Treasurer Fredo

I can handle things. I’m smart.
Not like everybody says. Like dumb. I’m smart.
And I want respect.

Fredo Corleone in The Godfather Part 2.

Just when you thought a Coalition Government could not select a worse, more vacuous Treasurer than Joe Hockey, the Hon Josh Frydenberg steps up to the mic.

In a speech to the Business Council of Australia, Treasurer Fredo says:

Corporate Australia must help lift flagging productivity, and hence wages, by investing in growing businesses, not share buybacks and special dividends.

Could it be that business is returning capital because it has no better investment options? You know, because of things like world record energy prices, high corporate tax rates, exponentially increasing regulations and a hostile business environment. If only business had the luxury of “investing” in South Australian submarines, NBNs and Great Barrier Reef Foundations and to fund such investments through force.

Who would have thought that Treasurer Fredo could under-do Treasurer Hockey. Yes. That Joe Hockey, whose first budget was such an emergency that it started with tax cuts and expenditure reductions and finished with tax increases and expenditure increases. The exact opposite of what was intended. That very same Joe Hockey whose failures were rewarded with an Ambassadorship to the US, yet again demonstrating that the Peter Principle in Politics knows no bounds.

But according to Treasurer Fredo:

… the government is doing all that is practicable in terms of policy settings to enable productivity and his message to business is to “back yourself and use your balance sheet to invest and grow”.

and

… share buybacks and capital returns are becoming increasingly prominent and the default option for corporates but is a buyback always the best option for the future growth of the company and therefore the economy?”

For the Treasurer of a Government which seems to have a plan for everything, including most likely a central plan, could it be argued that trying to tell private businesses how to spend and invest their capital is tantamount to trying to socialise the means of production?

Good thing the Government is so well run and governed that it is doing all that is practicable in terms of policy settings to enable productivity. Everything except reducing taxes, reducing regulation, getting out of the way and making the investment environment hospitable. Oh and jacking up “cost recovery fees” on business (taxes by another name), requiring banks to jack up their regulatory holdings of capital (necessitating dividend cuts and more capital raisings) and regulating for banks to make it difficult to lends?

Treasurer Fredo also said:

Productivity is a national task requiring a national conversation.

That’s right. There will be lots of productivity conversations to go with anti-productivity regulatory measures.

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40 Responses to Treasurer Fredo

  1. Chris M

    Spot on Spartacus, this guy seems very slow. He’s probably very good at something but being treasurer isn’t it. How few of these people have any business experience? I want them to have run a cafe (fish shop?) at a minimum.

    In other news I learned Denmark is losing about a billion dollars a year funding Greenland, which seems like a a similar amount we waste on the ABC… hmmm.

  2. mh

    RBA governor Phillip Lowe wants the government to do more infrastructure spending.

  3. Bruce of Newcastle

    Companies only invest if the proposed projects can reach the NPV threshold. That requires the project to make a profit. If the project can’t make a profit because of green tape, electricity and gas costs, payroll taxes and unaffordable wages, then even an interest rate of 0% won’t stimulate investment.

    Consequently when investment of capital can only lose money the companies do the logical thing and hand it back to the shareholders.

    It is up to the government to remove the barriers to investment, which presently are punitive.

  4. Behind Enemy Lines

    Treasurer Fredo
    Posted on 9:10 am, August 27, 2019 by The Artist Formerly Known As Spartacus

    Just went you thought a Coalition Government could not select a worse, more vacuous Treasurer than Joe Hockey, the Hon Josh Frydenberg steps up to the mic.

    Brutal.

    We don’t send our best to parliament.

    The people who actually run the country certainly wouldn’t want be seen there.

  5. Terry

    Chris M
    #3141747, posted on August 27, 2019 at 9:18 am
    “Denmark is losing about a billion dollars a year funding Greenland, which seems like a similar amount we waste on the ABC”

    Now there’s a swap deal we could get behind.

    I reckon The Don might give us a few Bil for it after we take ownership.

    Hell, we might even just give it to him in exchange for support (of the military kind) and unconditional recognition of our Antarctic claims when the treaty expires.

    Bonus: The ABC-types get “free” passage to Denmark with lots of windmills, social justice, loads of imported, artificial victims to gnash their teeth in support of AND the cooler climate they’ve been demanding ever since they discovered they could get state-sanctioned access to our wallets. And all under the “benevolent” Socialist Dictatorship of the European Fourth Reich. What’s not to love?

  6. feelthebern

    Settle down.
    Sure Frydenberg aint no Keating.
    But calling him Fredo is a little on the harsh side.

  7. Terry

    Bruce of Newcastle
    #3141754, posted on August 27, 2019 at 9:22 am
    “It is up to the government to remove the barriers to investment, which presently are punitive.”
    Absolutely.

    This is kiddie stuff. As in, even a kid running a lemonade stand can understand this.

    So, with all of his “education” and an army of bureaucrats and all of their “education” for advice, why do these simple concepts appear to escape ‘Dear Treasurer’ (and his army bureaucratic advisers)?

    Or is it that they do ‘get it’ but that the publicly funded sinecures we provide to these “servants” simply cannot compete with latent rewards provided by other “interests”.

  8. @Behind Enemy Lines

    We don’t send our best to parliament.

    Best what? We don’t want our best in Parliament. We want our best in the private sector creating jobs, wealth and actual growth.

    What we don’t want in our parliament is our worst. Ok Treasurer Frydenberg is not the worst, but getting closer than prior.

  9. Mark M

    You don’t have to be a treasurer to know in which direction prosperity lies …

    “But for developing countries, particularly in southern Asia, coal remains an essential fuel.

    Over the past decade, six countries — Vietnam, Philippines, Malaysia, Indonesia, Pakistan, and India — have all seen dramatic increases in coal consumption.

    Those countries are home to some 2 billion people.

    As coal consumption in those countries has grown, so too have incomes.
    For instance, between 2008 and 2018, Vietnam’s coal use tripled and per capita GDP more than doubled.”

    ‘Climate Action’ Flops at the G-7
    https://www.nationalreview.com/2019/08/g-7-meeting-climate-action-no-agreement/

    “Between 2016 and 2018, Japan opened eight new coal-fired generation plants, and the country has plans to build about 30 more coal plants with a total capacity of about 17,000 megawatts.”

  10. Behind Enemy Lines

    The Artist Formerly Known As Spartacus
    #3141779, posted on August 27, 2019 at 9:48 am
    @Behind Enemy Lines

    We don’t send our best to parliament.

    Best what? We don’t want our best in Parliament. We want our best in the private sector creating jobs, wealth and actual growth.

    What we don’t want in our parliament is our worst. Ok Treasurer Frydenberg is not the worst, but getting closer than prior.

    We can afford to send our best to parliament, for a while. After they’ve done good work in the private sector and gained meaningful experience in life.

    I completely agree with you about not sending the worst. That said, I’m not entirely sure they’re worse now than ever; I suspect the internet simply makes it more obvious and easier to find out. We’ve had generations of chaps like Al Grassby who were shielded by the press, back when the press could get away with it.

    Like you, I’m 100% certain that Australia can do better. I think it’s up to us voters, by not continuing to elect professional politicians and others from the political class.

  11. Infidel Tiger

    Fuck corporate Australia.

    When was the last time these guys stuck their necks out for reform that didn’t involve some bullshit social issue like homos getting hitched or banning plastic bags.

    In a righteous world they would all be broken up and their tax rates raised.

    Corporatism is the greatest evil we have ever faced.

  12. C.L.

    Corporate Australia must help lift flagging productivity, and hence wages, by investing in growing businesses, not share buybacks and special dividends.

    Yes, that’s the way to boost business: tell them what to invest in.

  13. C.L.

    Do the Liberals even pretend to serve the interests of family/small business any more?
    F–k “corporate Australia”.

  14. Andre Lewis

    Fair enough to have a go at the Treasurer on this but he has little control over many of the impostes on business such as planning and development fees, stamp duty, payroll tax, high energy prices etc. If the feds had a decent majority or the ALP were kicked out in Victoria, Qld they maybe could jump on the states to fall in line but currently that will not happen.

  15. Behind Enemy Lines

    Infidel Tiger
    #3141805, posted on August 27, 2019 at 10:10 am

    Corporatism is the greatest evil we have ever faced.

    You make an important point, Tiger. The private sector corporatist bureaucracies (eg the ASX 100) have made themselves part of the political class monoparty, just like unions, universities and major charities.

  16. Kurt

    Why should companies invest in productivity when we’ve had 10 years of ‘quantative peopling’? So long as they can make easy money by importing cheap labour and increase turnover in volume industries (like RE and retail) why bother with productivity? There is a reason why countries like Germany have high productivity while countries like India have low productivity. Such a shame our short sighted corporate, media and political elites are turning us into an India.

  17. mh

    Not very original, Sparty.

    Would work better if it was Josh Cuomo.

  18. max

    trying to socialise the means of production?

    Karl Marx:
    private property is abolished as soon as the property qualification for the right to elect or be elected is abolished,

    Marx wrote that whenever capitalists accept the right of propertyless men to vote, private property is in theory abolished. “Is not private property abolished in idea if the non-property owner has become legislator for the property owner? The property qualification for the suffrage is the last political form of giving recognition to private property.”

  19. Alex Davidson

    The kleptomaniacs who rule us all share a common trait – a lust for power. That means their policies and ‘solutions’ are always ones that expand their power, or at the very least do not diminish it.

    So when productivity is being strangled by red tape and widespread use of government force to maintain all sorts of protection rackets and make-work schemes, we hear these wild ideas instead of rational actions to address the causes.

    One of the worst examples came to light a few days ago: Red tape and taxes now account for an incredible half of the cost of a new land and home package in Sydney. Not 5%, not 25% but 50% can you believe! Even a child could work out where the problem lies, but no, hardly a peep from our rulers to address this outrage by getting rid of the central planning nonsense driving it, because to do so would mean giving up power.

    The same with Fredo. Solutions that would improve productivity such as ceasing meddling with interest rates, removing useless regulations, allowing employers and employees to freely negotiate wages and terms of employment, lowering taxes, reducing the size of government (now at an all-time high) all involve giving up power, and so we get this ridiculous plea containing hints of class envy and nothing else.

  20. Mother Lode

    Fair enough to have a go at the Treasurer on this but he has little control over many of the impostes on business such as planning and development fees, stamp duty, payroll tax, high energy prices etc.

    Then, at the very least, he should shut up telling businesses to expose themselves to more of these with less profitable investment. If he wants to make a difference, if he really wants to see an improvement, he could make the case for all these authorities and the states to back off.

    The federal government desperately wants their cut of the what money business makes, yet can’t help butting in and officiously telling them what to do. Is there any area at all where the government has shown the least aptitude for effective management or spending? If they look back over their shoulders they would see a wasteland.

    He should be on the easiest wicket – taking their foot off the neck of business will result in a damburst of growth and wealth, of which the government would get their skim. They wouldn’t have to do anything except back off and hold their pockets open for the money to just jump in.

    But that would mean going without some revenue this year, and a true addict can never see, plan further ahead, or commit to anything more than the next hit.

    Now he is moaning that business is not effecting policy on behalf of the government that the government itself keeps screwing up.

    Stupid, stupid man.

    We could put him in a pit with a rock, and the next morning I have more confidence that the rock will be out of the pit.

  21. max

    Alex Davidson
    #3141913, posted on August 27, 2019 at 12:14 pm

    Since Magna Carta English people always invoke God and Bible as defence and witness in their fight with Government abuses.

    who is your defender and witness now?
    on which base do defend your rights?

  22. Roger

    Spot on Spartacus, this guy seems very slow. He’s probably very good at something but being treasurer isn’t it.

    Tennis, I believe.

  23. Behind Enemy Lines:

    You make an important point, Tiger. The private sector corporatist bureaucracies (eg the ASX 100) have made themselves part of the political class monoparty, just like unions, universities and major charities.

    The rot has gone too far. The West is stuffed.
    Honestly.
    We’ve allowed the vested interests too much influence, and the dues are coming.
    All you can do is set yourself up for the coming crash and hope you survive.

  24. Mother lode:

    We could put him in a pit with a rock, and the next morning I have more confidence that the rock will be out of the pit.

    I once had the fortune to witness the mindset that inhabits the Parliaments and boardrooms of Australia.
    Late at night near Dubbo, a family of foxes were feeding on a roo that had been hit by a vehicle. They could see me coming, because every now and then a pair of eyes would stick up and look at the approaching headlights, then go back to the buffet. The closer I got the more often heads would raise to see how far away I was. I went over that buffet and guests at about 100km/hr, sending bits of tucker and fox flying.
    To say I was gobsmacked is the understatement of the decade.
    Why didn’t they run? Or at least scamper to the side of the road? Then come back for dessert?
    It took me a few more hours but I eventually worked out why.
    They stayed, mesmerised by the oncoming vehicle, gorging themselves, because no one wanted to be the first to leave the free feed.
    And that picture is the one that comes to mind every time I think of the leadership of Australia.
    We are governed by the only form of life with half a dozen bellies and no brain.

  25. Howard Hill

    Hahaha! Who is John Gault?
    Has this Fredo Fuckwit not heard of the character?

  26. New Chum

    Is he licenced to give financial advice or is he operating illegally as a financial advisor?

  27. Behind Enemy Lines

    Winston Smith
    #3141947, posted on August 27, 2019 at 1:18 pm
    Behind Enemy Lines:

    You make an important point, Tiger. The private sector corporatist bureaucracies (eg the ASX 100) have made themselves part of the political class monoparty, just like unions, universities and major charities.

    The rot has gone too far. The West is stuffed.
    Honestly.
    We’ve allowed the vested interests too much influence, and the dues are coming.
    All you can do is set yourself up for the coming crash and hope you survive.

    Some days I think you’re right, Winston, some days I get a burst of hope. Otherwise I wouldn’t bother posting. Besides, the future is always changing, and a week is a long time in politics.

  28. Percy Popinjay

    I went over that buffet and guests at about 100km/hr, sending bits of tucker and fox flying.
    To say I was gobsmacked is the understatement of the decade.
    Why didn’t they run? Or at least scamper to the side of the road?

    Winston, that reminds of the time I ran over a flock of pigeons when driving through Hollyweird in 1993. Was proceeding along a palm tree lined cement drive about three in the afternoon at a stately pace and expected them to simply fly out of the way, which they steadfastly refused to do.

    They didn’t appear to be chowing down on anything at the time, either. Among the stupidest creatures to have existed in the Planet’s history. Or perhaps simply being in Hollyweird had adversely affected their tiny reptilian brains, in the same manner as existing in the agile and innovative Canberra bubble.

  29. Mother Lode

    Thanks for that, Winston.

    At least there is an integrity in the foxes smashed and burst open, and scattered to the four winds.

    Would that all our politicians had that much decency.

  30. John A

    Everything except reducing taxes, reducing regulation, getting out of the way and making the investment environment hospitable.

    And increasing interest rates, cutting back on the money supply and requiring banks to be honest ie. hold reserves of 100% of at call and maturing deposit funds.

  31. billie

    dear me we’ve had a succession of underperformers in Kooyong, Andy Peacock, Fredo (Petro) Giorgio, and nor Josh Frydneburg

    Andy Peacock was an embarassment, all connections but no substance
    Petro was just awful and I still don’t know how he got preselection. we was disenfranchised by another bloke in the worng party, bit like that chap Turnbull
    Josh looked good at first, we were all ready for something better than old Fredo, it started well, but then he bckstabbed Abbott, after saying he wouldn’t – that’s it for me

    once we were great, Bob Menzies .. ah good times

  32. Robbo

    You can’t have everything you want. Shorten is not PM and Labor is not in Government. Isn’t that good enough? Apparently not because now you are demanding that the Treasurer be smart, or at least as smart as your average bear. The last time we had a smart Treasurer it was Wayne Swan and that worked out well didn’t it. Be grateful for small mercies.

  33. Mother Lode

    You can’t have everything you want.

    You should not be satisfied with second worst.

  34. Squirrel

    “… the government is doing all that is practicable in terms of policy settings to enable productivity”

    If by practicable he means “about as much as the entitled Australian punterariat and vacuous media will let us get away with” he would be reasonably close to the truth.

    As Infidel Tiger pithiliy pointed out above, the business community is generally missing in action when there’s any talk of tough stuff that might upset the social media pests.

    Perhaps the best illustration of the public uselessness of the business class is that they all seem to think it’s a good idea for consumers to have increased spending power and confidence – as long as someone else pays for that.

  35. Frank Walker from National Tiles

    If Fredo doesn’t like FMG paying dividends, can we also stop paying our taxes to his Treasury?

    Imagine if the fat headed idiot did not get paid for doing his job.

  36. Robber Baron

    Josh rates himself as PM material. Thinks it’s his turn when ScoMao eventually falters.

  37. Pyrmonter

    TAFKAS of all people surprises in his opposition to the idea that _something_ should be done about Too Big To Fail. Capital adequacy rules aren’t ideal – better would be to get the banks to break themselves up into smaller units and then commit not to bail any of them out, which would, likely, see them reduce their leverage, but what Fredo’s minions (masters?) have implemented is better than nothing.

  38. @Pyrmonter

    TAFKAS of all people surprises in his opposition to the idea …

    Of all people?

    The banks are too big to fail because the government and the regulators want it that way. If they weren’t too big too fail, what would the regulators and parliamentarians do all day?

    They are too big because they were made too big through government incentives. Want to see them made smaller? Have the RBA get rid of their liquidity windows, get rid of the compulsory rivers of superannuation gold, pass a law that any “too big to fail” organisation is for all intents and purposes a public service and hence management is subject to public service remuneration.

    Watch how quickly they shrink.

    You don’t compensate for regulatory privilege through regulation. You get rid of the privilege.

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