government is spending.

In addition the Government has committed taxpayers money to building and operating a national broadband network without any business planning, has sent stimulus money payments to people not even living in Australia and has not defined in clear terms what will be achieved as a result of spending a huge amount of taxpayers money.

The big problem we have now is that people have been duped into believing that big spending governments are good for them no matter how the government spends.  I have no problem with any government bringing forward spending on critical infrastructure or supporting pensioners and those in real need when times are tough, but any spending should be carefully planned.

In addition there should be some level of expected return for each dollar spent. For example after billions of extra dollars are pumped into the health system then we should be able to see a reduction in waiting times for operations, a decrease in avoidable deaths and improvements in hospital management.  Have you seen the details of what improvements will be achieved in clear measurable terms as a result of the extra money being thrown at the health system?  No of course not, because no concrete objectives have been set.

It has also been widely reported that much of the funding for Gillard’s “Education Revolution” is in fact being used to pay for much needed maintenance at schools across the nation.  This means that even in the boom years the State Governments were unable to maintain existing facilities, so how exactly are they going to keep these and any new facilities and equipment maintained in the future once the stimulus money runs out?

This leads us to a problem that the Government is not telling you about, and that is the more they build the more it will cost to maintain.  Yes a new bridge will initially cost little to maintain, but eventually it will need attention and that will cost money.  So as a nation’s installed base of infrastructure, schools libraries, hospitals, community centres etc. grows so does it’s long term maintenance cost.  Don’t bother looking in the budget papers for any maintenance estimates for all these new facilities and associated equipment because it isn’t there.

Do you think the Treasury has included maintenance costs in their long term planning?  Of course not, and I doubt the various State and Local Governments have either.  So out there somewhere is hundreds of millions of dollars in annual maintenance costs not factored into anyone’s planning.  In 10 years time we will still be paying for buildings and facilities that we probably did not need while a lack of funds will see much of this infrastructure gradually fall into disrepair.

This already happens today.  In Sydney the rail network is poorly maintained and in the CBD there have been number of blackouts because of a lack of investment in the power grid.  In other words, our existing infrastructure is not maintained properly and many of our utilities have been mismanaged, yet the Federal Government will throw more money in the same direction and seems to be expecting miraculous (though not defined) outcomes.

At some point in the not too distant future all levels of government across the land are going to be looking for money.  Already in NSW water and electricity prices are on the way up and you can be sure this is just the beginning.  As prices creep up this will fuel inflation and if oil prices take off again our old friend the inflation genie will be out of the bottle once more.

If this happens then that freshly painted bingo hall or new school library is not going to look like such a wise investment.  Maybe we should be fixing all those cracked water mains that leak millions of litres of water every year, or upgrading existing rail networks so trains run on time and millions of hours of productivity are not lost because of stranded commuters?

Perhaps those who are overseeing the spending on infrastructure should have first done a detailed audit on what already exists and what condition it is in?  What is the point of building a lot of new infrastructure when we cannot even maintain and and manage what already exists?

Instead of careful planning and targeted spending we have been sold the extreme socialist view of the world.  In the twisted world of Rudd, Swan and Gillard if you just toss around enough money then magically everything becomes groovy.  School children they hope, will remember it was them that made their new school library possible, but when these children grow up they may not be too thankful when they realise that they will be working until 67 and paying higher taxes for something that they probably spent little time in anyway.


46 responses so far ↓

  • 1 Gary // Jun 15, 2009 at 8:06 pm

    If you want an example of how bad our rail network in Sydney is maintained just check out the stations on the city circle..most of them are certified fire traps.

  • 2 Pete // Jun 16, 2009 at 3:06 am

    Greg, I agree that the Gov is doing a crap job.

    But…I think you should ease up on the ‘comparison with past’, like:

    The Rudd Government has turned a budget surplus into a deficit[…]

    …because we are not in ‘surplus’ times anymore. So whilst I don’t agree that they have spent the money wisely (or even should have), I think it’s a fair point.

    It’d be a bit like inheriting a company, with a decent cash balance, but negative earnings. What do you do?

    So perhaps I am a bit harsh on that point – but I don’t think it is quite fair. A few (including myself) would argue that Howard squandered the boom times severely and could have put us in a much better position.

    If you ease up slightly on the Rudd/Labor bashing, you’ll have my agreement (for whatever that is worth) 🙂

  • 3 Greg Atkinson // Jun 16, 2009 at 7:47 am

    Pete – the Rudd Government are the ones running the show at the moment so I cannot avoid giving them some flak. The main reason I direct so much criticism towards Rudd is because he told the Australian people he was an economic conservative and quite clearly he is not.

    But just because I am critical of Rudd does not mean I am pro-Howard. I think the Howard Government did throw too much money back at people and the lump sum baby bonus for example was great for retailers of flat screen TV’s, but not a good way to use taxpayers money.

    Regrading your point:

    It’d be a bit like inheriting a company, with a decent cash balance, but negative earnings. What do you do?

    I would suggest most company directors would focus on cutting costs in that situation, be cautious about taking on debt and plan any new spending very carefully. Does this sound like what the Government is doing?

  • 4 Senator13 // Jun 20, 2009 at 10:38 am

    Pete: In what ways did Howard “squander the boom times” specifically?

    More pink batts and boom gates perhaps?

    I think there needs to be credit where credit is due – and Howard did leave a better set of books to Rudd then Howards’s predecessor left for him.

    One of the only things that I was looking forward to from Rudd when he came to Office was that he seemed genuinely wanting to bring Australia into the 21st century in relation to broadband. But, this too has fallen victim to poor planning and destined for massive cost blow outs and delivery of an out of date product.

    On another point, Rudd has been the media darling for far too long. Everything he has done – even when it has been blatant poor spending and mismanagement – has been glossed over by the media. A lot of these policies have not had the scrutiny that they deserve. Howard had to fight at every point to bring in any kind of policy and it was a long and tedious process. In both Rudd’s unbridled haste and the soft touch of the main stream media a lot of things have slipped through the cracks and gone unnoticed. By giving Governments, on either side of the political spectrum, a free run I fear we risk making some very big mistakes. In times like this I do not believe that a rushed approach is the best cause of action.

  • 5 Pete // Jun 23, 2009 at 6:12 pm

    Senator13:

    In what ways did Howard “squander the boom times” specifically?
    More pink batts and boom gates perhaps?

    Touche’! 🙂
    Oh, Rudd is doing an awful job. I think Howard did great at the start of his ‘rein’ but then got a bit strange and squandered our boom times on stupid projects, advertising his stupid projects, and generally not changing anything for the better. He had so many opportunities to help spend on needed infrastructure and things that would support us into the future, and wasted them.

    In his defence he did set up the Future Fund, but I hate that old thing. It is run by Americans and invests in Telstra. Besides, it was far too small.

    I really think Howard set us up to have some real social/welfare problems in the future, by not addressing them when he could have. Yes, the future fund was partly for this, but he let so many things just fall apart.

    I think there needs to be credit where credit is due – and Howard did leave a better set of books to Rudd then Howards’s predecessor left for him.

    Oh no, not that argument again. I hate that argument. Labor gets a bad rap because it is a product of bad times. Get elected on the cusp of a recession, and you get…a recession. Get elected at the end of a recession and you get…a boom. Not a product of the leader, just a product of the economic period.

    I do agree with the rest of your comments though

  • 6 Senator13 // Jun 23, 2009 at 9:55 pm

    Hi Pete, just some general points/observations.

    Social policy and the welfare system specifically – I don’t want to touch that with a one hundred foot pole. It was a mess under Howard, it is a mess under Rudd and will be a mess under who ever is next and probably always will be a mess. One point that I do believe needs mention is the work for the dole scheme. I feel it was a good initiative and Howard does deserve some credit for that. As for the rest, as I said above – it is a mess.

    I do believe that the first half of Howard’s ‘rein’ was better then his last half. Towards the end there was some out of control spending on advertising and did kick off the whole ‘bonus payments’ thing that people now come to expect as the norm. This was not a good precedent to set.

    In relation to ‘squanded’ – I concede that maybe Howard did not capitalise on some things as much as he could have. But I maintain that things were not an entire write off as some people say. Things were not as bad as some critics make them out to be. Phrases such as ‘The bad old Howard years’ and ‘Howard burtopia’ I feel are over the top. Things were defiantly not bad as people like to make them out to be and I actually would say that things were on a whole fairly good. Yes, things can always be better but things could have been worse and life in general for the majority of people was fairly good.

    As for when Labor governments get elected – I can’t change that. I can only comment on the actual numbers as they are at the time of a change of government. The numbers did not look good from Keating and the numbers from Rudd are going to be worse.

    I think we kind of have the same concerns just viewed from a different angle.

  • 7 Pete // Jun 24, 2009 at 12:38 am

    I agree with you there Senator13.

    I don’t think Howard was all bad, but I do think that the boom period was good, despite him. It was good even with George Bush running amok and us prancing into Iraq and Afghanistan. I think it would have been good even with someone as bad as Latham, Crean or Hewson as PM.

    What annoyed me was his ‘neglect’ of some of the necessities, whilst talking up his triumphs. As I said, the Future Fund was a decent idea, but the huge reduction in public housing for instance I think was a poor idea. Hospitals all over the place were being neglected and things falling apart.

    I know a lot of that is down to state Gov’s, but they get a lot of funding from the Federal Gov. And that is where I think Howard played the ‘game’ well. Starve the states of money, they still cop the blame, whilst he can reap the rewards of a thriving economy. Unfortunately, the states then rely on getting income from other places (eg stamp duty) or fall into pieces trying to juggle fifty top priority issues and corruption (like NSW Gov).

    I am a bit anti-Howard I confess, but I do agree about things like work-for-the-dole. People shouldn’t get a completely free ride. And besides, the WFTD experience may help land them a job. He at least appeared to do something about Australia’s “welfare and compo” reputation (I haven’t heard that one for ages…remember that?).

  • 8 Greg Atkinson // Jun 24, 2009 at 10:11 am

    Pete I think most of the blame for the poor service delivery in areas where state governments are in control lies with the states. In NSW for example the health system has been found to be poorly managed in report after report and this has little to do with funding. If the management of the system is not fixed then the system will not be improved even with additional funding.

    Look at public transport in NSW as another example…this is clearly a state government created mess. We cannot blame Howard or Rudd for that debacle.

    I think even Rudd knows that many of the state governments are basket cases. I mean how on earth has the Queensland Government managed to get itself into such a mess after years of taking in cash from a mining and property boom?

  • 9 Pete // Jun 24, 2009 at 5:07 pm

    Hmmm. The whole thing is a mess. Abolish the state gov’s!

    I agree that the state gov’s got themselves into a lot of the mess, but I think the federal gov can also take some of the blame. Howard was too busy bullying them without trying to cooperate.

    QLD and the other states made some very silly gambles with money, expecting prosperity to continue. It is not easy to turn a disastrous Gov policy 180 degrees, so I doubt QLD will get out of this without some pain.

    Sometimes I really hate politics. It is like kindergarten all over again.

  • 10 Greg Atkinson // Jun 24, 2009 at 5:21 pm

    Pete in a perfect world I would like to see each layer of Government have clear roles and responsibilities…but it is not going to happen so we are stuck back in kindergarten I fear 🙂

    Personally what I think Howard did wrong was splash around cash via the baby bonus and family allowances etc. which I feel were a little too generous. (and I say that as someone who has a family) We all know that a lot of the lump sum baby bonus handouts ended up paying for flat screen TV’s so the Liberals can’t exactly claim the high moral ground when it comes to government spending.

    My view is simply that we should give any government the least amount of money as possible since we know they will always waste a large portion of it no matter what political party is in power.

    Sad, but true.

  • 11 Senator13 // Jun 24, 2009 at 5:24 pm

    The States have a lot to answer for. They get all the GST – how much more do they want? They also get heaps of other funding for every project under the sun from the Federal Government. And with all this money they still have crazy stamp duty tax, which they were suppose to get rid of, as well as a plethora of other state specific taxes. Now that Rudd is in office, the States can now no longer run the ‘its all nasty Howards fault’ line. They no longer have an excuse. They are all one big happy Labor family.

  • 12 Ned S // Jun 26, 2009 at 8:09 pm

    Qld is shaping up to be a bit of a mess – Maybe it isn’t a good idea to elect public servants and welfare workers with Arts degrees as our leaders.

  • 13 Greg Atkinson // Jun 27, 2009 at 8:00 am

    Ned S – I really wonder how Queensland ended up in such a mess. Was it simply a case of poor planning, poor budgeting and over spending?

    As for the people we elect, I think you know my views on the subject. We need a lot less politicians who are paid more but really have to compete to be elected and perform well to be re-elected.

  • 14 Ned S // Jun 27, 2009 at 11:58 am

    Qld? Who’s to really know Greg. The ratings agencies obviously aren’t impressed by the plan to get out of debt. The state is in way better nick than California of course. But I’d still be curious as to what Arnie Schwarzenegger’s words of advice to Anna Bligh might be if she cared to ask.

    When current school children grow up Greg, they just may find the retirement age is a bit higher than 67 – Ken Henry recommended it be reviewed again in/by (?) 2024 or some such (just working from memory sorry) – But I doubt the intention is reviewing it with the aim of putting it back down.

  • 15 Greg Atkinson // Aug 14, 2009 at 4:38 pm

    Ned S – have you been tracking what the Ken Henry review may come up with? Any potential nasties?

  • 16 Ned S // Aug 14, 2009 at 8:15 pm

    G’day Greg – Taken my eye of that ball I’m afraid. The link to an article (The Age I think?) that was posted as a comment in DR recently about compulsory annuities being considered as part of super (for people who have $100 K or less?) was interesting. But expected enough – Good news even in that it is apparently only being considered for people who retire with relatively low super perhaps?

    It’s giving some people some cause for pretty deep thought though. A mate asked me about purchasing residential RE some months back – I said I reckoned it was pretty high risk at the time and to hold off. (I’ve since revised that assessment.) But irrespective, it turns out he is keen to jump very largely because he’s concerned that negative gearing will be done away with. But is pretty confident that no such nasty rule change will apply to property purchased before any such change. And I do agree with that assessment.

    I’m not really in a situation where I feel to preempt anything for myself though. I’m just going to sit pretty much as I am (which includes a decent cash weighting) until we do get some clarity. But everyone’s situation is different of course – My mate’s is very, very different to mine where amongst other things, he really wants a negatively geared property in Oz and I simply don’t. Cheers!

  • 17 Greg Atkinson // Aug 14, 2009 at 9:29 pm

    Hi Ned – It just worries me when there is a review of the taxation system. Sure it needs to be tweaked, but how can anyone do any long term planning when you feel the ground is likely to shift beneath your feet?

    I am a little worried about property now in Oz simply because a combination of the first home buyers grant and low interest rates may have added some fuel to the fire. I do not reckon there will be a crash, but maybe prices will remain flat for a while in many areas?

  • 18 Ned S // Aug 14, 2009 at 10:44 pm

    G’day Greg – I’m not even doing “short term” planning as things stand perhaps? That could be a bit of an overreaction – But with only a few months to go, I don’t think I need to.

    Irrespective, the Henry Review has the potential to be very important. And I think it will be because we don’t a wise political leader – Give Rudd something that will keep the majority happy plus cater to his socialist leanings and Kev will be absolutely chuffed.

    A couple of thoughts:

    The government always needs lots of money (a bit more than usual now) but all that ever changes is who they take it off.

    Oz housing is likely to get a bull run I think – Every investor with even one eye open knows it’s a protected species now and the unwashed herd knows that when their super crashed, housing didn’t. Investing is more about perceptions and even perceptions of tax payer funded support than it has ever been I suspect?

    So short of Great Depression II, Oz housing looks pretty safe to me. (The RBA even conveniently issued interest rate forecasts that showed noone had to be scared of borrowing to buy it for maybe two years?) They have a bubble – But they will divert lots of resources from elsewhere to hold it together – Until they can sort it out with inflation. And short of Great Depression II, Oz has the capacity to do that.

    There will be nothing in the Henry Review that will fundamentally damage the prospects of banks or miners or the real estate industry to turn a profit – Leastways that isn’t compensated for in other ways which are angled towards making desired societal changes is my take? It’s the societal change orientated stuff I’m waiting for more info on.

  • 19 Ned S // Aug 15, 2009 at 8:38 am

    Capital gains tax on family homes worth more than $2 m ?

    http://news.smh.com.au/breaking-news-national/govt-mulls-taxing-expensive-family-homes-20090815-elez.html

    Which would indicate that my mate’s concern about negative gearing being done away with is unfounded.

    There is just a possibility I suppose that they are looking at the ability to buy an expensive home on retirement and thereby reduce assets to the point where the retiree receives a part pension with all its many benefits?

    Commonwealth administered land tax rather than state, so that people who own investment properties in different states aren’t missed, would seem logical.

    Do away with the ability to avoid triggering CGT by leaving property to heirs on death. (Although leaving it to a spouse may be OK. Certainly if the spouse lived in it I suspect.)

    Lots of others one could dream up without trying too hard I guess?

    So it’s just a good time to “wait and see” I think. With commonsense saying that some things will be tax advantaged too – Although the media doesn’t report them. Potential bad news attracts more readers than potential good news eh? Cheers.

  • 20 Greg Atkinson // Aug 15, 2009 at 9:29 am

    I worry when I see taxes skewed towards the so called wealthy. If a couple work hard their entire lives, save money and decide to buy the home of their dreams when they retire then why should they be hit with a tax when they sell their primary residence?

    I know there are a lot of problems with the way negative gearing works now but at least it encourages investment in property and allows people to build wealth to support themselves when they retire. I thought these were good things?

  • 21 Ned S // Aug 15, 2009 at 11:45 am

    Australia is a country that has strong socialist leanings. The indications are that these will become stronger over time. Building wealth to support oneself when they retire will not be seen as an especially good thing. (Rudd halved the maximum tax deductible voluntary contributions to super recently if I recall correctly?) Things like taking on debt and responsibly paying it off and contributing one’s “fair” share of tax will be seen as good things.

    There’s lots of reasons for this. But a real big one is that in the absence of strong multi-generational and relatively broad based family structures, ultimate responsibility for people’s welfare sits very firmly with government.

    It’s an old problem. Any society that “progesses” past tribalism and its family structures are not held together through such things as economic necessity and a widely accepted belief system that places significant emphathis on family will encounter it I suspect? At least when times get a bit tough.

    But comparatively privledged and developed Western democracies do not seem to have done a very good job at all of coming up with a solution to the problem. In lots of ways, they actually seem to have exacerbated it perhaps?

    And such a solution as they do have, which is to give money to government so that government can dole it out as they see fit probably isn’t one that sits terribly naturally with human beings who tend to be biologically programmed to think in terms of the much more immediate me and mine. Certainly when times are a bit tough anyway.

    So I’ve got very strong reservations about seeing Western ambassadors galloping around the world singing the praises of the system to the less enlightened.

  • 22 Senator13 // Aug 16, 2009 at 3:43 pm

    That is a great observation Ned. I think the reason that well developed Western democracies do not seem to do a good job in solving this problem is because the solution would not be popular with the electorate.

    Who is going to vote for someone who is not going to give out any handouts?
    What is in it for me?

    These are just some of the questions that would go through the minds of many voters.

    No wonder Rudd is so popular. Everybody gets a handout. There has not really been much pain so to speak. Glen Stevens just the other day said that this could very well be one of the mildest downturns in recent history.

    It takes a great deal of determination and convictions and not worrying about being popular to go against the grain of this sort of mentality.

    We are not going to see that with this Government. It is too easy for people to be just plain lazy and still get free money. Why would they want to change the Government? And the Government is not going to change its ways because in its eyes what it is doing is keeping it popular and will get it re-elected. Why change a winning strategy?

    Paradoxically, maybe if the financial crisis was more savage it could have broke the mould?

  • 23 Ned S // Aug 16, 2009 at 9:06 pm

    Senator – If I was Rudd I think I’d be tempted to keep the Oz stimulus money in my pocket just in case this is a false recovery. I just don’t get the feeling we are significant enough to make a difference globally.

    I think of the old blokes the depression produced – Their generation was called “The Builders”. They were a rather different breed to what came after (in the West.) Which could probably be described as “The Debt Based Consumers”.

    Maybe the “new” way really will continue to work long term? (Debt based consumption driving growth, with inflation to reduce the real debt over time.) And all we’ve had is a nasty fright. But either way, I know the old way was not risky and the new model is.

    I just wish I had a better alternative to democracy. I haven’t read much of what the American founding fathers had to say, but what little I have, indicates that some of them had some pretty strong reservations about it. I even get the impression that is why the right to bear arms was enshrined in their constitution? The theory being that if the mob ever voted in a bunch of drongos, they’d be a bit reluctant to do anything too damaging as they knew there were lots of guns out there to keep them honest. Doesn’t work nowadays of course – A bunch of enraged average Americans rising up with their hunting rifles are not going to fare too well against the tanks and what not of the military.

    Family is an interesting concept to me. And people’s roles in society generally. I’ve had a reasonable amount of contact with a relatively primitive tribal society that had a large mining company as its “guest”. They wanted all the very good things that come with civilization of course. But there were certainly times when I asked myself if they had any concept of just what they were likely to lose as a result of getting those things.

    Not that there is an alternative for us in the West now. We’ve been on a one way track pretty much since the industrial revolution I guess. But I see the downsides to our ways more than some I guess. And have seen benefits to other ways.

    Including a society (Russia) that seemed more middle of the road in being partially developed while still appearing to retain ties to their agricultural roots. And a stronger sense of family than we’ve got in the West – Albeit from necessity since the USSR collapsed perhaps? (Wikipedia says “With the emergence of Proto-industrialisation and early capitalism, the nuclear family became a financially viable social unit.”)

    I look at democracy and I know it has significant problems inherent in it. And I also know that it is not a system that has truly stood any real test of time. Women didn’t get the vote until around the 1920s. And there have obviously been other systems that have been around much longer than 90 years. Maybe democracy has a saving grace in that it copes better with change than other systems? I’m honestly not sure.

    But either way, I do think the advocates of democracy would do well to show a bit of caution. But “Fools rush in where angels fear to tread” as they say. And we sure do seem to have a habit of voting people into positions of power in the West who don’t seem to entertain many self doubts. And who really are just working on a whole bunch of theory (including an economic one right now). I think it’s a concern.

  • 24 Greg Atkinson // Aug 17, 2009 at 11:33 am

    Hi Ned S – I agree that our form of democracy needs to be looked at and I am a fan of reducing the number of politicians and raising their pay so that we get a higher standard of people running the nations. (as I mentioned back in this blog)

    Actually the ancient Greeks had a system where you could vote someone out of office and that must have made things interesting. In our terms this would mean that the MP’s/Senators could vote one person out of office every year..I wonder who would be given the chop this year in Australia if we had such a system?

  • 25 Ned S // Aug 17, 2009 at 12:26 pm

    The ALP would use their numbers to vote out the opposition’s most promising alternative potential leader I suspect Greg – Smile!

  • 26 Greg Atkinson // Aug 17, 2009 at 12:35 pm

    Ned S – I reckon actually things could get very complicated and factions within parties may even target people on their own side so their faction gained an upper hand. In Ancient Greece the vote was taken via means of a secret ballot and so that allowed people to knife rivals in the back, so in Oz the outcome would probably be very surprising.

  • 27 Ned S // Aug 17, 2009 at 1:20 pm

    No wonder the Greek city states were always at each others throats! (Perhaps not.) But Yes, one would need to be pretty hard up for a job to become an Australian politician.

  • 28 Senator13 // Aug 17, 2009 at 4:40 pm

    Family is very important I agree. John Howard use to say that family is the best social security there is. I strongly agree with this statement. Anything that a government can do to get out of the way and let a family prosper has to be a good thing and should always be encouraged. Anything that detracts from this with a ‘government knows best’ mentality is always trouble in my eyes. Taxing a family home, coming down on families that provide for them self and self-funded retirees should always be given support to the extent that they should never be slugged with higher taxes just because they work hard and are smart with their earnings all because they are “capable” of affording it. The last thing we need is any more disincentives to work in this country.

    With almost wall to wall Labor Governments we are heading down a more socialist path. It is a bad day when a generation expect the government to just hand them everything and begrudge anybody that has worked hard to achieve their own goals.

  • 29 Ned S // Aug 17, 2009 at 10:13 pm

    John Howard got that right Senator. The practice in Oz just doesn’t bear any resemblance to the theory. Typical developed country I guess? (And one that is probably even more fortunate and priviliged than most.)

    Disincentives to work – Plenty of them – Self funded retirement is at best an unrealistic dream for most. And once one realises that, the whole focus changes to thinking in terms of what is the maximum amount that government will let me have (and in what types of asset classes [including super with its own special government determined risks and rewards]) and still get a part pension for the perks.

    Especially given that we all really know just how many Aussies coast along doing comparatively little – And/or spivving the system in one way or another. Why should I work and pay high tax to support all the others who don’t, becomes the mindset.

    Ken Henry has a little problem there with his tax review – On one hand I suspect he could be a socialist at heart? But on the other, he is clever enough to know that you don’t get many tax dollars back from welfare recipients.

    This one is old (7 august 2008) but interesting. Especially given that Oz companies just mightn’t be doing so well anymore. Amongst other things it says:

    “Treasury’s review of the Australian tax system shows there is little scope for lowering personal income tax, as the nation’s total tax on wages is already well below the average of OECD industrialised countries.

    But it says taxes on “investment capital” – including company tax, capital gains and property taxes – are the highest in the world.”

    http://www.theaustralian.news.com.au/story/0,25197,24140111-601,00.html

    Always a pleasure to talk – Cheers!

  • 30 Greg Atkinson // Aug 18, 2009 at 4:03 pm

    Ned S, Senator – I think Australia has not been made to really dig deep (not mining pun intended) for a long time and as a result the nation has become somewhat lazy. We have dogged the last couple of major economic upheavals not simply because our economy was in good shape, but largely because of luck. If we had a well developed manufacturing export industry now we would be feeling the pain, but as it is our manufacturing sector has been in decline for 20 years and our biggest exports are commodities and education. (i.e. foreign students in Oz)

    This means that Australian’s are starting to think there will always be money around and that the government will be ready to bail them out if they get into trouble. In addition it starts to become less attractive for people to put in the big hours because the higher incomes brackets are clearly going to bear much of the burden caused by governments need for funds to pay down debt.

    It is going to be interesting to see how much the nation will change over the next few years.

  • 31 Ned S // Aug 18, 2009 at 7:18 pm

    Greg – It concerns me that the Australian government never seems to consider the possibility that it won’t have the money to bail people out if they get into trouble. (Which is what all welfare really is.)

    Looking at America’s current difficulties should be a wakeup call to even the most ignorant. If it was only America, one could say Oh but they are different. But they aren’t that different – Lots of the developed economies seem to be facing pretty big issues going forward.

    Queensland – Our third biggest “export” is Education. I’d like to think the second one was agriculture. But strongly suspect it is “cuddle a koala” while throwing another “shrimp on the barbie”?

    Education is an interesting one – I’ve got a sneaky suspicion that a huge amount of it is not that Aussie unis teach anything all that clever, but just that when the kid has their Aussie degree, they’ve cracked a passport to the West.

    My concern is that we won’t change in the things where we’d be wise to. And where we do change, it will be change in the wrong direction.

    Wonder why the Tamiflu scripts I bought in Oz were made in Switzerland and not here???

  • 32 Senator13 // Aug 19, 2009 at 4:33 pm

    Watch out for the upcoming tax grabs. If ever there was a time that the government was going to up taxes and use the GFC as an excuse it would be now.

  • 33 Greg Atkinson // Aug 20, 2009 at 8:40 pm

    Ned S – what I find curious is that the RBA and Treasury are upbeat about the Australian economy and yet we have seen the miners (RIO, BHP) report lower profits and say the outlook is unclear, Qantas has had a shocking time and says it will remain tough and we are likely to see less students from China & India for a while.

    So our big export areas, mining, tourism and education are all down and yet the RBA and Treasury reckon the economy is bouncing back? Mmmm…does not quite add up to me.

  • 34 Ned S // Aug 21, 2009 at 9:01 am

    True enough Greg – If the Baltic Dry keeps heading down for another couple of months a few punters just could start to suspect the rally is a bit ahead of itself too I guess. Although Asia is probably the bit of the world one wants to be in for the next 30 years regardless. Got me tricked how you feel comfortable investing in shares. Seems to me the whole game is rigged by and/or for the big players. Oz residential RE is rigged too of course. But at least it isn’t rigged by the players themselves. And to date at least, all players have been pretty much affected equally.

  • 35 Greg Atkinson // Aug 21, 2009 at 7:08 pm

    Ned S – The BDI is a bit of a worry as the current decline may indicate the demand for hard commodities into China is dropping off a little. This along with the price cuts would be a major hit for Australian exports earnings. Although the RBA is optimistic about the outlook for the Australian economy I am not..at some point the lower prices for iron ore will meet with falling demand and that may send Australia back into a period of GDP contraction.

    As for investing in shares, well Ned it is bit like Australia playing cricket in England. The Australian team know the pitches will be made to suit the English, the crowd will be hostile, the weather unpredictable and the umpires could do anything. But the team get out there, try and play the best they can, overcome the hurdles and come out a winner.

    Hopefully I can overcome the many stock market investment hurdles and sometimes come out a winner also 🙂

  • 36 Senator13 // Sep 21, 2009 at 8:43 pm

    This is an interesting little article:

    http://www.skynews.com.au/business/article.aspx?id=374838

    I note that Labor Senator Doug Cameron is quoted as saying you should never let an academic economist run the economy and that the IMF, the OECD the ILO and Treasury all agree with the method of stimulus. Who does Cameron think are at these organisations? They are packed with academics!

    And if he claims that not a cent of this stimulus has been wasted then he is living in dream world.

    I would like at least one member of the Government to at least come out and say that there have been some bits that they have got wrong, some parts they have mismanaged and overspent and other areas that are totally unnecessary and they won’t be pushing ahead with them because it would be wasteful and pointless.

  • 37 Greg Atkinson // Feb 20, 2010 at 8:02 am

    Senator I think the pink batts fiasco has finally woken some people up to the fact that the Government is hooked on big spending and is unable to manage what it is spending.

    This editorial in The Australian today is perhaps reflective of the mood starting to take hold across the nation: http://www.theaustralian.com.au/news/opinion/time-to-draw-a-big-line-under-big-canberra/story-e6frg71x-1225832347280

  • 38 Vince L // Feb 27, 2010 at 6:30 pm

    Yep, the pink batts is just the tip of the iceberg. How many useless schools halls have been built? Can anyone tell us what we actually got for all the money the government spent? How much was wasted on consultants, admin, advisors etc?

  • 39 Senator13 // Mar 1, 2010 at 4:29 pm

    I wonder if there will be a generation of school children that grow up resenting Kevin Rudd and his Building the Education Revolution school hall projects because they interrupted their recess and lunch breaks for months and months on end and by the time they are finished they will get no use from them as they will have left the school…

  • 40 Greg Atkinson // Aug 6, 2010 at 2:05 pm

    Well it is now confirmed that Gillard’s BER blew out costs by 12%. So no only did we end up with buildings we didn’t need, they cost more than they should have as well. See: School building costs blew out by 12 per cent (from SMH)

    This is a good good reason why you never give any Government too much money to spend! (and especially when it is borrowed money!!)

  • 41 Ned S // Aug 6, 2010 at 2:41 pm

    I saw that – And that Julia has taken to thanking ‘the Lord’ when she visits Catholic schools – “Prayer; The last refuge of a scoundrel.” – Lisa Simpson.

    Pity there aren’t more muslims in the country – She could convert to Islam and start wearing a burqa … 🙂

    Maybe we’ll get a tie – Similar to the Brits? And Tony and Jules can form a coalition. Both dump their partners and shack up in The Lodge together. I look forward to seeing the happy first family snaps of them strolling around the shores of Lake Burley Griffin hand-in-hand. Tony in his speedos and lifesaver cap with a little fan on top to keep the magpies away; And Jules in her matching red bikini – Replete with said burqa of course!

  • 42 Greg Atkinson // Jan 26, 2011 at 9:03 am

    Let’s think about how much of the wasted money could have now been used to fix the flood damage. I don’t see many in the media talking about how well the stimulus money was spent these days.

  • 43 Greg Atkinson // Jul 9, 2011 at 4:02 pm

    Well now we know, the Building Education Revolution wasted $1.1 billion dollars according to this report in The Australian today: Building the Education Revolution waste blows out to $1.1bn

    This is why I am wary of big spending governments, simply because so much money is often wasted.

  • 44 Ned S // Jul 9, 2011 at 5:35 pm

    But it isn’t a problem Greg; ALP govs know that all they need to do is raise taxes and everything will be all better. This is one of Anna Bligh’s recent efforts:

    http://www.krg.com.au/qldstampdutycalculator/stamp_duty_explained

    Bye bye stamp duty concession for home purchasers. (Except FHBs.) Should be worth a LOT of money to her!!!

  • 45 Plornt // Mar 19, 2012 at 3:44 pm

    “In addition the Government has committed taxpayers money to building and operating a national broadband network without any business planning, has sent stimulus money payments to people not even living in Australia and has not defined in clear terms what will be achieved as a result of spending a huge amount of taxpayers money.”

    What a disaster this broadband network has been. The prices are higher than adsl 2 lol. So many funding decisions by government have wasted tax payers money. If we redirect the amount of money that is wasted jailing people (they are living in luxury almost; I think it costs us 50k per prisoner per year to look after them !) we could save some serious money. Force them to work with 90% tax for 6x the duration of the custodial jail term; that would be great punishment, and less costly (and I bet crime rates fall substantially). Also you could give the money to the grieved parties that were directly affected. That said I think pedofiles and murders, and offenses of that nature should be jailed for life, and they should be completely asset stripped and the assets given to the affected parties. Sick people.

  • 46 Greg Atkinson // Mar 28, 2012 at 5:30 pm

    Plonrt now I read that the Government and RBA are worried about productivity…goodness me, why weren’t these clowns on about this years ago!

    It’s easy to spend, but a lot harder to actually make long term improvements. Clearly the current government can only think of ways to spend.

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