With lots of talk about Kevin Rudd wanting to have an election before the next budget what are the options?
Most attention is given to a double dissolution – that is an election for both the House of Representatives & all Senators allowed because a piece of legislation has failed to pass both houses of Parliament twice with a gap of three months between rejections.
But he could choose to have a House of Representatives election only and leave the Senate until later. This he can do anytime before the May budget provided he can convince the Governor-General.
The last time we had a House only election was when Gough Whitlam won in 1972. We had an October 1970 House only – won by John Gorton, followed by a Half-Senate only in November 1970.
Thereafter it was double dissolutions all the way to 1987. Since then we have had & considered House and Half-Senate to be the norm.
It’s all up to Kevin - if he wants to avoid having an election before bringing down a budget which will have to deal with his newly created debt and deficit, he can. He doesn’t have to have a double dissolution he just has to convince the Governor-General to agree to a House of Reps only.
A real PM wouldn’t be looking for an excuse to duck a hard budget. He (or she) would face up to what must be done in the next budget and then go to the people and that he can do as late as 16th April 2011.
So here are the options.
Have a House of Representatives only election any time soon, or
Hope for a trigger for a double dissolution. He can have one of these as late as 16th October 2010, or
Have a normal House of Representatives & Half-Senate election at the due time of November 2010, or
stretch it out to 16th April 2011.
Over to you Kev.
You don’t have to depend on anything the Opposition does to dodge the Budget the choice is simply yours. Tell us which it is. Face up to a tough budget or cop out with a pre-budget election.
But what about the debt? Who are our creditors?
The voter is entitled to know how the Rudd Government intends to deal with the debts and deficits it’s already racked up in its Budget due next May. And we’re entitled to know before we vote!
After all, it was only 9800 people who changed the Government from Howard to Rudd and when the government changed hands Mr Rudd inherited a nation with no debt, a budget surplus of $20 billion, an education fund of $5 billion and a Futures Fund of over $60 billion.
Compare this with the present situation.
The surplus turned around to a $57 billion deficit.
$101 billion of debt already incurred which will cost us $5.2 billion a year in interest payments and this interest bill will grow along with debt which will peak in 2013/14 at $315 billion.
Therefore we come to the important question of just who is buying our bonds – that is, who are our creditors? Is China our major creditor? Highly likely, but how will we know?
In legislation passed by the Parliament concerning Commonwealth borrowings the Opposition moved an amendment, accepted by the Government, requiring the Government to establish and keep up to date a Public Register of Government Borrowings recording the beneficial ownership by country.
It requires the register to be placed on the website of the Australian Office of Financial Management.
Sounds simple? But to date, no register. Problem?
Well, the way the bond market works is at a primary and secondary level with bonds initially sold to bond traders who become the legal owners but who then on sell to custodians. They in turn deal with other entities who become the beneficial owners. But there is no limit to the layers between initial sale and beneficial owner.
However, currently it does seem about half the Commonwealth Bonds are held by one Australian custodian so asking questions of the custodian should give some information to start being put on the public record to comply with the legislation.
Incidentally, trading on the Bond market is a nice little earner for custodians. If a margin of just 0.1% is charged for every $1 billion of bonds traded the custodian makes $1 million. And you can bet a merchant bank type custodian could well have a margin of 0.2% or 0.3%.
As I said, nice little earner.
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