Future prosperity and can we attain it?

The debate over the future of the economy and the Liberal Party in government has got a lot of air-time with Tony Abbott continuing to make Headland speeches.  Abbott is claiming the mantle of Menzies,  and points out that our arrival at a situation where 50 per cent of households pay no net tax resonates strongly with Menzies warnings about the risks of democracy forming coalitions of “leaners” to pillage the earnings of “lifters”.  As Menzies put it in far less serious “leaner” incursions than those of today, “the votes of the thriftless have been used to defeat the thrifty”.

And Maurice Newman was perhaps giving voice to Abbott’s real thoughts about the destruction of his Party’s Menzies legacy, when he said in his own op ed this morning  “Watching the Prime Minister and his parliamentary colleagues give a standing ovation to Scott Morrison as he concluded his budget speech was like watching the band on the Titanic playing as the ship slipped beneath the waves.”

Of course, recognising all this is easier said than doing anything about it.  Even so, it is a sad indictment of the economic scene that so few understand the nexus between expanded and more efficient production and higher income levels.  Such incomprehension among politicians is understandable, conditioned as they are to bridging the gap between the infinite needs of the electorate and the finite capacities of the economy to provide these.  The electoral process gives little incentive to attending to the undermining of those capacities as a result of government’s seeking plunder.

But lack of awareness of the productive process goes even deeper.  As Grace Collier opined, a recent RBA paper nonchalantly pointed out how wages growth had persistently undershot forecasts over the past seven years without the RBA economists inquiring why this was so.

Real wages have actually stagnated over the past six years.  This is unsurprising since the drivers of real wage growth have been going backwards.  Here is the growth of private investment.

Treasury follows the same auto-pilot forecasting methods as the RBA.  While the effects of political assaults on wealth creation are not without their lags, it is as if the government’s economists simply assume the economy is time series controlled and damage to its underlying mechanisms are irrelevant.

In fact, as should be obvious from examining economies as diverse as India, China and Venezuela, policy measures are the real drivers of economic expansion and contraction.

At least since 2008 Commonwealth government spending has been ramped-up, plateauing to the 25-26 per cent of GDP as legislators pay obeisance to discovered inequalities and needs, the latest being education and the disabled.

Marry these with the latest faddish boondoggles and the wet blanket on productivity becomes ever more sodden.  The ALP has its own favourites but the Liberals have delivered adventures into health R&D, submarines with an obsolete power source and now the $8 billion White Elephant Melbourne to Brisbane train line as well as the negative value-added Snowy hydro storage program.

Such government spending excesses have added to other measures – especially in energy.  Among these is the government contrived destruction of the electricity supply system whereby the renewables policy has driven a threefold increase in the domestic price and a deterioration in the system’s reliability.  That will be aggravated by the Finkel report which will doubtless press for more actions to destroy low cost electricity provision.  And State government embargoes on gas production have aggravated all this.

It is difficult to see a path forward.  The knives are now out for Turnbull as the 30 consecutive months of unfavourable opinion polls roll in.  Peter van Onselen, predictably wants the baton handed to Julie Bishop, a proven poor performer in the all-important task of economic management and a replacement of one soft leftist by another.

Abbott clearly conceptualises a way forward and while it is easy to say that he had his chance and blew it, the alternatives are hard to see.  The Australian policy swamp is deep but all potential drainers have contributed to its murk.

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67 Responses to Future prosperity and can we attain it?

  1. john constantine

    Their skeleton-that-leaks, julie bishop-mugabe, is in New York handing out 44 million to their united nations.

    Then she has a taxfunded party for millionaire crony socialism, to sink her zombie teeth into the throats of the few freeliving survivors of the apocalypse.

    She can beat shorten and the turnfailure can’t.

    Poor fella my country.

  2. max

    Abbott must challenge.

    Even if he fails it will succeed.

    Turnbull will look so bad he will be on life support and the next challenge will succeed.

  3. Bruce of Newcastle

    Hehe!
    Reminds me of IMF’s world GDP growth forecasts.
    Maybe both the RBA and IMF use lots of viagra.

  4. john constantine

    The way forward is for super funds to be required to ‘invest’ in filling the unfunded infrastructure debt pit.

    Maybe in return for the super funds getting government guaranteed banking licences.

  5. john constantine

    The wages graph needs to be split into two distinct graphs.

    The graph for the proles of the outside ‘donor’ economy will look crap.

    The graph for their lefties of their insider crony socialist oligarchy, the ‘leech’ economy will be golden.

    The millionaire socialists of their abc, with both partners on the government gravy train will feel no conflict declaring that:

    “We are such a wealthy country”, because their insider country is feasting on the lifeblood of the economy as a whole. you can’t see it is a ponzi scheme from the top, just from the bottom.

  6. Andrew

    There will never be a better PM than A666ott again. And I don’t mean that in a good way – just that he was the best PM in the period 2010 to our lifetimes. The TURNbull COAlition Team is doing a much worse job in every respect, the SLF-Albo-Blabbersac clusterfuck will combine all the worst features of Gillard, Whitlam and Doug Cameron. They will eventually be replaced with a soft-left Labor light from the Photios branch, probably someone like Pahn (but not Pahn, who will be out). Maybe Zimmerman.

    Then it will be Time for a Green PM, and after that it probably won’t matter any more.

  7. duncanm

    Reminds me of the sales forecasts in the company I work for.

    No-one ever seems to ask then why they should be believed when their last four annual forecasts were completely bogus.

    If I put together a development schedule or a cost forecast for a design like that, I’d be crucified.

  8. mundi

    Do they even give a reason why they think wages will go up 0.5%? Or is it just non-sense like the RBA’s statement on monetary policy every first Tuesday of the month, where they just mumble something about world economy and inflation.

  9. struth

    If you are looking at the liberals at all, you are the problem.
    Never vote left.
    Abbott was a goose.
    He just wasn’t a UN hack.

  10. Irreversible

    Alan Moran: what the hell are you up to here?
    The reason we have a large proportion of citizens net neutral or in the red on tax contribution is simple; Governments have been giving people cash. Howard was just guilty as anyone, gifting big slabs to middkle class welfare. Abbott, who appears to be claiming a newly invented persona, determined to add to it massively with PPL despite opposition from everyone on the planet!
    As for the investment data you choose, a monkey with a crayon could show you that the commodity price effect bloated capex through the 2009 peak and slid when the big LNG projects were complete. In other words, we just had a boom, which also inflated salaries. Everyone knows that. You simply choose to ignore it.
    If we persist with economic debates that are purely emotional we will gift the idiot Shorten a solid go at running the place. It will be partly your fault because you promote distraction.

  11. Paul Farmer

    Irreversible……………I think you’re being a bit harsh on Alan. Alna’s point is the decline from the height of the mining boom years, no one is denying we had a mining boom, but unfortunately from that period we baked in commitments such as the NDIS we simply couldn’t afford and no politician has the gumption to say it how it is.

    As for people who keep bagging Johhny for middle class welfare in his time, there is one big and very relevant difference. We were running a budget surplus then not a massive deficit with no debt by the end of his and Costello’s tenure. It is the right thing to do when running budget surpluses to give money back to the humble taxpayer. Would you rather them give the money to the rich or the middle class or just the poor ? As Menzies anniversary speech tonight highlighted , its the middle class that is the backbone of the country, so giving back to them at that time was not an unreasonable thing to do. Blaming Howard some ten years on for the mess we are in today is total joke…………..our politicians today have to make some hard decisions, the doing good to all is just unsustainable and we have arrived at the ridiculous position of paying almost $ 20 billion a year in interest. That’s the ultimate rip off of future generations and its time somebody from the liberal emerged with some gumption to sort it out before we end up like the Venezuela of the South pacific.

  12. Rob MW

    In fact, as should be obvious from examining economies as diverse as India, China and Venezuela, policy measures are the real drivers of economic expansion and contraction.

    Alan – I didn’t think you needed to leave the our economic zone to make the same point: “In fact, as should be obvious from examining economies as diverse as ACT, Girilambone and Tasmania, policy measures are the real drivers of economic expansion and contraction.”

  13. Mark A

    Paul Farmer
    #2387414, posted on May 22, 2017 at 11:32 pm

    As for people who keep bagging Johhny for middle class welfare in his time, there is one big and very relevant difference. We were running a budget surplus then not a massive deficit with no debt by the end of his and Costello’s tenure. It is the right thing to do when running budget surpluses to give money back to the humble taxpayer.

    Paul, what they are bemoaning is that not more of the dosh was left in the kitty by Costello to squander by labor.

  14. stackja

    The problem again is ALP.

  15. ned

    Government Is the Problem, Not the Solution
    The system has conditioned people to Pavlovian responses.
    Not enough money for a house? Government will provide assistance.
    Not enough money to have children? Government will provide maternity leave.
    Not enough money to pay for childcare? Government will provide further benefits.
    Not enough for retirement? Government needs to pay more in welfare and other subsidies.
    Not enough money for medical expenses? Government will provide more funding for healthcare.
    Not enough money for education? Government will throw another few billion at schools.
    Not enough money to maintain a good lifestyle? The RBA will provide lower interest rates.

    In a recent report released by KPMG, it was found that (emphasis mine):
    ‘…60 percent of [Australian] households pay the same or lower amounts of income tax compared to the payments they receive from the government — in essence, 40 percent of households are subsidising income for 60 percent of households…’

    Treasurer Morrison has given us his version of Swanny’s ‘Resource Super Profits Tax’ (RSPT).

    The reality is the banks won’t pay it.

    The banks are forced to do the government’s dirty work and collect the extra $1.56 billion in revenue by charging investment loans a higher interest rate.

    https://www.marketsandmoney.com.au/government-problem-not-solution/2017/05/22/

  16. ned

    Guys on the top are in it for the power they do not care about you and me

  17. Jannie

    Abbott would be no better, he is afraid of the ABC and the bureaucracies. Meanwhile the voters have become accustomed to their entitlements. The bureaucracy and the welfare eaters are happy to spend other peoples taxes, they are happy to spend the taxes of unborn children. Only a dictatorship could end reliance on the welfare vote, and shoot all the ABC hacks. Inevitably that will be necessary for the survival of the bureaucracies.

    The Liberals have worked out that its too hard to wean voters off the welfare habit, and much easier to win them with the promise of easy living and free goodies.

    Soon the two parties will agree that like Europe, it is necessary to replace the voters with more fertile people from Africa and Arabia who will produce the taxpayers to sustain the bureaucracy, and wont complain when the dictatorship switches off the welfare and sorts out the ABC.

  18. OldOzzie

    Judith Sloan sums it up in today’s The Australian

    There’s plenty to privatise at the Treasury Department

    This year’s budget is based on a fantasy concocted by the Treasury that, in turn, is willingly accepted by Scott Morrison because it suits his political purposes. The pretence that company tax receipts will grow by 40 per cent in the next four years and income tax receipts by close to 30 per cent allows the Treasurer to make the far-fetched claim that the budget will record a small surplus in 2020-21.

    He can spend up big, showering money on health, education, infrastructure and pet projects while professing to be a sensible and credible economic manager. Without the cover of Treasury’s faux forecasts, cloaked in a veneer of economic mumbo-jumbo, he would be unable to make this claim. The Treasurer and Treasury are lying in the same bed.

    From my point of view, this raises the question: how do we solve a problem like Treasury?

    The quality of the work undertaken by Treasury has been in decline for at least a decade. Traditionally, Treasury was regarded as a prestige department and working there always carried a certain cachet.

    But the combination of its appalling forecasting record and the provision of ill-informed, secretaryabysmal policy advice have robbed the Treasury of the status and respect it once enjoyed.

    Neither is the appointment of the present departmental secretary likely to slow the decline of an agency that now lacks credibility.

    John Fraser had once worked at Treasury, reaching the exalted position of deputy secretary, before leaving to develop a successful career in international investment banking. He was appointed as secretary to the Treasury by the Abbott government in 2015, with the enthusiastic backing of then treasurer Joe Hockey.

    There are so many examples of egregious errors in the forecasting of the budget outcomes that it is difficult to know where to start. Let me just give you a flavour of the mistakes.

    In the 2010 budget, the claim was made that government receipts would top $399 billion in 2013-14; they came in at $363bn. The claim was made that there would be a cash balance of $5.4bn for 2013-14; there was in fact a deficit of $44bn.

    In the 2014 budget — I’m not just picking on Labor governments — government receipts this financial year were going to reach $437bn; they will be lucky to get to $406bn.

    I’m sure you will agree these are not trivial errors; they are out-of-the-ballpark mistakes that have serious consequences. In particular, they en courage governments to embark on unaffordable spending programs and lead to the unsustainable accumulation of government debt that will have to be paid off by our children and grandchildren.

    Quite a few of Treasury’s forecasting problems start from its inability to estimate with any pre­cision what is going to happen to key economic parameters: real and nominal gross domestic product growth, changes in employment and unemployment, the terms of trade and movements in wages.

    When Martin Parkinson was Treasury secretary, he commissioned a lame, supposedly independent report analysing the department’s economic forecasting performance. The review panel was strictly barred from considering the short-lived mining tax; you know, the one that was forecast by Treasury to raise more than $12bn in four years but raised nothing. The conclusion was that the Treasury was no worse than private sector forecasters but all were bad, particularly at picking turning points in the economy.

    But here’s the rub: Treasury has hundreds of staff and these private sector forecasters have a handful.

    There are more than 850 staff at Treasury, with more than 80 in the senior executive service. It is costing taxpayers close to $200 million to run this. Unsurprisingly, Morrison decided to top up Treasury’s funding in this year’s budget by close to $30m across the forward estimates. Note also that, in recent years, Treasury has been spared the efficiency dividend that applies more generally to the public sector.

    A core function of Treasury is to model the tax base and thereby generate reliable estimates of future revenue. On this score, the Treasury fails miserably. Indeed, in the information provided in the budget papers, it is conceded that the standard error on revenue projections four years out is as high as plus or minus $50bn, close to 3 per cent of GDP.

    Recently, there have been some minor changes made to the forecasting methodology used by Treasury, but the optimism bias that has been so evident in the past decade or so remains in place.

    Where once the trend growth of the economy was simply bunged in for years three and four of the forward estimates, a guess is now made about what the actual figures will be. Instead of simply using the most recent information on commodity prices at the time of the budget and applying them for the next four years, more realistic estimates are now used.

    Even so, it is not clear whether these changes have made any real difference to the excessive san­guinity of the underlying figures in the budget. Does anyone believe that wages will be growing by 3.75 per cent in four years given that they are growing by less than 2 per cent today? And does anyone believe GDP will be growing by 3 per cent in 2019-20 and 2020-21, notwithstanding the Treasurer’s bald assertion there are better times ahead (or so he hopes)?

    So how do we solve a problem like Treasury? For starters, close down the expensive and pointless Sydney and Melbourne offices created by the incumbent secretary. And the decision to create yet another division, to deal with structural reform, headed by an economic modeller, is impos­sible to justify. Treasury hasn’t been involved in devising significant micro-economic reform options for years. And as for Treasury’s boasts — check out the annual reports — that “significant work on tax reform” is being undertaken within the department, please spare us. And bragging about the work on “competition and productivity-enhancing reforms”? Let’s get real. And what about this howler: Treasury is the “pre-eminent economic adviser”?

    It’s time for Treasury to take some of its own medicine. Why not contract out the economic forecasting function using a competitive tender? It certainly would be cheaper than having the huge standing army of underperformers. When it comes to policy advice, particularly in relation to tax, there are many alternatives to Treasury.

    The core problem is that this government has no incentive to rein in Treasury. As long as it serves up more dollops of economic claptrap that suit the government’s political aims, the Treasurer will just go along for the ride. Pity the long-suffering taxpayers.

  19. Diesal

    Sell your assets and leave.

  20. cui bono

    Howard churned the taxpayers’ money. Should have just cut taxes straight up and thus painted a line in the sand – low taxes – that poncing pollies dare not cross.
    But he wanted to do some poncing himself -baby bonus, FTB, school chaplaincy FFS- so the benefits of the boom were redistributed benevolently.
    The way out is to drop the tax-free threshold, or freeze it, and grow a constituency who cares about tax and its use.

  21. Deplorable

    Soon the two parties will agree that like Europe, it is necessary to replace the voters with more fertile people from Africa and Arabia who will produce the taxpayers to sustain the bureaucracy, and wont complain when the dictatorship switches off the welfare and sorts out the ABC.

    Do you seriously believe these “fertile” peoples would produce “taxpayers”?

  22. john constantine

    http://www.abc.net.au/news/2017-05-23/government-mp-calling-for-increase-refugee-resettement-program/8548748

    “we have five times the people that go to the Grand Final waiting off our shores “

  23. Dianeh

    At the time, I thought Howard should have created some sort of sovereign fund and paid a dividend to the community in the form of yearly or maybe monthly cash handouts. Therefore if no money in the fund, their would be no cash handout. This would have been incentive to keep,the budget in balance, supported by the voters as the cash returned can only happen if the fund is solvent,

    Never understood why he went for increased welfare instead

  24. Dianeh

    Their should have been there. Combination of a cold, early morning and autocorrect

  25. john constantine

    “What I say to people when they are in fact a little apprehensive about Australia taking more refugees … it’s really about what are the services we’re going to provide, what are the communities we’re going to put them in and how are we going to get them integrated into our communities.

    “If we put that work around it, we can actually do this.”

    —–It is about the services we will supply to the imported client herds.

    The debt funded services.

    Their andrew broad boost his simple ponzi scheme, if the government borrows billions, imports refugee clients, pays the left to service and indoctrinate the clients, then the tax churn will repay the borrowings and the bufgewt will magic pudding its way to surplus.

    Mind you, i may be wrong, and this may be sound economics. Maybe nobody has ever borrowed enough and imported enough refugees before for it to work.

  26. john constantine

    If their nice compassionate mr broad had done anything to prevent the genocidal Murray Darling Basin project deindustrialising agriculture, maybe he wouldn’t have to import vast herds of refugee clients to build a brand new economy on debt funded welfare services.

  27. cui bono

    Andrew Broad – another god-botherer who wants to big note his compassion, because its easier than taking the hard steps to get our welfarists to work in the regions.

  28. john constantine

    Lot of government owned buildings in nice mr broads electorate have gone through the council planning process and been accredited for communal refugee housing, they just await the client herds that will bring debt funded ponzi prosperity on the wave of welfare services.

    Ten thousand sponsored refugees, plus ten thousand partners, plus thirty or forty thousand children means a lot of borrowed money to be thrown at rural communities.

    One shire is even backing a startup project that has no economic future, because it will enable them to import a client herd. When the doubtful economics are pointed out to the shire, the officials say , yes the project will crash, so that is why they must import their client herd so quickly so they can get theirs while they can.

  29. Nerblnob

    There is no Thatcher or Reagan on the horizon with the guts to take on the howlers, or even a Hawke/Keating.

    Trump may or may not be the answer for the US. It’s still early days.

    There’s nobody in Australia even approaching that level of political will.

  30. Rabz

    Sell your assets and leave.

    I’ve scheduled this course of action for late 2018.

  31. OneWorldGovernment

    Keep at it Alan.

    Judith Sloan. I see someone posted your column. I have offered to ‘Citizin Audit’ Treasury, ATO, PMO and Defence. Take me 6 months to start making savings. Internal Control Audits, not financial.

  32. Rossini

    Paul Farmer
    #2387414, posted on May 22, 2017 at 11:32 pm

    +10

  33. Ellen of Tasmania

    If Abbott really meant it, he’d join the Australian Conservatives.

    The Liberal Party is just a shadow Labor party now.

  34. H B Bear

    That wages index graph should be tattooed on the forehead of everyone in Treasury and underneath it written “Hope does not triumph reality”. It would be useful for both the the individual and anyone having to deal with them, especially neophyte Treasures who are unable to bring any independent thinking to the table.

  35. john constantine

    Should local councils be allowed to directly sponsor refugees and their families with ratepayer funds?.

    It may make economic sense to the council, as one wage paid to their sponsored client may displace an obsolete older single Australian male, but bring in a family of six as clients for federal debtfunded programs.

    If the single older obsolete male goes on the disability pension and stays in the shire, the council is a real winner if it can do this a dozen times.

    Is this a ponzi scheme, or is it the new services economy?.

  36. MAGB

    The only good news is that from time to time in Western democracies someone stands up and actually fixes the mess – Thatcher in the UK, Jeff Kennett in Victoria, Hawke and Costello in Canberra. But if no one stands up to do that, you continually get poorer like Greece and Latin America.

  37. Iampeter

    Is there anything Abbott woudln’t say if he thought it would get him more political power. What a slimy sellout. This guy spends hiw whole political carrier helping implement the very leftist policies he is now criticising with a straight face.

    Everytime socialists like Abbott or Howard invoke Menzies its akin to sacrilidge.

    When will this milquetoast, empty suit go away already?

    We don’t need big gov, leftists lile him in the Libetal Party.

  38. Iampeter

    Also my spelling is awesome.

  39. Dr Fred Lenin

    Apologise for changing headline ,” Prosperity will we live long enough to see it again” .
    With the present maggots in parliament thats a valid question ,Drain the canberra swamp then start on the state and jocal gi=overnment maggots .

  40. duncanm

    how can we possibly ensure future prosperity if we allow clown shows like the anti Adanites.

  41. OneWorldGovernment

    I want oil and gas drilling and exploitation on The Great Barrier Reef.

    I want All Australian Forests to be harvested.

    If ‘they’ want coal mines shut down then I want all ports shut down.

    And schools and universities closed.

  42. Fat Tony

    Iampeter
    #2387645, posted on May 23, 2017 at 9:51 am

    Also my spelling is awesome.

    No Peter – yur spelung iz orsum

    Get it right!!

  43. Fat Tony

    Dr Fred Lenin
    #2387646, posted on May 23, 2017 at 9:51 am

    Problem is, Dr Fred, these maggots are the ones in charge of the “draining”

  44. Bad Samaritan

    What I enjoy most about all these liars and revisionist howler-monkeys decrying Howard and his Middle. Class. Welfare. (yeah, OK I realize they are mostly GetUp stooges or else just plain stupid…but still….) is that they are nought but leftist w*nkers.

    OK, so you go into a hardware store and hand over a crisp fifty for something or other which was priced at exactly fifty bucks last month. When the shop assistant tells you it’s now only forty bucks and hands you ten back that’s Middle Class Welfare. That $10′ s a gift I tell’s ya. You didn’t earn that $10 in the first place ya sponger; ya got it as welfare!

    Likewise you have no right to get tax back, because the envious shriekers and screechers like Irreversible, Cui Bono etc reckon that once it’s in the govt’s hand by force…it is their’s to distribute only to bludgers who do not do a second’s productive toil ever. Huh? Well, how come these scroungers come here telling us that nett taxpayers are welfare recipients if they (Irreversible etc) are not bludger ALP/Green drones themselves?

    FFS. Howard / Costello spent the first 7-8 years paying down the ALP’s debt. Then they started putting money into the future fund to try to cover future unfunded govt liabilities and also gave the people who were paying for all this a break. Fuck off you Labor stooges.

    BTW. Cui Bono mentioned the tax churn angle. Why not avoid the “collect then return” process by getting the balance 100% exactly right every time in advance instead, he asked. Hmmm….so that if you get it wrong you don’t have to borrow, maybe? Or, so that perhaps if something unexpected had come up, Costello didn’t want to be caught short, maybe? Or because no-one is quite so fantastic at predicting the future as Cui Bono is at “predicting” the past, maybe? Well?

  45. john malpas

    I can remember when there were immigrants and no refugees.
    You had to have a medical examination and usable training.
    And speak English.
    -1961.
    What happened?

  46. Iampeter

    The welfare and refulatory state happened.

    People immigrate to freeload not for a better life/opportunity.

  47. hzhousewife

    If Abbott really meant it, he’d join the Australian Conservatives.

    I am disappointed that a number of back Liberal back benchers have not already done so, but then, they have no guts.

  48. .

    FFS. Howard / Costello spent the first 7-8 years paying down the ALP’s debt. Then they started putting money into the future fund to try to cover future unfunded govt liabilities and also gave the people who were paying for all this a break. Fuck off you Labor stooges.

    They also left office with income tax rates exceeding 45% and the highest spending government in history. They also could have given back 100 bn of tax cuts by the time they left office. The surpluses were just a gift to the ALP.

    The LNP is dead. Find an alternative. LDP, ACP, PHON, ALA.

  49. Dr Faustus

    Alan: When you look at business investment as a proportion of GDP [fourth chart in this pack], you see clearly that Australia has not seen a collapse in investment to compare with the past seven years since “the recession we had to have“.

    If you believe that private business investment/productivity is an important driver of forward economic growth (sounds stupid, but I’m not sure that this is a widely held concept any more) you would have to see a tiny bit of risk in the cheery budget assumption (tacitly accepted by the ALP) that income growth and bracket creep will fill the government spending gap.

    This is a symptom, the canary in the coal mine, of a general failure of government in Australia.

    Neither the Coalition, nor Labor are responsible financial managers. Both of the ‘Parties of Government’ are committed to reckless public spending – that they know will damage the fundamentals of the Australian social economy – because they have chosen to make it the bribe-price for enjoying the fruits of power in government.

    The Greens and the micro-parties are essentially agencies for various public spending beneficiaries.

  50. Dr Fred Lenin

    Can you all remember me calling the political parties the “national green laboral pardee” , There is barely a hairs breadth between turnbull labor and shorten labor and the green communists ,its three factions of the same left wing party. They have even corrupted the agrarian socialist so calle “national party” . Often wonder what Chifley. Menzies and black jack Mc Ewan woukd think of todays shower ,disgust and total comtempt I should think . Bloody Maggots on the corpse of the country they killed .

  51. Tim Neilson

    For starters, close down the expensive and pointless Sydney and Melbourne offices created by the incumbent secretary.
    I agree with most of the article, but not this. We should instead close down the expensive and pointless Canberra office, or at least downsize it substantially, and get Treasury to do most of its work in Melbourne and Sydney. One of Australia’s biggest problems is the Canberra bubble. If we have to have Treasury bureaucrats, at least they should be rubbing shoulders with people in private enterprise every time they go to a school fete, a kid’s weekend sporting event, or the local supermarket.

  52. Bad Samaritan

    Dot (10.48am). Yeah, the LNP appears dead. However, to make sh*t up to attack very good money-managers like Howard and Costello can only be the work of Labor white-wash minions.

    Bearing in mind that the ALP had been in power for 13 years racking up debt when Howard came to power and that in 1996 there was about $100 Billion @ about 7-8%pa outstanding, it would have been extremely difficult to cover the $7-8 Billion interest and reduce the principle whilst simultaneously cutting tax rates from the get-go. As they say, politics is the art of the possible.

    OK, so they prioritized. First the debt, and then a substantial kitty, and then rebates etc. and then….well who knows? Since Australia was doing fairly well in the mid 2000s it appears that tax issues were not driving companies nor high income individuals away. And that’s the balance; making people willing to pay for “good service”!

  53. .

    Nothing was made up. Costello and Howard merely did what every household in Australia that pays their mortgage or rent on time does – living within their means.

    As they say, politics is the art of the possible.

    Let’s look at the outcome – capitulation.

  54. Irreversible

    Paul Farmer: my point about Moran is that I think he knows, he just ignores it. The point about Howard/Costello is that they had the choice to cut taxes, or to put more in the Future Fund, but they added to the permanent cost to the budget with middle class welfare. As is now obvious, this sort of giveaway politics is really destructive because it’s hard to unravel. Turnbull.Morrison snuck a little bit into the 2017 budget, but not enough to make any serous change in trajectory.

  55. Irreversible

    Bad Samaritan: I have never, not ever, received a dollar from public sources. You, it seems, get plenty.

  56. Robber Baron

    I’m an entrepreneur. I’ve got cash to invest. I’ve got lots of keen investors. I won’t invest one penny in Australia. Asia gets all my money.

    You have to be crazy to start a business in Australia. There are far too many regulations and costs. The sunk costs are too high, the risk is too high, the regulations are too many and costly, the taxes are too many and high, why anyone would risk so much is beyond my comprehension.

    If real wages continue to fall, guess what happens to property prices?

    I wouldn’t be buying at these levels and expecting a capital gain. But, governments will be taxing property big time as they run out of cash. Higher costs with lower disposable income…perfect storm!

  57. Bad Samaritan

    Irreversible (1.23pm). I am that rarest of birds; a professional punter. I have too much cash to qualify for any type of government handout, but pay no income tax. I do however pay all the usual indirect taxes; excise, duties, GST, fees rates etc etc etc. I also help pay the bookies’ tax liabilities.

    As far as other “dollars received”, I do drive around on govt built and maintained roads, go walking in govt funded parks etc, call the govt supplied cops if need-be, and I went to govt schools some years ago(and then got govt paid scholarships)….and a hundred other things that you stridently reckon you do not do. Really?

    BTW. Do you, or have you, ever put in a tax return which resulted in you getting some of your own tax back? Was that welfare? If not, why not?

  58. .

    BTW. Do you, or have you, ever put in a tax return which resulted in you getting some of your own tax back? Was that welfare? If not, why not?

    Only socialists think like this. It is your duty to legally maximise your return and deprive the authorities of revenue within the law. They’ve demonstrably proven a lack of ability to spend wisely and with care from the first fleet to the present day.

    If tax returns are subsidies, then you’re claiming the government has a moral right to your entire income.

  59. Bad Samaritan

    Sorry Dot (12.09pm), I missed your comment.

    It was Irreversible to whom I was referring….”The reason we have a large proportion of citizens net neutral or in the red on tax contribution is simple; Governments have been giving people cash. Howard was just guilty as anyone, gifting big slabs to middle class welfare.”

    That you agree it’s normal to live within one’s means, and that Howard did make the Comm Govt “live within it’s means”. he did not “gift” anything to the Middle Class since it was their own money.. Thus, Irreversible is making the part up that Howard was as guilty as the current chain of profligates. Just another Labor Kool-Aid drinker.

  60. Bad Samaritan

    FFS Dot (2.55pm) That’s exactly what I’m taking all those who use the term Middle Class Welfare to task for.

    Nothing you get from govt is welfare if it’s paid for, or a return of, your own already-paid tax money. If you get a tax return it’s not welfare. If you get a school rebate it’s not welfare if you still pay nett tax. If you claim the diesel excise back on the farm it is not welfare. End of story.

  61. .

    I see. A sophisticated argument. I should have read a little more closely. I totally agree.

  62. .

    I nearly totally agree. Enlargement of middle class welfare was definitely a mistake. It created some quasi institutional inertia that has made the welfare state entrenched. The baby bonus? Utterly regrettable.

  63. Garry

    Watching coalition politicians applauding the Morrison budget was as neausating as watching labor and the greens applauding each other as they sold us down the river when the carbon tax got through parliament. Both major parties are morally corrupt!

  64. Defender of the faith

    Bad Samaritan: remarkable. I have paid a lot of tax because at various times I’ve had high income and in some cases employed by public companies. You on the other hand don’t pay any. But you want some of mine fir your roads etc and as a bonus you want me watch quietly while politicians give my money to people for votes. FFS.

  65. Irreversible

    Bad Samaritan: I’ve no idea at all what you are arguing. But I have more than paid my share of the cost of roads and police and stuff and am still paying income tax. My point is that the government should not buy votes with my money and when it has the means it should reduce taxes for all, not use the money to keep the arses on the leather. We’ve now had a succession of governments that act like the budget is their election fund. I am over it and I’m happy to bag Moran, Howard and Abbott as much as Swan, etc etc until the message gets through that it’s our money and they had better start behaving like it. I mean, did you note the words used by ScoMo in debating the banks? These people think they can make mugs of us all.

  66. Alan Moran

    Irreversible: I am also happy also to bag Moran Howard and Abbott till that message of governments avoiding spending my money gets across. If only people in general were as keen to promote such views and vote accordingly we would not be being troubled with government created living standard declines.

  67. Paul Farmer;

    It is the right thing to do when running budget surpluses to give money back to the humble taxpayer.

    Then he should have cut PAYE taxes.
    It was the right thing to do on two levels – it would have been lethal for Labour to put them up, when next in power; and it would have given the middle classes more of their own money

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