Diary of our stinking Govt.

[boris1gary]

As it's more than 100 days now, it has been suggested that a new thread was needed.  The current govt has been breaking promises and telling lies at a rate so fast it's hard to keep up.

This below is worrying, "independent" pffft, as if your own doctor is somehow what? biased, it's ridiculous. So far there is talk of only including people under a certain age 30-35, for now. Remember that if your injured in a car, injured at work or get ill, you too might need to go on the DSP. They have done a similar think in the UK with devastating consequences.

and this is the 2nd time recently where the Govt has referred to work as welfare???? So when you go to work tomorrow (or tuesday), just remember that's welfare.

http://www.abc.net.au/news/2014-04-20/disability-pensioners-may-be-reassessed-kevin-andrews/5400598

Independent doctors could be called in to reassess disability pensioners, Federal Government says

The Federal Government is considering using independent doctors to examine disability pensioners and assess whether they should continue to receive payments.

Currently family doctors provide reports supporting claims for the Disability Support Pension (DSP).

But Social Services Minister Kevin Andrews is considering a measure that would see independent doctors reassess eligibility.

"We are concerned that where people can work, the best form of welfare is work," Mr Andrews said at a press conference.

[boris1gary]

http://www.theguardian.com/business/grogonomics/2014/jun/09/government-debt-it-all-depends-on-how-yo...

Is Australia's government debt really as bad as Tony Abbott claims?

Viewing debt as linked to GDP and government revenue shows we're in pretty good shape, despite the Coalition's claims 

All political parties love a good catchphrase, and the government’s favourite at the moment relates to debt.

Ministers from Tony Abbott down love to note that we are paying “a billion dollars a month” in interest on our debt, and that they inherited a “record” amount of debt.

So let’s give those claims a bit of a look.

First, we have to remember that government spending, revenue and debt can always be related in a few ways.

The dopiest way is to use nominal terms. This is the way that ignores inflation and increases in population. As I noted when looking at the budget expenditure, it’s the best way to go if you want to show that you are spending more than you did last year.

It’s pretty stupid and should be used only by people who think that a house that sold for $200,000 in 1985 would sell for the same amount now.

But debt is also tricky because we can look at total debt and also look at interest payments; and we can also look at total debt in both gross and net terms.

Let’s start with total debt. I’ll mostly use net terms because talking in gross terms sounds good, but it’s like talking about how much you spend each month without considering how much you earn.

There is no doubt that if we use nominal terms government net debt is at a record level. The recent budget papers have it at $226.4bn, absolutely miles above the $96bn the Howard government inherited in 1996.

But, really, let’s not be stupid and use nominal terms; we’re a bit smarter than that, surely?

The problem with looking at government expenditure in real terms (i.e. adjusted for inflation) is that it doesn’t make much sense either over the long term.

This is because our economy grows faster than inflation. And a good thing too, otherwise real GDP growth would be zero. It grows faster than inflation because not only do we get more productive, our population grows as well.

In 1985, Australia’s population was about 15.8m; now it is 23.5m. So even without inflation it’s not surprising that a government would spend (and tax) more now than it did then.

But prices do also rise – in the past 20 years inflation has grown 69% while our GDP has increased about 240%.

[debra9275]

this is the last straw for me on the state govt. level

http://www.abc.net.au/news/2014-06-09/victoria-marketed-as-destination-for-trophy-hunters/5509576

[boris1gary]

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@debra9275 wrote:

this is the last straw for me on the state govt. level

http://www.abc.net.au/news/2014-06-09/victoria-marketed-as-destination-for-trophy-hunters/5509576

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The Vic state fiberals seem to be following their NSW counterparts.....

Warrnambool land sold to close friend of Premier

The Warrnambool meat company at the centre of conflict of interest claims involving Premier Denis Napthine will benefit from an additional $600,000 in state government money that will see funding diverted from community projects.

After weeks of controversy over his racing interests, Dr Napthine announced on Friday, May 23, that he would sell his share in racehorse Spin the Bottle, co-owned with Colin McKenna, the head of Midfield Meat, a thriving meat business in the Premier's electorate.

On the following Monday, Warrnambool City Council, in the Premier's electorate, formally backed a deal involving the sale of Crown land to Midfield.

Read more: http://www.theage.com.au/victoria/warrnambool-land-sold-to-close-friend-of-premier-20140608-39ra7.ht...

[debra9275]

Yeah, I did follow that story too Boris, some people said that it was a good thing, giving more employment to Warnambool, but the majority of the workers there are on temporary backpackers visas, 417's I think that is.

[cherry*135]

As I said before, read the rest of his artiicles from May to June 9.

"Gittins May 2014

Yes, the budget will hit demand, but not too badly Gittins May"

Repeat
This budget is unsustainable because the wider implications of its measures haven't been thought through. By knocking back its worst features, the Senate will be doing the Coalition (and the nation) a favour.

R.G. 9 June 2014

[debra9275]

thanks Am I will read them all in a couple of days, I'm on internet slo mo ATM, so trying not to open much today

[cherry*135]

Previously posted link

..."There's worse. You must understand, minister, that returning to a healthy rate of economic growth won't reduce the deficit. Your plan to increase productivity would be great for the economy, minister, but will do little to help the budget balance.

Really? Why? Because higher productivity soon translates into higher real wages. That's great for tax collections, particularly income tax. Trouble is, it also pushes up the spending side of the budget.
Directly or indirectly, almost all spending programs are linked to wages.

Wages are by far the greatest component of operating costs throughout the public sector - federal and state, education, health, even non-government welfare organisations.

"This is the first budget we've had built around that 10-year projection. In concept, this budget is simple: it doesn't reform spending programs or drop many programs. Rather, it shifts some of the cost of programs off onto others, including the states.

One small weakness in the 10-year projection approach (about which the Treasury secretary has warned): it's just a mechanical projection, and assumes we'll go for 33 years without a severe recession."

http://www.rossgittins.com/2014/06/hockey-crafts-our-first-decadal-budget.html

[monman12]

Another C&P from a blogger (is that the Guardian or the independent Guardian?) but it is a step up.  Next perhaps even a real economics journalist,  Gittins and/or Kohler would be a good start.

"Jericho began blogging as Grog's Gamut in July 2008, his first post being on the Tour de France. His blog primarily discusses classic films, sports and Australian politics"
"Jericho is frequently critical of Australia's conservative Coalition parties, and has been described as "partisan", which I guess is why he is "here"

I would suggest some thought be given to the graphs within Jericho's article which show some interesting tendencies over the last decade, also comments like this: "Yes our debt is currently projected to be among the fastest rising over the next six years, but we still end up having one of the smallest debts in the advanced economic world."

We are not exactly a large country, and just because my neighbour has a debt is no reason to justify me having one, albeit smaller, but growing quickly!

"The interest payments on the face value of government securities (i.e. types of bonds) this year is $13.9bn – so about $1.1bn a month. And, yes, the payments are going to go up and up and up –but only in nominal terms. As a percentage of GDP, or of revenue, they are actually projected to be stable – or even fall slightly:"

Oh goody,   we pay $1.1bn a month in interest and it might even fall slightly! (even though actually nominally rising  as a result of the "fastest rising debt over the next 6 years"

10 year bond rate:   "The reason for this is the interest rate the government is paying on its debt is much lower now. In fact it is much lower now than it has been for a very long time:"   True,  but higher than a lot of other countries with higher government debt, why?

Why do we have to pay an interest rate (10 year bonds) of 3.77% and Britain only 2.65%?
Standard and Poor's:
As a general rule, the more creditworthy an issuer or an issue is, the lower the interest rate the issuer would typically have to pay to attract investors. The reverse is also true: an issuer with lower creditworthiness will typically pay a higher interest rate to offset the greater credit risk assumed by investors.

Australia    3.77%
UK               2.65%
Canada      2.33%
USA             2.55%
Germany    1.36%
France        1.82%
Italy              3.32%
NZ                4.33%

Greece 10 yr bonds have fallen from around 11%,  to 6.24% in less than a year.

Next step, Gittins and/or Kohler. ??

nɥºɾ

[cherry*135]

That post of mine, after yours Debra, was mainly in reply to monman's.

Ross Gittins articles are worth reading though if you have time.

[cherry*135]

A budget of suicidal heroism

Alan Kohler

"And the really remarkable thing is that this great big cut in health and welfare spending does not translate into a big reduction in the deficit, and that’s because most of it goes on paying for the Coalition’s election promises."

No government in my memory has so risked its survival to a second term to provide such a deep and lasting rationalisation of health and welfare spending.

......Apart from that....not much. This budget is, overwhelmingly, a welfare tidy-up."


http://www.businessspectator.com.au/article/2014/5/13/politics/budget-suicidal-heroism