All Aboard the Train to Serfdom – stopping at Harare, Havana, Caracas and Canberra

In today’s AFR, Senator David Leyonhjelm wrote a very compelling and considered review of Prime Minister Howard’s legacy – Don’t be nostalgic for John Howard: he was a big-spending, big-government PM .

Like much of Senator Leyonhjelm’s writings, I found it difficult to argue with.  But in as much as Senator L’s critiques of Prime Minister Howard seem justified, there is one thing that cannot be said of Prime Minister Howard; his governments did not turn the Sovereign Risk dial up to EXTRA HOT as have his 5 successors (counting Prime Minister Rudd twice).

And when I say sovereign risk, I mean more than just the risk of the government defaulting on its debt – which went from a net negative under PM Howard to a projected $600 billion under PM Turnbull in less than 10 years.

The randomness and caprice with which recent Australian governments have attacked citizens and private enterprise in the past 10 years has been breathtaking.  In a very very light Venezuela style, but still Venezuelan.

Let’s have a look:

  • Internet services previously provided by private enterprise now to provided by a state owned corporation.
  • A new international airport to be built, owned and operated by the Commonwealth Government.
  • Mining leases in NSW confiscated by the government without due process (ICAC is an arm of the executive and not the judiciary).
  • Retrospective taxes on deployed mining investments.
  • A government bank regulator forcing banks to increase retained earnings followed by a government hitting total (now increased) retained earnings with a new tax.
  • Assets sold to foreign buyers with pre-approval by FIRB subsequently blocked.
  • A new domestic gas reserve policy with gas extractors having entered into sale agreements.
  • A national energy policy adding inconsistency and unreliability to the network.
  • A bias to increased business taxes and business regulation

For a country that is so so so depended on foreign capital, it is amazing how inhospitable our governments a making us.

One has to wonder what is going on when it increasingly appears safer to invest in Argentina than in Australia.

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59 Responses to All Aboard the Train to Serfdom – stopping at Harare, Havana, Caracas and Canberra

  1. Tim Neilson

    Also Dan the CFMEU sock puppet Andrews “cancelling” a contract for a much needed road which had got bipartisan support right up until it transpired that the CFMEU weren’t going to get their customary multimillion dollar rakeoff at taxpayers’ expense. Admittedly he ended up forking out a poultice of taxpayers’ funds in compensation, but that’s mitigation of sovereign risk, not cure, and is hardly a stellar achievement however you look at it (except through a CFMEU or CFMEU sock puppet lens of course).

  2. Diesal

    You would have to be insane to invest in Australia on these trends. Get out and get your money out while you can.

  3. Nicholas (Unlicensed Joker) Gray

    We need a book! ‘The Australian road to Venezuala.’

  4. Myrddin Seren

    The Cat will be banned under the revived media control commission of the next CMFEU-ALP-Greens Coalition.

  5. Louis Hissink

    The Hebrews had a tradition, the jubilee year that occurred every 50, or so years, when all debts were cancelled and people started anew, assuming I got this right, of course.

    The socialist goal always was to engineer a debauchment of a nation’s currency/money to drive civil unrest which would then lead to civil war and the opportunity to rid socialist society of its betes-noire.

    Putting my cynical hat on, when I was working in the far north Kimberley a couple of decades ago, supervising a geophysical survey over the King George River area, I was staying at the Faraway Bay resort (Mates rates), and the owner had to cope with a EPA inspection/approval etc. One of the EPA types was a geologist listing severely to port, who was surprised when I opined that there were too many people in Australia, etc. (I’m a lying toad but politically sensitive). That’s when I learnt of government policy to subtilely over regulate us to reduce our population. That was then. Today they seem to be importing peoples to spread the wealth, since they realised that Mahomet is not keen on going to the mountain.

    The I learnt they were thinking of de-stocking Oz. Now they are destocking the Levant, think oil, and maybe a third try at establishing a house of worship, already, and housing the goys in the Empires antipodean properties.

  6. Dr Fred Lenin

    A book starring malcolm chavez and ugo shorten ,all hail goldman sachs and the cayman islands .

  7. Bruce of Newcastle

    Unfair.

    Howard had gotten the finances sorted…then we got the mining boom. Costello had money flooding in like no tomorrow.

    People forget the titanic pressure they were under to spend it all on welfare. I remember it. It was endless.

    In the end they did damn well: they set up the Future Fund and coffer-dammed it reasonably well against Labor (since the CPSU would defend it, given it represents their pensions) and they gave a modest dose of middle class welfare to useful stuff like the demographic trap. Thereby reducing the pressure to bring in country shoppers like the childless Europeans are now doing.

    Costello worked out that they could run at most a surplus of 1% before politics would force them to spend it on something.

    About the only alternative they could’ve possibly used the dosh on was infrastructure. And given Labor-Green opposition of everything that would have been difficult.

  8. .

    Bruce of Newcastle
    #2384441, posted on May 19, 2017 at 5:03 pm
    Unfair.

    Chutzpah. This is unfair and then you tell libertarians how to suck eggs?

    It’s not unfair at all. This is red pill knowledge!

  9. Neil

    Don’t agree with this article. Govt debt went from 7% of GDP to 18% under Hawke/Keating. Howard/Costello took that down to zero by 2005 and less than zero by 2007.

    Even if the article has some truths, govt is the pursuit of what is possible. I think Howard knew he had to spend otherwise he would have lost govt in 1998. If Labor was in power debt would have gone from 18% of GDP to 60%

    Costello had money flooding in like no tomorrow.

    Rubbish. Show me in the revenue figures in the budget when this happened

  10. .

    I think Howard knew he had to spend otherwise he would have lost govt in 1998.

    Just like Abbott and Turnbull. Nonsense too. Howard nearly lost in 1998 because he brought the GST reform down as an election policy. Fiscal responsibility was popular at the time of the 1998 election. The only votes he would have lost by cutting more was from unionists who were never going to vote for him.

  11. .

    Howard and Costello could have given back 100 bn of income tax cuts by the time they left office.

    Growth would have been higher as well. If he had the sense to combine work choices with substantial income tax cuts, he might have won office again.

    Howard is what happens when you become a career politician. You develop a soft spot for socialism.

  12. Tim Neilson

    Costello had money flooding in like no tomorrow.

    People forget the titanic pressure they were under to spend it all on welfare.

    The second part is true. The first part is true so far as it describes the mentality of the times. We should recall, though, that the “boom” as it was in 1996 looks like a bust compared with what happened after. Howard and Costello were amateurs at hand over fist squandering recklessness compared with Rudd/Gillard/Rudd and Goose Swansteen or Termite and Morriswan (ok or Abbott and Hockey).

  13. Tim Neilson

    Just seen Dot’s post. I agree Howard and Costello should have tried that instead.

  14. I am Spartacus

    debt is not the sole metric. tax rates are also relevant. if he cut taxes rather and held spending still, debt would have come down also.

    hence why senator l (and i am not a member of the ldp) noted the proportion of taxes relative to gdp – went from 22% to 24% under howard.

    he could have kept taxes as 22% and still reduced debt if he did not spend, and bake in spending, like he did.

    and now we have the current Liberal National government who are incapable of cutting anything. instead, they implement Swanny Saves (euphemism for tax increases)

  15. .

    Howard isn’t a bad guy in this regard, but it seems like a low bar to me for conservatives to measure up against. “Remain solvent”….well most wage earners, educated or not, young or old, can do that. MPs ought not to be in-expendable!

  16. Jannie

    Investment in South Arica, with its tribal kleptocracy neo racist government, is looking more profitable than in Australia. Cape Town real estate is cheap and beautiful.

  17. Bruce of Newcastle

    Chutzpah. This is unfair and then you tell libertarians how to suck eggs?

    Says a guy who wants to let in a horde of muzzo car rebirthers for a borrowed $50,000 ea.
    Suck eggs, Dot.

    “Unfair” is in reference to this: “Don’t be nostalgic for John Howard: he was a big-spending, big-government PM”. I am nostalgic because those two were the only adults we’ve had in Canberra since Menzies.

  18. Art Vandelay

    Leyonhjelm’s article is well done but a little generous in that he doesn’t mention the billions of dollars the Howard government squandered on corporate welfare for any loser industry that put their hand out. Ethanol is great example of Howard rewarding rent-seeking.

  19. Dr Fred Lenin

    Dont worry a lot of the career pollies who have caused this disaster will have retired “to spend more time with their families” and take a part time job on the board of one of the crony capitalist companies that prosperred during their time in politics They will have to attend one lunch meeting a monthe for a paltry $ 200,00 a year . Altruism the strong point of politics and the lawtrade .

  20. Snoopy

    Gawd, Rebel Wilson is a porker!

  21. John Carpenter

    This is all water under the bridge but Costello was too stingy with the tax cuts.He brought in the GST but only cut the top marginal rate to 42%.He bequeathed an unleveraged balance sheet and a $20 billion surplus to Rudd.He could have eliminated the 15% tax on the super guarantee which would have benefited everyone with a super account and taken $9 billion off surplus.It is very dangerous in a democracy for a government to run a surplus as proven by Howard and Costello.This lesson was also repeated in the US where Pres. Clinton’s surplus was pissed up against the wall by GWB.So strong was the surplus that a big issue in the late 1990’s was how the US would set a benchmark bond indicator rate once all the 10/30 year treasury bonds had been redeemed.One solution was to use the rate on Freddie/Fannie debt!

  22. Fisky

    Howard is the architect of the property-immigration-debt ponzi scheme that defines our economy, but it stayed within reasonable limits while he was PM. If there is a property crash in this country we are looking at $80 billion deficits, monthly credit downgrades, and a rise in crime and looting.

  23. Roger

    Howard is the architect of the property-immigration-debt ponzi scheme that defines our economy, but it stayed within reasonable limits while he was PM. If there is a property crash in this country we are looking at $80 billion deficits, monthly credit downgrades, and a rise in crime and looting.

    Moody’s this week warned that Australia, NZ, Canada & Sweden are the most likely developed nations to experience a property market crash. All except Sweden have heavily bought into the immigration ponzi scheme.

  24. iampeter

    One has to wonder what is going on when it increasingly appears safer to invest in Argentina than in Australia.

    Aside from the LDP, there is a complete and utter lack of opposition to the left in Australian politics.

  25. Fisky

    All except Sweden have heavily bought into the immigration ponzi scheme.

    Sweden’s immigration policy is less to do with propping up its housing market and university sector, and more about ideology. What they have is a population replacement program, designed to bring in 100,000 Muslims every year until native Swedes are reduced to a minority.

  26. Oh come on

    If only we were like Venezuela – its downfall will be painful but relatively swift. Then it stands a decent chance of rebuilding. We will be to the 21st century what Argentina was to the 20th. Our demise will be very protracted – several future generations of Australians will know nothing but steady decline and stagnation.

  27. Roger

    Sweden’s immigration policy is less to do with propping up its housing market and university sector, and more about ideology.

    Precisely; the fruit of self-hatred.

  28. rickw

    I’m seriously looking to get out, there are far better places with far less tax and far more freedom.

    Fuck them.

  29. Oh come on

    It’s the darnedest thing – people have such short memories. I remember clear as day the last major downturn we faced in Australia, during the late 80s and early 90s. I was only a child but I distinctly remember the sense of a vast national belt tightening. My parents sold our inner city house and moved further out to a bigger place – it had been on the market for almost a year, and that was not unusual during that period. The For Sale sign had been up so long that it had become rusty and I remember it took months for the real estate company to come and pick the bloody thing up. During those years, you’d drive down streets and just about every second damn house had a For Sale sign in front of it. I clearly recall throughout my childhood and teenage years a sense of money scarcity all around me, despite being from a very middle class background. I remember a new implausibly large shopping centre with space for an anchor tenant and 50-60 shops in our neighbourhood opening in around 1990 – obviously it’d been signed off on in the heady years of the pre-crash 80s – and apart from Coles, it had one shop operating. Literally, one miserable shop. I recall walking through the big empty shell of a place, past all the empty shop space, to get to Coles. The rest of it was a ghost town for years. It seemed like everyone was going to the wall back then. I only began to feel that we were living in a prosperous country in the late 1990s.

    We could easily go back to such times. Easily. In fact, we’re overdue. People have this bizarre faith in the value of real estate, as if it couldn’t collapse into the dirt or something. Hell, they don’t remember what things were like in the late 80s-early 90s?

  30. H B Bear

    A flamingo in every pot.

  31. Oh come on

    Look at what happened to property prices in Nevada during the GFC. Vast, brand new suburbs full of empty houses that, for a spell, quite literally couldn’t be given away. Don’t see why it couldn’t happen here in some of our outer suburbs, with the property market in general copping a massive walloping. Now is a good time to be sitting on a pile of cash and a bad time to be mortgaged to the hilt, I reckon.

  32. WorkerBee

    Howard stole $200 bill of private land, trees and carbon credits unconstitutionally without a cent of compensation , so he could get on the AGW band wagon – and he’s regarded as the best? Australia is socialist and stuffed!

  33. The Vengeful Ghost of Fiona Watson's Moggie

    Vote for left-wing nitwits, get nitwit left-wing results.

  34. Rob

    “Howard and Costello could have given back 100 bn of income tax cuts by the time they left office.

    Growth would have been higher as well. If he had the sense to combine work choices with substantial income tax cuts, he might have won office again.

    Howard is what happens when you become a career politician. You develop a soft spot for socialism.”

    Howard’s spending bonanza was a second best solution to the overtaxing of Australia. He tried to get tax cuts through the senate but they were blocked by dot’s ideological brothers from another mother. It was either baby bonuses and similar crap that returned money to actual taxpayers (disparaged as churn) or “invested” in current expenditure (maybe even in positive things such as voteheards from Iran as some would like -although that’s apparently not socialism).

  35. Oh come on

    Howard ushered in the age of middle class welfare with his Family Tax Benefit, which will never be repealed until the state is utterly bankrupt and no one will lend us a dime. The FTB is a significant reason why 50% of Australian income earners pay no net tax.

    As for the Baby Bonus, wtf? Show me a single productive Australian couple (ie. one that does pay net tax) that wasn’t planning to have children but changed their minds because of the $5000 Plasma Bonus. Just one.

    Such people don’t exist. The Baby Bonus was an incentive only for people who would be tempted to have more children because of a single $5000 cash injection, even though the expense of raising that child would be far, far, far greater than $5000. Unless you’re a perpetual Centrelink client. In that case you luuuurved you some Baby Bonus.

  36. Zulu Kilo Two Alpha

    It’s the darnedest thing – people have such short memories. I remember clear as day the last major downturn we faced in Australia, during the late 80s and early 90s.

    Fair comment – what’s the saying? “You have to be over forty to remember the last recession.” Happy to be corrected. I was damned glad I had the mortgage paid by then.

  37. .

    Bruce of Newcastle
    #2384494, posted on May 19, 2017 at 6:01 pm
    Chutzpah. This is unfair and then you tell libertarians how to suck eggs?

    Says a guy who wants to let in a horde of muzzo car rebirthers for a borrowed $50,000 ea.
    Suck eggs, Dot.

    You’re a loon Bruce. You’re showing latent racism. “Bunch of car birthers!”. Dickhead.

  38. .

    Rob
    #2384661, posted on May 19, 2017 at 10:14 pm
    “Howard and Costello could have given back 100 bn of income tax cuts by the time they left office.

    Growth would have been higher as well. If he had the sense to combine work choices with substantial income tax cuts, he might have won office again.

    Howard is what happens when you become a career politician. You develop a soft spot for socialism.”

    Howard’s spending bonanza was a second best solution to the overtaxing of Australia. He tried to get tax cuts through the senate but they were blocked by dot’s ideological brothers from another mother.

    Rob

    You really are a shithead. Please tell me how Howard making a deal with the Democrats has got anything to do with say Ayn Rand or David Leyonhjelm?

    You sound like a bitter and twisted LNP spruiker trying to tell me that John Howard was the most free market politician, ever!

    No one buys this shit anymore.

  39. Oh come on

    I’m mid-30s, but point taken!

    It really did imprint my childhood years, though. When I looked around me, even as a 9 year old, so much of what I saw looked like depression to me. OK, nobody starved. But I remember kids in my class whose parents were long term unemployed – and I don’t mean the voluntary long term unemployed we see today – they really wanted work. There just was none.

  40. Zulu Kilo Two Alpha

    It really did imprint my childhood years, though. When I looked around me, even as a 9 year old, so much of what I saw looked like depression to me. OK, nobody starved. But I remember kids in my class whose parents were long term unemployed – and I don’t mean the voluntary long term unemployed we see today – they really wanted work. There just was non

    I was making a new career, as an ex- serviceman – middle management, in the engineering sector.. Got “made redundant” – through contacts in the military, I was employed as a “security officer.” I’m glad the mortgage was paid, but the wages as a “security officer” paid the bills.

  41. Fisky

    It really did imprint my childhood years, though. When I looked around me, even as a 9 year old, so much of what I saw looked like depression to me. OK, nobody starved. But I remember kids in my class whose parents were long term unemployed – and I don’t mean the voluntary long term unemployed we see today – they really wanted work. There just was none.

    I remember the same. Kids whose parents were employable in the 80s, but who fell off the wagon once the economy collapsed in 1990. That was the end of the old manufacturing/union economy, which only survived in a few pockets until recently (like the car industry). There were much fewer benefits back then. Basically it was just the dole and not much else. I know one relative, who is doing very well now, didn’t have a proper job until he was about 26, because he wasn’t very academic and had the misfortune of finishing high school in ’89.

    Very different era. We are probably going back to that, except everything is much dearer and we are more entitled.

  42. Fisky

    I remember reading a stat somewhere to the tune that nearly half of over-40 men who lost their job in the 90-91 recession…never worked again in their lives. That’s horrific.

  43. classical_hero

    The recession didn’t affect my family much, so I never felt the effect, but the GFC I felt at work. Before it happened we were super busy and then suddenly it got quiet.

  44. old bloke

    Bruce of Newcastle
    #2384441, posted on May 19, 2017 at 5:03 pm

    About the only alternative they could’ve possibly used the dosh on was infrastructure. And given Labor-Green opposition of everything that would have been difficult.

    They did build the Ghan railway line which was the biggest capital project in Australia since the Snowy Mountains Scheme, Tim Fischer likes his trains. Amazing isn’t it, this project was started, completed and paid for during the Howard government years, unlike the disastrous NBN whose construction will continue for years, well past its technological use by date.

  45. Rabz

    there are far better places with far less tax and far more freedom

    Such as?

  46. Neil

    It was either baby bonuses and similar crap that returned money to actual taxpayers

    I had not thought of that before. Middle class welfare could be classified as a tax cut of some description.

  47. stackja

    1930s ‘scarred’ many, including my late parents.

  48. True Aussie

    Howard was an open borders, gun grabbing traitor. He is the perfect representation of the most entitled generation in Australian history who were handed an immense opportunity and completely destroyed it.

  49. Neil

    ho were handed an immense opportunity and completely destroyed it.

    What immense opportunity was Howard handed?

  50. Zulu Kilo Two Alpha

    1930s ‘scarred’ many, including my late parents.

    Virtually influenced everything my grandparents did for the rest of their lives.

  51. Zulu Kilo Two Alpha

    Howard was an open borders, gun grabbing traitor.

    Never took any of my firearms. Two Hi – powered, bolt action rifles, a 12 – gauge pump action, and a .22 plinker. All perfectly legal.

  52. Neil

    Howard was an open borders

    What borders did Howard open up? It was the ALP who abolished the Pacific Solution. 50,000 boat people later not a single person from the ALP has ever apologised

  53. Tel

    What borders did Howard open up?

    Howard significantly increased immigration intake, both legal economic migrants and the UN refugee quota.

  54. Neil

    Yes but that was legal. Our borders were never open under Howard.

    I cannot believe that is worse than what happened from 2008-2013. 50,000 boat people turned up. Apparently 30,000 of those are still in community detention costing us $3B/year

  55. .

    Yes but that was legal.

    This is tragic. The government declaring morality and economic value by fiat.

  56. john constantine

    Howard gave their education sector the franchise to sell Australian residency with a wink and a nod, packaged up with doing cooking and hairdressing and other vital-to-the-community courses.

  57. john constantine

    Howard gave their education sector the franchise to sell australian residency, so that a family with sudden overseas wealth in a dodgy country could buy an Australian house and a place at a corrupt education course provider, gaining Australian residency for the kid and tax free status for the house the kid lived in.

    The wealth of the family not taxed by the ato, but the benefits of the Australian system sold to them for cents in the dollar by the howard enabled, crony education system provided rort.

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