So John what policies do you propose?

Yesterday John Adams self-nominated a challenge for the PMs position. In doing so, John set out a long list of “failure” that he slated home to current PM Malcolm Turnbull. To my mind many of these “failures” were either state matters, or pre-existing problems, or not government problems, while others were positive benefits (I mean who knew that high property prices are a problem?).

Anyway, I digress.

So what would an Adams government do about:

  • The highest level of household debt in our history (both absolute and relative to disposable income)?
  • The highest level of foreign debt in our history?
  • The lowest level of household savings since the GFC?
  • The biggest financial bubble in our lifetime?
  • The highest real estate prices in our history?
  • The highest electricity prices in our history?
  • The highest level of Commonwealth debt?
  • The highest level of drug crime and drug abuse in our history?
  • The highest levels of net overseas migration and has therefore directly contributed to the worst traffic congestion in our capital cities?
  • The most public money on consultants?
  • The lowest international education attainment rates in over 20 years?
  • The most obese and unhealthiest Australian population ever?

First point – household debt is not necessarily a problem. Yes it is high relative to income, but it is not high relative to wealth. In any event, household debt tends to be private debt and has few, if any, public policy concerns. Australia is a net importer of capital and as such will always have high levels of foreign debt. This in, on balance, a good thing. Less foreign debt would mean that we are capital constrained. It also is a good reason why sabotaging the banks is such a bad idea – every single member of the Coalition who voted for the Royal Commission should be purged from public office.

It is not clear to me that we are in a financial bubble or that high real estate prices are a problem. But in any event, I suspect that interest rates are too low that an increase in  interest rates would simultaneously address both those issues assuming they might be a problem (but I don’t think so). it may also lead to an increase in household savings – why bother save when interest rates are so low and the government intends to steal your Super anyway?

Commonwealth debt is a problem and government spending must be cut and debt reduced.

The high electricity prices are a problem and I would recommend withdrawing from the Paris Agreement and ending subsidies to renewables. I might write about the need (or otherwise) of a government owned power plant generation system ala the Monash ginger group in the next few days if I have time.

Crime and drug abuse are state government problems as is education. In any event  I would abolish the federal department of education, and health too, as a budget saving. I am unconcerned about high levels of immigration given that Australia is very highly skewed towards skilled migration. I am not convinced that the population is unhealthy or that obesity is a federal government problem and even if it was I’m not convinced the government can or should do anything about it.

So where does that leave us? Electricity prices and Commonwealth debt. As far as I can work out the Turnbull government is working on both those issues – not pursuing my first choice policies to be sure, but doing something.  So then what is the basis for a challenge?

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38 Responses to So John what policies do you propose?

  1. Andore Jr.

    The captain of the Titanic was doing something.

    Not my first choice of action, to be sure.

    But doing something.

  2. I am Spartacus

    Yes. Doom Lord. This post left me with similar questions. But ISHO, 9 times out of 10, the best policy is for Government to do nothing. If they did that, electricity prices would be lower. Internet prices would be lower and quality better.

    Spartacus’s policy platform would be to send every member of parliament and the top 3 layers of the bureaucracy on “study tours” of the Caribbean for 4 years. The benefit of them not touching anything would more than outweigh the cost of doing something.

  3. v_maet

    Sadly taking over the lib leadership won’t make any measurable difference while we still have a hostile senate balance of power controlled by morons.

  4. Dr Fred Lenin

    Massive debt is never a problem , untill the bubble bursts.and bubbles have a habit of bursting.
    As for addressing the mess created by political foolishness ,it is better to have tried and failed than not to have tried at all . The too hard basket is overflowing ,time for a clean up is long overdue,sweeping away the political class would be the first step to a cure . We owe thi to our children and grandchildren .

  5. As a confirmed Judas goat Trumble hater, it is not a list of reasons why I despise the dolt so much, wasteful expenditure and electricity aside.
    It is easy enough to create a 10 page document on why Trumble and his acolytes are sooo bad for Australia.
    There is also an argument that Trumble is merely a symptom of the disease, not the disease.

    *Any commentary on electricity prices will hopefully consider the downstream impacts.

  6. Leo G

    The captain of the Titanic was doing something.

    It’s long been argued that the captain of the Titanic was preoccupied with a major coal bunker fire and thought it expedient to steam through a field of icebergs.
    Cap’n Turnbull is steamed up with fires on the back benches.

  7. Heartless

    Strange debate. Getting down to the nub: household debt is a public policy issue if public policy is driving private decisions that promote excess risk in things like asset prices. For example the asset risk weighting regulation of bank balance sheets promotes home lending above other asset classes. Also: the economics of large scale power generation units of any kind have always relied on express consumer subsidy. This is why we have 600MW gen sets when the most economic module was always much, much less. Private owners won’t build those without a subsidy (ask the obvious question: why does not Alcoa or Comalco build their own?), so the debate over capital decisions is not only about recent subsidy arrangements. And as a finale, just for the Doomster: Let’s withdraw all public subsidy from universities except for actual research that leads to actual innovation (that is, science and engineering rather than dubious prattle about social engineering).

  8. John Bayley

    First point – household debt is not necessarily a problem. Yes it is high relative to income, but it is not high relative to wealth.

    The problem with this argument is that, as Fred points out above, when the bubble bursts, the ‘wealth’ will evaporate while the debt will remain the same.
    And doubt not, there most definitely is a bubble, and not just in housing.

    In any event, household debt tends to be private debt and has few, if any, public policy concerns.

    Sure, isn’t that what Ben Bernanke meant when the said ‘the subprime crisis is well contained’?

  9. Dave of Reedy Creek, Qld

    A couple of questions on the last paragraph in the article.
    Exactly how is the PM working to bring down electricity prices? From all I have read, we seem to be pressing on as if and I do say IF there was such a thing as global warming, why aren’t we seeking the most efficient modes of generation? Bird and bat munching turbines and questionable solar power couldn’t be the first choice by any stretch of the imagination. The amount of steel and concrete in the base of one turbine is astronomical and what happens when the turbine is finished with? Concrete slabs for a perpetual reminders spread over the landscape?
    Question 2, exactly how is the government working on their debt? We are funding things like 88 million dollars to the Bill and Hillary Clinton rich fund or pouring money into overseas Islamic schools and countries.
    Then there is the astonishing duplication of services to aboriginals (not at all against support) and home nursing, job search organisations in country are like mushrooms after rain, etc, etc the list goes on and on. If you or I ran our houses and businesses like this we would be living under a bridge somewhere.

  10. Dr Fred Lenin

    Artificially low interest rates have created a lot to this problem ,the desparate need to lend to get something out of depositshas created total artificality,like a bubble .all shiny and no substance . Saving the miserable careers of inept politicians able to get “cheap money “ has created an attitude of gimme gimme and the get it with the cost put off into the distant future ,still I suppose we could pay the interest out of politicans and and public service pensions and superannuation .that would be just ,those who caused it pay for it .

  11. sabena

    I would draw everyone’s attention to an item on the Quadrant blog yesterday prompted by Paul Kelly’s opinion piece in the Australian yesterday.It refers back to another opinion piece by him on 15 September 2015.In that article,Kelly said this:-
    “Fulfilling a lifelong dream, Turnbull inherits a daunting task — he must unite a divided Liberal Party, revive its polling fortunes and construct a new and hopeful policy narrative for the country.”
    And this:-
    “He needs to change the terms of the economic debate but his real task is to devise and carry a reform agenda at the election. Beyond this, he must manage the issue of climate change, given his personal preference for carbon pricing, the ALP policy rejected by the Coalition government.”
    And this:-
    “Turnbull must govern for both the conservative and the liberal wings of his party. That constitutes a dilemma — appealing to the centre of politics yet also winning the support of the Liberal base.”
    So by Kelly’s definitions in September 2015,Turnbull has been a failure,but he won’t admit it now.
    The link to the Quadrant item is here:-
    https://quadrant.org.au/

  12. Arky

    Do you think this:

    while others were positive benefits (I mean who knew that high property prices are a problem?).

    ..
    Might be linked to this:

    ..

    So what would an Adams government do about:

    The highest level of household debt in our history (both absolute and relative to disposable income)?
    The highest level of foreign debt in our history?
    The lowest level of household savings since the GFC?
    The biggest financial bubble in our lifetime?

  13. jupes

    I am unconcerned about high levels of immigration given that Australia is very highly skewed towards skilled migration.

    There are none so blind as those that refuse to see.

  14. A Lurker

    This is what I would do:

    The highest level of household debt in our history (both absolute and relative to disposable income)?
    Encourage industry, business and manufacturing into Australia so that jobs are created and people feel better about themselves and so they are able to pay off debt.

    The highest level of foreign debt in our history?
    Stop giving away our or borrowed money to other countries.

    The lowest level of household savings since the GFC?
    Encourage industry, business and manufacturing into Australia so that jobs are created and people will have sufficient discretionary income to put into savings.

    The biggest financial bubble in our lifetime?
    Try and insulate Australia from what is going on overseas.

    The highest real estate prices in our history?
    Reduce stamp-duty and all the other ways Government has its hand in your wallet/purse every time you buy and/or sell a house.

    The highest electricity prices in our history?
    Stop subsidising power generation of all kinds.

    The highest level of Commonwealth debt?
    Sell the ABC and SBS, remove duplication and waste across Departments, stop giving welfare to non-citizens.

    The highest level of drug crime and drug abuse in our history?
    Encourage industry, business and manufacturing into Australia so that jobs are created and people feel better about themselves and so they don’t feel the need to escape into drug taking.

    The highest levels of net overseas migration and has therefore directly contributed to the worst traffic congestion in our capital cities?
    Have a moratorium on all migration for the next 20 years until infrastructure has caught up with population. If people must be brought in, then they should be compatible with our values, heritage, tradition, culture and society, and are able to start contributing back to Australia within a year or two of arriving here.

    The most public money on consultants?
    If you are hiring consultants, then they need to achieve actual quantifiable results and be paid accordingly.

    The lowest international education attainment rates in over 20 years?
    The problem lies with our Universities. Get the Marxists out of Universities, or at the very least, balance them with Conservatives so that graduates come out – especially graduate teachers – knowing and appreciating Western Culture, have a Classical education – and can impart useful knowledge to children.

    The most obese and unhealthiest Australian population ever?
    What people choose to eat or not eat is not the concern of Government. However, if people were gainfully employed then they’d have higher self-esteem and feel less need to compensate with food.

  15. Dr Fred Lenin

    Increase I test rates on borrowing by two percentage points ,then stand wek]ll back and watch what happens .

  16. Dr Fred Lenin

    Sorry interest rates .

  17. mh

    It is not clear to me that we are in a financial bubble or that high real estate prices are a problem. But in any event, I suspect that interest rates are too low that an increase in interest rates would simultaneously address both those issues assuming they might be a problem (but I don’t think so). it may also lead to an increase in household savings – why bother save when interest rates are so low and the government intends to steal your Super anyway?

    The RBA has rates set at emergency lows. As long as that continues I cannot see how Turnbull has a good economic story to tell.

  18. struth

    Such is the standard of Liberal Party advisors that they are unaware they have to run for office in their electorate before they can challenge the PM.

    So step aside John, I called it first…………………….ner…………………….

  19. Tim Neilson

    I am unconcerned about high levels of immigration given that Australia is very highly skewed towards skilled migration.

    Really?

    We seem to get a lot of parasitical sociopathic thugs and terrorists. Or do those attributes count as skills?

    Even assuming you’re correct, our immigration program shouldn’t be just “skewed towards” skilled migration. It should consist solely of it, with very few exceptions (e.g. temporary and targetted refugee quotas such as for South African genocide targets, with great care being taken to exclude parasitical sociopathic thugs and terrorists).

  20. Tim Neilson

    The most obese and unhealthiest Australian population ever?

    The Trumble/Peanut Head duopolistic cartel is going hard for the Venezuela solution to this problem.

  21. manalive

    The high electricity prices are a problem and I would recommend withdrawing from the Paris Agreement and ending subsidies to renewables ..

    .
    Bravo, I may have missed it but I can’t remember seeing a comment along those lines before from the Professor.

  22. mh

    Total Australian credit as of 5 minutes ago: $6, 776, 543, 419, 667. But it’s gone up a lot since then.

    (Representative of aggregate credit outstanding in both the private sector and the public sector)

  23. Colin Suttie

    (I mean who knew that high property prices are a problem?).

    Yet again, ivory tower theory isn’t on the same planet as reality.

    That there are many problems caused by or associated with high property prices should be obvious to anyone capable of critical thinking. I thought thinking was what academics were supposed to do?

  24. mh

    The most obese and unhealthiest Australian population ever?

    Are you including Joe Hockey? Remember he lives in America now.

  25. struth

    Australia is very highly skewed towards skilled migration.

    Skilled in making bombs, cutting heads off, sniffing each others butt cracks at regular intervals, washing only their feet,( without soap), smacking women in the correct method (with sticks) and shoving them in black sacks.
    Professionally skilled at welfare receiving and faking sickness.
    Skilled at getting money for nothing but rooting many wives and growing back hair.
    Has the extra ability to only be heard by right wing people.
    They can declare war on the west, shout kill the infidel and make loud sounds like Allen’s Snackbar, before running people over, yet this miraculously is only ever heard by the right wing people.
    Raping young white girls is a special skill that can actually be achieved without the police or left wing people (but I repeat myself) actually ever seeing it, let alone hearing it.

    Skills.
    These migrants have Plenty.

  26. struth

    The high electricity prices are a problem and I would recommend withdrawing from the Paris Agreement and ending subsidies to renewables ..

    You can still be in the Paris agreement and build 700 new coal power stations in you country and over a thousand world wide, just ask China.

  27. mh

    Question: How much of the world’s electricity is produced by wind power, to the nearest whole number percentage?

    Answer: ZERO percent.

  28. Gavin R Putland

    [H]ousehold debt is not necessarily a problem. Yes it is high relative to income, but it is not high relative to wealth.

    wealth  n. (Austral. economics)  what the greatest fool will pay for your government-created monopoly on the occupation and use of certain tracts of land.

    In any event, household debt tends to be private debt and has few, if any, public policy concerns.

    Indeed it is not a matter of “public policy concern” that we are paying interest to foreign creditors (through our banks) in order to charge each other more for our fixed endowment of land and our existing stock of housing. That counts as “investment” nowadays…

    Australia is a net importer of capital and as such will always have high levels of foreign debt.

    See? Jacking up prices of existing assets counts as “capital” formation.

    …It also is a good reason why sabotaging the banks is such a bad idea – every single member of the Coalition who voted for the Royal Commission should be purged from public office.

    OK, he didn’t say the messengers should be shot. He only said they should be “purged from public office”. Credit where it’s due.

  29. Gavin R Putland

    P.S.: Oh, and the only “skills” required of immigrants these days are bidding down wages and bidding up property values. Everything else is a smokescreen for those two.

    It wasn’t always thus. It doesn’t have to be thus. But thus it is now.

  30. RobK

    I am glad to see the renewed thrust agin the waste that is public broadcasting, now it has a book at its prow, it can steam, binder first into that juggernaut and sink it. 😊 (seriously, well done)
    To me, energy and immigration policy are key fundamentals that need working through and revert competition back to the states.

  31. Sinclair Davidson

    Let’s withdraw all public subsidy from universities except for actual research that leads to actual innovation (that is, science and engineering rather than dubious prattle about social engineering).

    Generally in full agreement. I’d go further and withdraw all subsidy for all research. Unfortunately an op-ed I wrote on this in the mid-noughties has disappeared out of the Fairfax online library.

  32. Makka

    In any event, household debt tends to be private debt and has few, if any, public policy concerns.
    Lol. Forgotten about the Bank Guarantee the Australian Govt to this day supports to underpin our PRIVATEly held banks? When the SHTF, of course private debt becomes public policy, especially when the Australian banking system revolves almost entirely around private mortgage debt.

  33. Makka

    I am unconcerned about high levels of immigration given that Australia is very highly skewed towards skilled migration.

    This is exactly why libertarians deserve the derision they cop. They don’t give a rats about our quality of life. Individual liberty, even the liberty of techie Suresh from Chennai, trumps our quality of life.

  34. Tel

    Forgotten about the Bank Guarantee the Australian Govt to this day supports to underpin our PRIVATEly held banks?

    Yes I agree this is very anti-libertarian and effectively all the major Australian banks have been declared too big to fail. The result is debt brinkmanship, where everyone tries to leverage up harder then demand government help if anything goes wrong. We need a certain percentage of people losing on this strategy to remind the rest to cool it.

  35. Macspee

    Artificially low interest rates are a magnet for lousy investments, criminal activities, and portents for disaster in the long run.

  36. Tel

    The lowest level of household savings since the GFC?

    But generations of big government Keynesians have declared war on savings for all Australia. We even had this concept known as “Superannuation” which was intended as a lifelong savings vehicle, convince people to do the right thing blah blah and now we have an opposition hell bent on raiding it, making it openly their policy that they will raid Super and still they get great numbers in the polls.

    What can any government do when they know eventually they will lose and raiding the piggy bank is irresistible? You can’t lock it down, we have no mechanism to achieve that. Anything can be stolen.

  37. Muddy

    Leo G
    #2684711, posted on April 12, 2018 at 9:50 am
    ….
    Cap’n Turnbull is steamed up with fires on the back benches.

    If the fires on the backbench were legitimate dangers, one would surely have noticed occupants of the front benches beginning to choke?

  38. Rob MW

    “To my mind many of these “failures” were either state matters, or pre-existing problems, or not government problems, ……….”

    Sinc – all State problems can be sorted Federally thru s109 of the Constitution by ‘covering the field’.
    However, like all wannabe’s John has missed the most important failure and remedy of all levels of government, that being the fundamental protection – at the federal level – of property rights including introducing a Real Property Act which would hold the States (@ s109) to s51 xxxi of the Constitution and hopefully halt the insidious and ever expanding regulatory expropriation of, for the most part, real property from landowners.

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