Shareswatch Australia

World attention focuses on the problems of the Greek economy — no doubt with a large helping of schadenfreude added: There, but for the grace of God, go the rest of us is the thought.

A sure sign that an economic trend has been established is when the OECD finally jumps on the trend bandwagon and recently the OECD has joined the group of recently converted economic pessimists. Gone are the days when big borrowing, big spending governments would save the day – the theme of the day now is hang onto your hats because we might be in for a bumpy ride.

Last year when I dared to suggest that the Australian economy was unbalanced and that 2011-2012 could be a period of economic contraction the mainstream financial reporters were churning out “miracle” economy stories. Back then they were obsessed with telling their readers how the mining boom would shower riches across the Great Southern Land, but today many of them have started to sound a lot more cautious.

For a while I have resisted writing about the political situation in Australia simply because it is too depressing.  Of all the possible political outcomes after the election last year it looks like the Australian people have ended up with the worst case scenario – a leaderless dysfunctional government adrift at a time when major ecomic challenges loom.

The devastating floods across much of Australia should remind people that Australia has been for a long time, a land of drought and flooding rains. The floods have tragically not only taken lives, but will also have a lasting negative impact on the economy and sadly the Government seems intent on using the floods as an excuse for it’s own poor management of the economy.

I have been a vocal critic of the National Broadband Network for a long time and was talking about what a mess it would be way before the mainstream media woke up.  So to further illustrate my point I have put together a list of  areas or ways where I believe the taxpayers $43 billion could be better spent and deliver better outcomes for the Australian people.

As readers of this blog will know, I believe that the G20 leaders meetings are generally a waste of time and fossil fuels. After each meeting all we ever get is some vague declaration that basically says all the G20 leaders are wonderful with the mainstream media simply rehashing press releases and happy to go along for the ride. The latest G20 gathering in Toronto, Canada, was no different except that more police cars were set alight.

Well the Government’s response to the Henry Tax Review has been released and even Ruddites like David Koch from Kev07′s public relations program “Sunrise”, seem annoyed by the way the report is basically being shelved. Suddenly the business media has woken up to the fact that Rudd and Swan are economic dills, but as reader’s of this blog will be aware I have been warning about what these two would do to the economy for years.

Toyota’s current recall woes have generated a range of articles about the Japanese economy as journalists rush to get some Japan flavoured content served up to their masters. But often these articles simply rehash the same tired cliches about Japan and it’s economy and don’t provide people outside Japan with a balanced view of what is really happening.

The Australian stock market has finally rallied back up to where I believed the bear market bottom was last year but although this is a positive sign, the Australian economy faces a number of challenges in the years ahead and these might well make it difficult for the market to surge ahead in 2010 and beyond.

I am often critical about the media because they simply do not dig beneath the surface of issues and raise tough questions with the Rudd Government. So I was pleasantly surprised when I watched Leigh Sales on ABCTV’s Lateline raise some awkward questions for the Federal Treasurer. Questions that he could not or would not answer, and that also had him visibly rattled.

Recently Glenn Stevens of the Reserve Bank of Australia (RBA) appears to be taking credit for everything from the robust nature of the Australian economy to the mining boom. What he seems to have forgotten or is not willing to admit, is that the RBA has made a number of  forecasts over the last couple of years that have been very wrong and probably raised interest rates too high in 2008.

It appears that somewhere above Australia there is an alien spaceship transmitting a beam across the continent that makes Australians incapable of rational thought. Few people seem to question how the nation will repay billions of dollars in debt nor do they seem to question what the Government is spending their money on.

We all know the theory of how our Westminster flavoured form of democracy is suppose to work. We the people vote, the votes are counted and we end up with one of the two main political groups running the country. To make sure the group that wins the election and forms government does not get out of control, the losing side is suppose to keep an eye on things and be ready to take over if the people  decide to make a change at the next election. But clearly things are not working that way in Australia at the moment.

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.

It appears that finally the Australian media and by default the wider public are starting to worry about Rudd’s mountain of debt. At first many Australian’s were quite happy to pocket their Government handouts in some crazed belief that is was magic money that would not have to be repaid some day or at least, not by them. But perhaps the latest Federal Budget has finally got people thinking as opposed to living happily in ignorance in the Matrix.