The limits of state socialism

I was just thinking this very thought myself:

TONY Abbott says the government does not have an ‘endless supply of money’ to prop up businesses like Qantas or Holden, warning the companies must operate profitably if they want to survive. . . .

‘In the end, businesses have to operate profitably. And in the end they have to operate profitably because of their own decisions and from their own resources. They can’t expect government to do anything other than to create … the best possible market conditions for them to operate.

‘And that means getting taxes down, getting regulation down, creating as far as we can a climate of confidence and certainty.’

This is the right answer anyway, but the way the union-run Labor Party raided the cookie jar has meant that the workers in both firms cannot look to the government for assistance. There’s nothing there. So it’s a bit rich to read this:

Federal Labor is demanding Prime Minister Tony Abbott personally intervene to resolve a dispute between government ministers about more taxpayer support for Holden.

Why do they suppose the money has run out? Would they have gone even deeper into debt to fund yet more assistance while trying to pay for everything else they’ve put on the tab?

And this is going to become the story on a wider range of issues. The government will be unable to afford bailouts and injections and forms of assistance that might once have been routine.

And it will roll on from there elsewhere.

And if this is the way it is with Holden and Qantas who represent two of Australia’s oldest and best known brand names so it will be down the line with others and hopefully with other parts of our welfare dependency-ridden state as well.

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42 Responses to The limits of state socialism

  1. Splatacrobat

    TONY Abbott says the government does not have an ‘endless supply of money’ to prop up businesses like Qantas or Holden, warning the companies must operate profitably if they want to survive.

    Another Kodak moment.

  2. Gab

    TONY Abbott says the government does not have an ‘endless supply of money’ to prop up businesses like Qantas or Holden,

    Starting from when? After the next lot of half billion $ is handed out to Holden? Does he mean there’s no more money after that?

  3. The problem with Abbott saying that is that the actions of his government belie his claim. To fix the education problem, they eventually just threw money at it to make it go away. To fix the debt ceiling problem, they made a deal to unlock an endless supply of money.

    As is becoming de rigeuer for this government, there is no backbone when a bit of media pressure is applied. The natural response to a little bit of adversity has already been established. The budget bottom line is the weakest link in Abbott’s decision making chain.

  4. JC

    The budget bottom line is the weakest link in Abbott’s decision making chain.

    So you really think they will blow out the debt and deficit, Monster? That’s no bullshit from you because it’s what you seriously believe, right?

  5. wreckage

    The problem with Abbott saying that is that the actions of his government belie his claim. To fix the education problem, they eventually just threw money at it to make it go away. To fix the debt ceiling problem, they made a deal to unlock an endless supply of money.

    Did you actually pause to draw breath after your diatribes on the necessity of stimulus spending, the irrelevancy of government debt, and how much you Gave A Gonski unlike Cutter Abbott, before launching into that?

    The budget bottom line

    Did saying that make you choke?

  6. James B

    ^ Stimulus spending is worse than useless. Stimulus spending is economic sabotage.

    Also, I say cut education, hard. By that I mean end all federal education spending, no exceptions.

  7. candy

    I reckon Tony Abbott hit the right spot there – much as we want the icons to survive, there comes a time for “tough love”.

  8. They did it with Gonski, they could do it with anything. Abbott hasn’t shown any spine on anything yet, it’s been all blancmange so far.

    Deficits are forecast until at least 2026.

  9. Ripper

    Deficits are forecast until at least 2026.

    Lies. They are aiming for a minimum 1% surplus by 2026.

  10. Ripper

    What a mess they have inherited.

  11. James B

    Ripper, please stop being such an apologist. The budget could be balanced and all the debt paid off within a couple of years if only Abbott would cut hard enough.

  12. Lies. They are aiming for a minimum 1% surplus by 2026

    Yes, and we all know politicians promising things four elections away can be trusted implicitly…

  13. JC

    They did it with Gonski, they could do it with anything. Abbott hasn’t shown any spine on anything yet, it’s been all blancmange so far.

    Deficits are forecast until at least 2026.

    That’s almost 12 years away, you super sized idiot.

    Howard took 7 year or so years to pay down Liars last debt and that was $100 billion. Discounting the $300 billion to the same dollar value it was in 1996 would mean its $215 billion in 1996 dollars, twice the size what Howard inherited. So 13 years to pay down the debt in fine on Howard’s standards.

    You’re fucking innumerate in the worst, most malicious way possible, Donut monster.

  14. JC

    Yes, and we all know politicians promising things four elections away can be trusted implicitly…

    Howard promised it and delivered, you fat idiot. Stop judging the Howard using Liars Standards.

    Now that I wiped the floor with you, fuck off.

  15. Robert O.

    All the airlines fly the same planes, 737′s, 767′s, 747′s, A320′s etc.; they use the same number of pilots, have similar numbers of cabin staff, fly at the same altitudes, burn the same amounts of fuel and land at the same airports. So what is the difference between them and why does Singapore Airlines, for example, run at a significant profit and Qantas have difficulties? The answer is to do with the management side and cost structure of the business, and this is where Australian businesses have problems due to the cost of labour, the cost of regulation, the cost of compliance and so-on. It’s true that the government hasn’t got the money to keep bailing-out Qantas, Holden, and other companies, but it also should consider the amount of cost it continually imposes on business as it legislates and regulates its agenda, and when we get out of sync. with other countries we become uncompetitive. Just look at the over-governance in Australia, do we need six state governments and a couple of territory legislatures and the associated bureaucracies as well as a federal government trying to run education, health, and the environment…..?

  16. JC

    The trouble with you fatboy, is that you go read all the leftwing sites you can possibly cram into that tiny brain of yours each day, but you don’t think. You never fucking think about what they are saying and if it makes sense.

    So all you do , is show up here filled to the neck with leftwing talking points and troll.

    You never for once gave it any thought about the significance of paying down the debt over a period of 12 years and what it meant in an historical context. That’s because you have a tiny fucking brain unable to make it think.

    But, you’re filled to the brim with spite though. That’s the one thing you aren’t missing.

  17. James B

    If you are a centre-left socialist you would do well supporting Abbott.

  18. Howard surfed lazily on the proceeds of the Hawke and Keating reforms, plus a mining boom, and raised tax take to its highest percentage to GDP in living memory without spending enough on infrastructure… and just before getting dumped, slashed tax rates to completely destroy the long term budget bottom line. Abbott will not be so lucky, and he will have to deal with long term problems like revenue and the second Sydney airport that Howard (and Rudd/Gillard) squibbed on.

    You have already declared Abbott to be an abject failure on domestic policy, JC. Are you going back on that rare pieve of incisive analysis?

  19. JC

    Howard surfed lazily on the proceeds of the Hawke and Keating reforms, plus a mining boom, and raised tax take to its highest percentage to GDP in living memory without spending enough on infrastructure… and just before getting dumped, slashed tax rates to completely destroy the long term budget bottom line.

    You appalling, fat idiot. You aren’t even aware that your turgid crap is nothing more than senseless junk.

    You accuse Howard of raising taxes to an extreme and then criticize him fro lowering taxes. You fat thoughtless goose.

    Howard inherited a shambles of an economy that was basically sinking.

    You have already declared Abbott to be an abject failure on domestic policy, JC. Are you going back on that rare pieve of incisive analysis?

    I said I have been disappointed with a lot of the stuff he’s done. However that doesn’t make a term in office.

    Shoo off Monster. You;re not smart enough to be here.

  20. Yohan

    There was a lot to critic the Howard reign for, in that they did not de-regulate enough, they pursued debt financed house price growth as a driver of the economy e.t.c

    But the worst is having lefties repeating the talking points about how Howards tax cuts left us in a structural deficit. As if reducing government taxes and having 10 balanced budgets in a row is a problem.

    They left never made this argument years ago, it was only when Labor blew out the budget with red ink as far as the eyes could see – that they then desperately started searching for excuses.

    The other excuses is the debt Keating left Howard in 1996 was the fault of….. Fraser, who left us with $17 billion debt in 1983. They just adjusted it upwards for inflation, and then claimed it would have been worth 60+ billion in 1996, thus most of the debt back then was actually the Liberals fault.

  21. The Pugilist

    Steve, the Labor party in the end started to believe their own public debt fairytale. They still do. Yet everything they do now is to make life as hard as possible for the new government as possible. Their strategy is twofold. One, put pressure on them to spend at every opportunity. Two, admonish them for not fixing their nightmare budget legacy overnight.

  22. I’ve been fiddling for the last few days with the BTL vote data that was published by the ABC over the last few days, the Tasmanian set at least. In Tasmania, this was about 10% of the total vote, although less than that for the major parties.

    One of the interesting cuts was looking at the splits in ‘aligned’ parties. On the Liberal side, there was a distinct split over Family First; of the voters who preferences the Libs as their first major party, only about 40% included Family First in the top half of their vote, and there was a substantive difference in the votes between the split group that carried across numerous other parties. It should be noted that this was in the context of a group voting ticket that preferenced Family First pretty highly.

    On the Labor side, the split was about 1:2 on the Greens. I.E. about 1/3 of Labor voters preferenced the Greens near last. Interestingly, the difference there was really only reflected in the Family First vote.

    PUP was preferenced highly by all sides, and the votes referencing PUP over the major parties showed a very distinct mix of votes from different sources; disaffected Labor and Liberal voters.

    Anyway, I’ll be putting the various charts up over at my site over the next few days.

  23. do we need six state governments and a couple of territory legislatures and the associated bureaucracies as well as a federal government trying to run education, health, and the environment…..?

    No. The federal government needs to butt out, and we need more states.

  24. Noddy

    It appears ‘our’ economists do not have any answer to the malaise affecting business.
    Rising input costs squeeze any likely profit margin and profit is what keeps business going.
    Financial inflation ensures the squeeze will continue.
    A business has three options; remember they have competitors.
    1. Tighten belts until competition forces them out.
    2. Raise prices but competitors ‘going broke’ undercut their business.
    3. Take over competitors… this is the reason for rationalization and amalgamations.
    Monopoly is the name of the game!
    The rules of the game are dictated by FINANCE aided and abetted by government.
    On the 1st January many business costs will increment by the inflation rate.
    The businessman has to be ruthless to stay in his job today under these conditions.
    A quote to give you indigestion; ‘Permit me to control the money of a nation and I care not who makes the laws’.
    There you have it… FINANCE is above government!
    Now, what constructive action will you suggest?

  25. johno

    ‘In the end, businesses have to operate profitably. And in the end they have to operate profitably because of their own decisions and from their own resources. They can’t expect government to do anything other than to create … the best possible market conditions for them to operate.

    If only Abbott actually believed this! It’s just rhetoric for him. No real convictions.

    Stopping GrainCorp shareholders selling their shares to an American company.

    Talking of guaranteeing QANTAS’ debt.

    Declaring that an Ayer’s Rock tourist resort ‘can’t be allowed to fail.’

    Commissioning a Productivity Commission inquiry, rather than just saying NO to the Holden rent boys.

    And now we hear that they plan to appoint GREG F*****G COMBET to advise them on the work practises and productivity of the rent seeking SPC Ardmona.

  26. Robert O.

    Driftforge, I tend to agree. The Commonwealth has been usurping powers from the states after it took over the taxation system in WW11 as a temporary wartime measure. The High court has sided with the Commonwealth most if the time, and always it’s the external powers over treaty commitments which is used as an excuse. These days it’s World heritage areas and things like half the Coral sea to protect fish stocks.
    However, the days of an impartial public service have gone and most senior positions are decided on a political basis; it depends on who is power. As well, even if a Minister is given good advice from a department, it is then sanitized by his own advisors.

    I mean in all honesty with immigration issues, do you think Rudd/Gillard took much notice of departmental advice. Who dreamed-up the East Timor and Malaysian solutions?
    I doubt if departmental advice was to ban the live cattle trade.
    I think that state bureaucrats, in general, are more professional than there counterparts in Tinsel town, but they have to take their begging bowls there.

  27. Fred Lenin

    What is wrong with gummints borrowing money in our name for usefull purposes like supporting trade union officials keep their cushy well paid jobs by giving money to inefficient businesses? Also I see no harm in borrowing money to give to the untidy nayshuns and foreign “leaders”secret bank accounts ,its the “soshalist ” way ! spend other peoples money ,save your own in overseas bank accounts works for them!

  28. Andrew

    Is m0nty campaigning for his own expulsion? It’s one thing to come here espousing his disgusting socialist views, but to cram a dozen lies about JWH into a paragraph suggests he should be crammed into a box, and delivered to Bob Ellis.

  29. dd

    Noddy, I can’t tell if you’re a socialist or just really confused.

  30. H B Bear

    Anyone looking to understand Holden’s situation should rent one of those David Attenborough videos and fast forward to the bit where the old, sick water buffalo gets stuck in the mud and see what happens next.

    Does anyone seriously think Abbott was going to put a bullet in Holden? The Yanks have done it for him. Even these tax hoovering corporate dole bludgers can’t make the numbers work any more.

  31. rickw

    ‘And that means getting taxes down, getting regulation down, creating as far as we can a climate of confidence and certainty.’

    I don’t think they believe this, or know how to do this.

  32. You accuse Howard of raising taxes to an extreme and then criticize him fro lowering taxes.

    Yes, he raised taxes to an extreme while in government, then created a structural deficit with massive tax cuts just before getting booted out. Not hard to understand, even for you JC.

    Howard inherited a shambles of an economy that was basically sinking.

    He inherited an economy that was in the beginnings of a generational mining boom, and was benefiting from the efficiency dividends of Hawke/Keating liberalisation. His contribution was to raise taxes and overspend on middle class welfare. He was the biggest tax-and-spend PM in the nation’s history. Like his mate Dubbya, he left office just before a global depression after overseeing years of wasteful profligacy.

  33. Tel

    John Howard left the ALP a small war chest, which was very prescient because it helped get through the recession in 2009. They rapidly pissed this away and ran up the biggest absolute government debt in Australia’s history and the biggest relative government debt since the last world war.

    If Howard had left them more, they would have pissed it away even faster. The “structural deficit” is the ALP itself and complete lack of any self-control.

  34. I reckon the auto industry workers should pony up the $1 billion subsidy to US GM’s investors. They could all take a 20% pay cut and hand that over to the auto unions to ‘disburse’, what could possibly go wrong?

  35. ugh

    “why does Singapore Airlines, for example, run at a significant profit and Qantas have difficulties?”

    Wages are a massive contributor @Robert O thanks to the unions. A Qantas pilot makes dramatically more than a Virgin or Jetstar pilot flying exactly the same type of plane on exactly the same routes, same for most other Qantas staff too.

    Same issue with Holden – when car production workers are earning six figures (including overtime allowances and all the other perks) its pretty easy to see why even the US, let alone SE Asia, are far cheaper places to make cars.

  36. ugh

    “It appears ‘our’ economists do not have any answer to the malaise affecting business.
    Rising input costs squeeze any likely profit margin…remember they have competitors.”

    If your competitors are producing the same product @Noddy they will face exactly the same input costs.

    If your competitors are squeezing your profit margins then they are either more efficient than you, or are better than you at negotiating with their suppliers.

    Either way the “constructive action” I’d suggest is to improve your business skills and quit blaming economists who have absolutely nothing to do with any of your business decisions, or bizarre conspiracy theories for your problems…

  37. Struth

    I too believe that the unionised workforce killed itself off in these cases.
    But thats only part of the problem.
    Any company that has to deal with competitors from o/s that base themselves here are never playing on a level playing field when it comes to excessive government regulation and cost of compliance, which is a nightmare for business to deal with. I believe this is much more costly than just the workers wages. You’d have to be a half wit to start an honest business in Australia these days , and especially if you think you’re going to be able to compete. Note I said “honest”
    Without having to take a poliitcian to lunch.

  38. Struth

    Monty’s either coming around to right wing thought or will just use any argument, left or right to argue against the government.

  39. Struth

    Do you reckon this gay marriage thing could be all about the money?
    Just imagine the extravagance these buggers (poor choice of words) would put into a gay marriage.
    Those selling sequence and gawdy colours of anything, Abba music, and the cringe worthy glitz would cost a fortune…………..
    I jest, or do I

  40. Struth

    oops wrong thread , sorry

  41. James B

    Howard was a big taxing and spending socialist.

  42. Noddy

    dd
    #1101241, posted on December 7, 2013 at 9:24 am
    Noddy, I can’t tell if you’re a socialist or just really confused.

    You are right (or should that be ‘left’?) I am nationalistic so that will make me a ‘national socialist’.
    I believe in putting Australia first before all others, charity begins at home and no free feeds to foreigners unless they are nice to us! I left (that word again) school early and my education is still finishing; managed to evade participation in all wars… too young or too old… don’t vote so not responsible for the state of the nation and never say ‘no’ to a ‘hand-out’ or ‘up’. You might term me as a parasitic socialist bludger. I volunteer for anything that guarantees a ‘free-feed’.
    Please don’t tell my friends because they think I am a committed Christian.
    Now, does it really matter to you if I am a socialist or really confused?
    The one thing I would like to know… where does money come from?

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