If nothing else, the upcoming budget week shows us the priorities of the government. We all know by now that this government is increasingly laying its political fortunes at the feet of a budget surplus and hoping that this will continue to drive down interest rates. It is one way that are attempting to deal with the feeling that the cost of living is continuing to rise.

If only buying happiness was this simple. Picture: Thinkstock

There are rarely any major surprises on budget night: sure, the occasional announcement captures us off guard but after weeks of leaks and warnings about ‘tough decisions’, we all know what to expect. Then the sales job begins and we continue on our merry way.

The problem is, however, that a treasurer will never look us in the eye and tell us unpleasant truths. Sure, we are told that it is time we tighten out belts, but never will one admit to the limitations of both their projections or the very flawed models they are working with.

Here are four items that the treasurer should include in the budget but will, like all his predecessors, ignore.

The first is that the standard economic model is fatally flawed and we need to rethink ‘growth’.  If you ever studied economics, you learn about the way of the world using the economics model of ‘perfect competition’ and ‘economic man’. This model is beautiful in its simplicity: supply equals demand, points of equilibrium, we all know what we want, firms are perfectly competitive and so on.

At the core of the model is the basic economics challenge: how to distribute finite resources in a world of unlimited demands on these. This is where the law of supply and demand plays out. This law, however, has one fatally flawed assumption: that continued growth will ensure that more and more of our demands will be achieved.

The problem is, however, that we cannot grow forever. In a world of seven billion people (and predicted to be almost 10 billion by 2050) not everyone can have a three bedroom house on a quarter acre block, a four-wheel drive, plasma television, a games console and so on.

There are simply not enough resources in this world. In fact, estimates show that if everyone lived like we in Australia do, you would need 3.8 Earths to support the current population.

The solution here is to rethink what we mean by ‘growth’. That is, we need a growth measure that includes the world’s natural assets, our education and many other social indicators, not only GDP.

This is not arguing for zero growth, but rather one that reflects the reality of what is possible and measures things that count beyond economic outputs.

The second point the treasurer should make is that increasing income is not the answer to our social problems. Studies consistently show that beyond a certain point, income adds nothing to human well being and satisfaction.

Yes, we all need to eat, have somewhere comfortable to sleep, feel safe and have various luxury items, but beyond this, any increase in income adds little to our level of satisfaction or fulfillment.

The answer is for the budget to be as much about social economics as about finance. Some of the greatest social challenges facing Australia at the moment include social isolation, mental health, and entrenched working poor. While there may well be an announcement here or there about dealing with some of these issues, these are seen as side issues rather than being endemic within our current economic system.

The third point is that societies inequity and disparity results in social problems that have tremendous economic consequences. As Richard Wilkinson and Kate Pickett showed in their important book, ‘The Spirit Level’ societies with smaller gaps between the wealthiest and the poorest do much better in all sorts of areas: lower levels of crime, drug use, suicide and depression.

In societies such as ours where we are seeing increasing levels of inequality, all these issues are intensifying.

The way to address such levels of inequality brings us to our taxation system. Taxes, when appropriately designed and targeted, implemented and transparent, allow a society the opportunity to build the appropriate social and economic infrastructure to thrive.

There are many taxes and subsidies in our society which do not meet these requirements and should be scrapped, and there are others that need to be designed and implemented with the aim of targeting growing disparities and wealth.

A capitalist system relies on hierarchies to both reward those that work hard and provide incentives for that hard work. There is nothing wrong with this except when it turns ruthless and brutish: two words that can describe the way the current system works. It must be addressed.

The fourth element is for the treasurer to ensure that the economy, and the many units that make it up including corporations, are there to serve the needs of society, not the other way round. Our current system rewards short term economic gains: from the CEO and board of directors whose fiduciary responsibility it is to maximize returns to shareholders, to the stripping of natural resources. There is little in the way our economic system which demands that the needs of society take priority over the economy.

In theory, we can all afford to be neoliberal economists demanding economic growth regardless of the social and environmental consequences, but centuries of experience show us that unfettered capitalism leads to destruction.

The treasurer should address these issues. Unfortunately, no treasurer will until the social and economic consequences become much too big to ignore - and this may be closer than we think.

Most commented

69 comments

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    • Sony B Goode says:

      05:46am | 07/05/12

      Another ill-conceived marxist rant to push the notion that freedom is bad and it is so much better to let government run your life for you.

    • Tell It Like It Is says:

      08:32am | 07/05/12

      Could not agree more and neither I myself or anyone I know or know of or hear from, nor anywhere I look has given me the impression that Australia is doing as well as Swan and co keep telling us. Walk down any street in any suburb; walk into any shop in a shopping centre. People do not believe him and are not spending IF they have any money to spend. All that BS about the world’s greatest treasurer!  And yes, all these oh so paternalistic theories about controlling supply and demand and distributing it by the all-knowing government. Scarey stuff.

      The fact is no one will gain any “consumer confidence” until we all know that we have “government confidence”!

    • Luke says:

      09:27am | 07/05/12

      @Tell it.

      The old anecdotal fallacy at play. “I don’t care what the actual figures say, I know better because my mate is struggling to pay off the McMansion.”

    • RyaN says:

      10:29am | 07/05/12

      @Luke: Try opening your eyes and taking a look around, how many shops do you see closing? How many restaurants are full on weekdays like they used to be?

    • Rose says:

      11:12am | 07/05/12

      I work in retail pharmacy and sales figures and gross profit are consistently growing, by considerable amounts. My bosses continue to push the times are tough, must cut wages and work harder line, but really, that is their pure greed. They are about to lose key members of staff who aren’t prepared to be pushed any further when they are already achieving above expectations and see no reward, just more pain and lies.
      If they allowed the shop to retain staffing levels and if they paid appropriate wages for those demonstrating their worth to the business (being fair, that is not everyone, but there are about 3 staff who keep the place afloat who are paid no more than those who don’t put in any real effort), they would continue to reap considerable profit, they would retain key staff and staff would develop a loyalty to the business (like we had under previous owners) and they would give the less productive staff a reason to believe there is benefit to putting in extra effort.
      Australia is doing fine, it’s just that some people are peddling fear and negativity for personal gain.

    • Tim says:

      11:48am | 07/05/12

      Ryan,
      LOL.
      So your casual observations are a substitute for actual facts and figures hey?
      I went to a restaurant that was packed on the weekend, the economy must be booming.

    • DOB says:

      01:27pm | 07/05/12

      Actually Sony B Goode he was saying that freedom is good - only he doesnt think most people have much freedom at the moment. Another ill-conceived rant from you showing that you have difficulty reading the most basic of opinions without simply seeing whatever it is you want to see. Why do you even bother reading this stuff? Did you actually read this stuff? Doubtful.  My guess is youre employed by a conservative group of some sort. Or youre a nut. Your track record of comments strongly suggests both.

    • RyaN says:

      02:52pm | 07/05/12

      @Tim: Just checking my post, nope nowhere did I state that my “casual observations are a substitute for actual facts”.
      I asked you to observe what is happening around you.

    • Tim says:

      03:09pm | 07/05/12

      RyaN,
      Your response was to Luke’s comment with regards to using anecdotal evidence. You suggested looking around at shops closing or restaurants not being full. How is that possibly not suggesting that casual observations are a substitute for real evidence?

      With regards to seeing what’s happening around me I responded to that too:
      “I went to a restaurant that was packed on the weekend, the economy must be booming. ”

    • Sony B Goode says:

      05:00pm | 07/05/12

      @DOB, the more inequality the better. I can recommend North Korea as a workers paradise of mass equality. Somehow I don’t think you will be taking up that option….

    • Carol says:

      05:49pm | 07/05/12

      Tell it as it is,
      Please tell us on what you base your comments?
      Our interest rates are low, the national debt is low, unemployment, based on the last ten years is low, so what is your problem?

      Costs have gone up, but was is new, in my lifetime I’ve never known costs to go down.
      Most of us have things our parents only dreamed of, we even get paid to have baby’s!

      The product of a world order and a level paying field, means one of two things, we either reduce our wage/salaries or we increase those of the world to match ours. Scary isn’t it?

      Less and less employed, supporting more and more unemployed, wellcome to our brave New World.

    • RyaN says:

      06:16pm | 07/05/12

      @Tim: Fair enough, I can cop that!

    • Against the Man says:

      06:39am | 07/05/12

      Well written piece. Will the ALPers address the Swan problem or start blaming the Coalition?

    • Little Joe says:

      08:44am | 07/05/12

      I think he puts the cart before the horse in the fourth element!!!

      Citizens must elect a Government whose treasurer will ensure that the economy is there to serve the needs of society, and unfortunately most citizens are too ignorant to look past their own needs as opposed to the needs of society. Which is why there was a $900 handout a few years back and why the Government is “bribing” the electorate with $2,000M for children going to school ..... most of which will not be spent on children’s education ..... after cutting $2,000M from Defence.

      Pensioners will vote for the Political Party who will give them the most as will the unemployable. Union Workers will vote for the Political Party who will give them the most and look past the fact that their employer is not investing in capital and must plan to downsize their manufacturing component.

      This is the problem!!!

    • Ziggy says:

      07:16am | 07/05/12

      Understand the frustration of inequality but what is lacking in this article is any reference to the individual taking responsibility for their own situation and taking action to better themself.
      It is the old argument that governement knows best and will take care of you from cradle to grave. This simply does not happen. In fact cannot happen.
      Every Marxist government has been just as corrupt as the free market ones. Same with all socialist governments.
      Self interest is a powerful motivator - the problem is to harness that motivation for the good of all. Darwin would have understood that perfectly.

    • Rocksteady says:

      07:26am | 07/05/12

      The huge cut in government spending is coming at the worst time possible and is being done for political and not economic reasons. It will devastate the economy in order for Labor to save face.

      Foreign investors are willing to buy Aust Government bonds at ridiculously cheap interest rates. Current 10yr bond rate is around 3%, Joe Hockey has rightly suggested we offer 30yr bonds in order to take advantage of this goldmine of cheap foreign capital.
      The rate at which the Australian government can borrow is the lowest its been in 50 years. We should be borrowing and spending on infrastructure while the nation can get these incredibly cheap rates, targeted spending on infrastructure is necessary if we want to step up and compete with the Asian powerhouses.

    • Frederick says:

      09:45am | 07/05/12

      That is exactly how the GFC started in the first place
      People borrowing money for investment because interest rates were low due to the high savings rate in the Asian powerhouses. Relying on borrowing too much just means that speculative investment goes crazy and as soon as something goes wrong, the economy is hit hard

    • TheBigZ says:

      09:57am | 08/05/12

      @ Frederick, Actually the GFC started because the greedy grubs controlling banking in the USA deregulated the mortgage industry to allow them to take advantage of those who could not possibly afford to pay the loans back and when the government approved ponzi scheme collapsed the GFC was the result. If responsible lending takes place, For example if Australia as an AAA credit rated country wanted to borrow, as long as the repayment structure and amounts were sustainable there would be no problems.

    • Dino says:

      07:34am | 07/05/12

      The problem with LAbor is that they don’t plan for the future, they hope some other government will solve their problems and mistakes. We have to plan for the future. We have to have a government and system that looks at growth and the protection of Australian interest.

    • Dan says:

      09:20am | 07/05/12

      How about 10 years of the Liberals who never invested any of the mining boom into infrastructure…was this considered planning for the future? I think you will find that planning in 3 years blocks is a problem for both sides of government…credit to Labor for the NBN though..and credit to the Liberals for the future fund…2 initiatives that will last longer than 3 years.

    • Lets be realistic, here says:

      09:25am | 07/05/12

      The problem with Australian governments is that they don’t plan for the future, they hope some other government will solve their problems and mistakes. We have to plan for the future. We have to have a government and system that looks at growth and the protection of Australian interest.

    • Samantha says:

      11:03am | 07/05/12

      Dan, the Libs have done more for this country than the dysfunctional ALP ever will. With news that the 4G network is faster than the NBN, we see another expensive ALP f#$k up! The ALP is finished.

    • Knemon says:

      11:19am | 07/05/12

      @ Samantha - “news that the 4G network is faster than the NBN”

      Did you make that up Samantha or are you just confused?

      The truth is wireless will never compete with optic fibre for speed or reliability.

    • frustrated in the country says:

      11:38am | 07/05/12

      I live in a rural area and the NBN was promoted as an educational/telehealth tool. Great. Except there is no educational/telehealth services ongoing and nothing planned for the future because it costs lots of money. I’ve also been told my patients won’t get much in terms of health care infrastructure of staffing because the government has no money. Isn’t technology great - spend billions on a white elephant, sit back and talk about what you can potentially do but in reality nothing is done for the people who need it. Labor is and always be a useless piece of dog sh@t!

    • Mattb says:

      11:38am | 07/05/12

      Knemon

      No, Samantha is just quoting an article on yahoo (‘told you so’ has linked to it further down) stating that 4G is faster than the NBN.

      Unfortunately for Samantha she failed to read the fine print. Actually she probably only read the title. If you read it, it states that you’ll get speeds about half as fast as the NBN (sometimes, not often, but sometimes), as long as your standing directly under a tower in the middle of the city of perth on a fine sunny day and no one else is trying to use the service at the same time you are!

      Oh, and Knemon, dont tell samantha (we wouldnt want her to look too foolish) but the 4G network will require the installation of the NBN to provide it with a reliable backbone…

    • DOB says:

      01:23pm | 07/05/12

      Amusing Dino here’s how it should go with the business cycle - and this is accepted economic orthodoxy by the way: when the economy is booming the government should reduce spending and increase taxes. This allows the government to save money into surpluses and slow down inflation. When the economy goes into its next slump (which it inevitably will) the government then spends the money it saved in the good times to keep people working and make sure no-one goes down the toilet. Got that? Not hurting your brain too much yet?

      Now, which government was in power during the last boom? The last “once in a century boom” to be precise. Well, the Howard liberal government. What did it do? Well, hand out tax cuts, babay bonuses, spending , you name it. Did it do anything a responsible government does in those circumstances? No. It bought votes. It bought votes from silly people. Mostly it bought votes from fools like you, Dino (and Sony B Goode, but he’s a hopeless ignoramus). It had surpluses. yes. But it had surpluses nowhere near where they should have been and it blew out spending and taxes badly - all while failing to spend on any useful infrastucture. And the mediocre fools that did that are all on the liberal front bench now.

      If youre feeling the pinch now you know where to really look. Dont look at the people cleaning the shit up - look at the people who left their shit all over the place.  The thinking of most people who post on here is as shallow as a goldfish’s so I wont hold my breath for you lot to understand any of this.

      So, lets

    • Parent of 3 says:

      02:29pm | 07/05/12

      Gillard has FAILED. No amount of talking or policies or handouts will save her. The game is so over for her and the ALP she has destroyed for her own selfish reasons!!!!!

    • RyaN says:

      02:58pm | 07/05/12

      @Mattb: Wasn’t a fibre backbone the LNP plan? You know rather than the part that is the expense problem with the NBN, fiber to the node.

    • Arthur says:

      07:39am | 07/05/12

      Great article.

      The social consequences are here but the political pressure is a long long way off because 90% of the population aren’t smart enough to understand what you’re talking about.

      The growth model is a crock that makes greedy people very rich at the expense
      of others.

      How any intelligent person can see infinite growth as sensible is beyond me. Globalisation has destroyed Australia’s future.

    • Sony B Goode says:

      07:52am | 07/05/12

      yes so much better to have the squandocrats run your life for you isn’t it, avoids annoying decisions, choices and responsibility!

      Feeling lazy? Tired of earning your keep?  SOCIALISM may be right for you!

    • Rocksteady says:

      08:21am | 07/05/12

      Growth itself isn’t bad, it’s the emphasis on GDP growth which is harmful.

      We could have a huge increase in GDP by letting 20 million people into the country overnight. So while our economy would be “booming”, people’s quality of life, wages, access to essential services would be in a sharp decline.

      Economic growth should be based on technological advancement and more efficient use of resources.
        Using population growth to build up an economy is flawed and will inevitably reach its limits. Its governments taking the easy way out and kicking the can down the road for future generations to deal with.

    • Arthur says:

      09:13am | 07/05/12

      @Rocksteady

      The problem with the way our successive incompetent governments are handling it is in the end we’ll have 50 million people all sharing the crumbs that are left. We are living way, way, way beyond our means by selling assets, living on debt and propping it all up with population increases.

      Where is ANY broad and public sensible debate on where it’s all taking us?

      Most green minded people think if we save our plastic bags everything will be okay. The others are deluded thinking we should do our bit by letting more people in to the once lucky country. They ignore there are 90 million EXTRA people on the planet EVERY year.

      This is all about getting the idiot socialists to open their minds and realise how deluded they and their teachers are.

    • Arthur says:

      09:25am | 07/05/12

      @Sony B Goode

      Exactly. Most people are too lazy, disinterested and dumb to invest energy in to where these grubby politicians are taking us.

      I got wound up discussing some political thing on the tele the other day. My mates wife said….... “wow look at the aqua blue jumper the blond reporter’s wearing”.............. “Aqua blue looks so good on blonds”.


      There’s no question why we’re heading where we are.

      It will all change soon when there’s more to busy ourselves with than aqua jumpers on reporters.

      The privileged life we’ve gotten so used (and have been tricked in to thinking is perpetual) to over the past 50 odd years will be coming to a drastic halt very soon.

      It’s not hard to predict stuff. Just use your brain and it all makes sense. I’ve predicted so much that amazes most people I know.

      The formula? Don’t believe the vested interest of people, think outside the square, use your brain and it’s really easy to see the western world has sold itself to emerging countries. Where is the wealth coming from in Asia? A transfer of wealth from the west. How dumb can we get?

    • Fred says:

      09:29am | 07/05/12

      Neo Liberals ( Liberal party voters) won’t be happy until the western world is an overpopulated hell hole. They dream of sitting on their arse whilst getting paid stratospheric sums for doing nothing, whilst having countless amounts of cheap labour, and if you don’t like it, you’re a “socialist”. Lol.

      Race to the bottom! Quick!

      But yes the Henry Review is the way to go. There’s just too many with vested interests in the rentier capitalism we have now.

    • Arthur says:

      09:50am | 07/05/12

      What should be in the budget.

      1. There will be zero population increase.

      2. There is no free money. Anything the government gives out; there will need to be a return.

      3. There will be no more foreign investment in Australia at all, business, housing, farms.

      4. Superannuation will be lifted to 25% (25% employee contributions plus 12% employer).

      5. Default super in to Australian companies.

    • Mattb says:

      10:08am | 07/05/12

      Sony b Goode

      “Feeling lazy? Tired of earning your keep?  SOCIALISM may be right for you!”

      Who are you going to vote for in the next election then?. We’ve currently got two socialist party’s to choose from. Labor or liberal.

    • Knemon says:

      11:42am | 07/05/12

      @ Arthur - “There will be no more foreign investment in Australia”

      With all due respect Arthur, I don’t believe that you have thought this through too well. We can trade with the rest of the world or we can close our doors, the latter wouldn’t be a good option.

      Your super figures are a tad messy also.

    • Arthur says:

      12:53pm | 07/05/12

      @Knemon

      I’ve thought it through lots.

      Close our doors would be the smartest thing we could do.

      What’s wrong with the super figures?

    • Arthur says:

      01:13pm | 07/05/12

      Actually Knemon.

      I’ll alter that.

      Trade on our terms. Sell stuff we don’t need, don’t buy stuff we don’t need. Make everything we can.

      Get smart. the way we’re doing things can only lead to tears.

    • Knemon says:

      01:31pm | 07/05/12

      @ Arthur - Closing off all ties with foreign investors and trading partners would not be good for our country. I’m pretty sure the likes of Clive Palmer Et Al would agree with me. Foreign investment is a two way street.

      Re super…25+12=37.
      Cheers

    • Arthur says:

      02:24pm | 07/05/12

      Knemon. I’m 100% certain as you say Clive Palmer would agree with you.

      What about the tens of thousands unemployed would they agree with you?

      What about the tens of thousands that can’t buy a house, would they agree with you?

      Two way street implies there’s something in it for us. All I’m seeing is an erosion of our lifestyles and a very dark future for our kids and their kids. I think there’s a cut off where the benefits diminish. I’m sure that’s far less than the 85% of mining that’s foreign owned.

      Re super…25+12=37…That’s exactly what I meant. .Wouldn’t it make sense to have people fund their own retirement?

      Isn’t the ridiculous over populating immigration to satisfy future aging of the population? No?

      It’s about feeding the behemoth big business that runs Australia.

      I ask you Knemon…................. Globalisation, what’s in it for Australia?

    • Tubesteak says:

      07:51am | 07/05/12

      I did study economics both at undergrad and postgrad and your view of the model is incredibly simplistic. Not much beyond first year economics. In later years you know that the underpinnings of perfect competition and the rational consumer are broken down. Economic modelling is far more complex than what you think.

      Continued growth does not assume that more demands will be met. Just that contraction will not cause the huge problem of recession or stagnation (even stagflation).

      We cannot grow in our current form. But one thing economics teaches us is that we change. New technologies enable us to use our resources differently and more efficiently. The drive for this change comes about as the price of the good/service increases due to it becoming more scarce.

      The scond furphy that you fall into is the income one. Studies also show that you are most happiness when you are the richest of your peer group (assuming you have what is necessary to sustain your primary needs). $75k in Sydney won’t get you anywhere. It’s up to the individual to choose a rational point of income that gives them the life they want. It’s up to government to remove impediments to this by ensuring education meets demand and health sots are kept low as well as infrastructure lets us get around quickly and efficiently.

      More studies will show you that taxign the rich just to give to the poor creates a useless waste on society. We should all pay an equal flat tax abnove a certain tax free threshold. It’s up to the individual to work hard and put more effort in. Seeing yesterday’s Punch article about tradies now shows that just about anyone can work their way to a $150-$200k a year job whether you’re a tradie, banker or lawyer. This is a good income that will enable you to live very comfortably. Forget the billionaires at the top. We can all do something with our live to not worry about social mobility. Anything to the contrary is nothing more than weak victim-thinking.

    • Little Joe says:

      08:31am | 07/05/12

      Spot on Tubespeak,

      Our family was very happy when my take home pay increased by $40/wk .... but then the reality of the Carbon Tax hits ...... increased costs to water, electricity, rates, food will dissolve this quickly.

      Then there is the threat that my workplace is not investing in manufacturing capital and looking at increasing its direct purchasing of overseas products.

      So will I be happier in 8-wks time ..... I doubt that very much.

    • Arthur says:

      09:44am | 07/05/12

      Ive made so much money Tubesteak; by first using and running with the flawed models and then betting against them. The models are broken. How will technology continue to allow us to live like this with more and more people? It won’t.

      We’re so arrogant thinking technology will fix everything. What if we’re wrong?

      What if we’ve made emerging countries so strong with what we used to own that they run their economies with better technology than we do?

      The west is so superior in our own deluded minds.

    • Tubesteak says:

      11:45am | 07/05/12

      Athur
      You have no idea what you’re talking about. I can bet you were using the wrong models. New technological developments have always allowed us to overcome certain barriers and restrictions because they enable us to do things in a different way.

      The balance of power always changes in nations. Emerging economies are welcome to it. For us it’s all about finding our niche and this isn’t with manufacturing. That’s old world thinking.

    • Arthur says:

      01:10pm | 07/05/12

      I can show you specifics Tubesteak such as graphs, personal debt, China GDP, fake stats the gov uses to prop up a failing Australian economy, unemployment, environmental degradation, social decay, lower standards of living, wage erosion.

      What can you give Tubesteak other than wishy wasy vague statements like “That’s old world thinking.”

      It means nothing…...What’s new world thinking and specifically how do you propose we’ll do it better than the “emerging” (more like left us in their dust) economies?

    • Tubesteak says:

      01:34pm | 07/05/12

      Arthur
      Your responses above prove you’re another crazy crackpot with no clue.

      What qualifications do you have to show that you know what you’re talking about. I can show graphs and stats, too.

      I bet you’re “John” using another name. The old adage about arguing with idiots come to mind…..

    • Arthur says:

      01:46pm | 07/05/12

      I don’t think you’re a nice person Tubesteak.

      1. Can you answer my questions.

      2. I’ve got a degree in science and I’m embarrassingly rich.

    • Arthur says:

      02:00pm | 07/05/12

      “What qualifications do you have to show that you know what you’re talking about.”

      I think it might be the guys that “know” what they’re talking about with the “qualifications” are the ones that got us in the mess you deny exists Tubesteak.

    • Retired Network Engineer says:

      09:52am | 07/05/12

      You did not have to be a genius to ask why Telstra was happy to “sell” it’s wired network.

      It already knew that 4g was coming, I remember the blurb from about 3 years ago predicting 100 mbs over wireless sometime in the next 5 years.

      Part of the reason we went digital TV was to release the analog frequencies to be used for wireless applications.

      Telstra shareholders in the know must roll around the floor laughing every time the Govt mentions the NBN.

      NBN to take 10-15 years to complete,  I rest my case.

      Current advert on TV showing the NBN as a satellite network, yuk yuk yuk, great joke - how long have we had satellite internet ?

    • Inky says:

      10:19am | 07/05/12

      I’m sorry, what?

      It’s bragging about speeds getitng up to roughly 30MB/s? That’s it?

      Also not mentioned: the cost of these wireless plans.

      Do people not pay attention to current wireless plans at all? Where you pay 3 times the cost of a wired plan for half the useage? Do people really believe that this will somehow magically change due to this new “4G” Telstra wireless network?

      I’ll stick to a reliable fixed service, that doesn’t break down in bad weather conditions or degrade when too many people are online, where I don’t have to worry about whether or not i’m in a bad signal area and I don’t pay through the nose for any decent sized download allowance. Do Telstra offer more than 12GB a month on wireless yet?

    • Markus says:

      10:46am | 07/05/12

      All those wireless broadcast towers still have to be connected a wire system.
      This is not an issue of one or the other. A nationwide fibre-optic network will ensure that future wireless development is built on the back of the fastest system currently available, as opposed to a 100 year old copper network.

      Even better is that the NBN will ensure it is not just Telstra who has access to high speed wireless networks, and we are not subjected to the ridiculous pricing structures witnessed at current speeds.

    • The Truth says:

      11:09am | 07/05/12

      Yet Swan/Gillturd refuse to tell us the taxpayer how much it will cost to naintain this dinosaur system.

    • Inky says:

      12:39pm | 07/05/12

      @ the “Truth”

      I’ll ignore the ignorant remark about fibre optics being a “dinosaur system”.

      As far as maintenance, IN THEORY it won’t cost the taxpayer a thing; the NBN is a company whose stakeholders are the government and are supposed to be able to operate like a company. This means they should be able to manage their maintenance costs from the money they collect from the retail telco providers using their network.

      Whether that ends up being the case is impossible to tell at this stage. But given the tense political environment around the NBN, I doubt those running it are counting on government support.

    • andye says:

      01:08pm | 07/05/12

      @The Truth - Firstly, the fibre will be useful long after 4g has come and gone.

      Secondly, you clearly don’t know how the NBN is funded. What kind of fool complains about something that they know nothing about?

    • andye says:

      01:30pm | 07/05/12

      @told yo so - The problem with wireless is it doesnt scale. 3g is barely working in the cities and it only carries about 7% of the data. You can fudge about growth in wireless devices all you want, but the system cannot handle the data it would need to in order to replace wired. You can’t just build more towers, and you can’t magically come up with a solution to the problem of limited spectrum.

      They can run a test on a new system with hardly any users and get decent speeds, sure. they don’t compare to anything but the most crippled NBN speeds, though. And the NBN will be running fibre at less than 10% of its theoretical capacity when it starts.

      With the NBN (apart from a couple of specific bottlenecks) your fibre pipe is your fibre pipe and you get that full bandwidth. As you add users to a mobile tower, the bandwidth gets sliced up into smaller and smaller bits. This is why 3g is crap in the cities. Not to mention that latency, reliability and so on are terrible. Various things that work OK now on ADSL would in fact work WORSE on a 4g connection, even if it has a higher overall speed.

      The wireless argument against the NBN is a flat out lie. I would welcome some kind of realistic debate about this, but mostly what I seem to hear is just people repeating the same stupid lies that are being fed to them.

      @Retired Network Engineer - Maybe you should stay retired? I have serious doubts about your claimed knowledge based on your post.

    • The Badger says:

      03:35pm | 07/05/12

      Read the article “told you so.”
      First the headline
      “Wireless 4G leaves NBN in its wake”
      This is a very disingenuous headline. Wireless will never leave fibre in its wake. Physics tells us so.
      To put a headline like this on the article just encourages luddites like you to “believe” that mobile broadband is a suitable replacement for fixed line NBN broadband, it’s not. The two are complementary.

      Next the this gem:
      “A new wave of 4G wireless broadband networks will eclipse the speed of some fibre plans before the National Broadband Network even rolls through Perth streets.”
      This is like saying a new VW will eclipse the top speed of some high performance sports cars (the ones that are stuck in first gear). Fibre (The NBN) is capable of delivering 1 gigabyte per second to the home. That’s 100 times as fast as the maximum speed of 10Mbps Telstra has quoted in marketing material.

      Then this one:
      “Testing of Telstra’s 4G long-term evolution network in Perth, which is limited to areas close to the CBD, clocked average download speeds exceeding most ADSL2+ connections - and treble the speed of the cheapest NBN plan in one location.”
      WOW, all this with one user connected to the network. Wait until tens of thousands of users want to use the network and see how those response times go. More importantly, cost per Gbyte should have been compared.  Users can buy speed (3g or 4G) dialup vs ADSL vs Fibre. A quick look tells me that you can get the Telstra plan BigPond Liberty® 15GB which would give you 15GB on a 24 month contract for 79.95.
      A comparably priced plan from IInet for an NBN broadband connection that costs $99.95 would give you 500GB peak and 500GB off-peak at a speed above that quoted in the Telstra marketing material.

      In summary, the story compares apples and oranges and not very well.
      Congestion will make a big difference, as will climatic conditions and all the other variables that cause dropouts and loss of service for mobile devices today.
      The speed is impressive albeit under these lab like conditions (one user) and appropriate for mobile applications.  What the reader needs to understand is that faster downloads and the increasing prevalence of large data files means you will be burning through Gigabytes. Cost per Gigabyte is a real issue around wireless broadband.  If you spend $99.00 for 15 GB of wireless broadband with Telstra, after 15 GB, you are throttled back to 64kB which would effectively be around 12kB. This 15GB plan is the largest data plan available from Telstra for Wireless broadband.
      Personally, I think the testing that was done is useful. I think that they should save the data collected and in a few years, when 4G has been taken up and there is a user base of sufficient size, they should re-run the route they took in good weather and bad weather and come back and tell us the reality of 4G in the real world.

    • Sony B Goode says:

      09:18am | 07/05/12

      Academics Richard Wilkinson’s and Kate Pickett’s study is fraudulent and has been debunked; they cherry picked the data to push their big tax, big government neo-marxist agenda.

    • Super D says:

      09:29am | 07/05/12

      I don’t think the answer to any problems, economic or otherwise, is channeling Malthus or the Club of Rome which is all you are really doing here.

    • Tony of Poorakistan says:

      09:57am | 07/05/12

      “Our current system rewards short term economic gains: from the CEO and board of directors whose fiduciary responsibility it is to maximize returns to shareholders” 
       
      Got it in one. Until we fix this model, we are fucked.

    • AdamC says:

      10:37am | 07/05/12

      Um, no. The capitalist, free market system, as refined by the development of incorporation and regulated capital markets, is the only social and economic system that has created mass wealth and general prosperity. Other systems, usually created based around some kind of forced labour, have successfully created economic activity and growth, but this has never translated into high living standards for ordinary people.

      In some sense, capitalism has been too successful. For one thing, it enables people like the author to bitch and complain about things like ‘rising inequality’ (which, on the totality of the evidence over the long term, is a problem that does not even really exist). Indeed, the livelihood of the author is entirely dependent on the existence of the ‘ruthless’ and ‘brutish’ capitalism that the author decries.

      It amazes me that people can seriously consider scrapping the western world’s greatest invention.

    • Labor Unbeliever says:

      09:58am | 07/05/12

      Really do not believe we will see a real surplus at the end of the financial year, Swann will spruik a surplus but a huge deficit will ensue, preceded by an early election so they will not have to bear the political cost at the ballot box.

    • Max Redlands says:

      10:12am | 07/05/12

      If you’re not growing your dying.

      Stasis is the first (non) step to becoming moribund.

    • Let Them Eat Cake! says:

      11:26am | 07/05/12

      I cannot understand all the negativity about our living standards.

      Our Prime Spin-ster, Juliar Blowhard and her awesomely innumerate Deputy, “The Goose”, state that they have created over 300,000 new jobs since they have been trough-snouting their Government salaries.

      All any unemployed Australian needs to do to get one of those jobs, is to move to China and apply for one.  How hard can that be?

    • Yrusofith says:

      12:59pm | 07/05/12

      Jobs Labor has “created” will not be enough to employ the school leavers.

      Labor “creating” jobs ?

      I thought business created jobs in a good fiscal climate.
      (which Labor could not provide even if they tried)

      We also have a huge group of people under-employed, who want more hours to work but because of the current regs it makes it hard for business to justify full employment jobs.

      We need change, bring on the election !

    • Farken says:

      12:32pm | 07/05/12

      “The Budget speech Wayne Swan could never deliver”  well what is that speech i cant see it in what you wrote all i see is you pointing out things that most everybody knows

    • Sanjay says:

      01:51pm | 02/06/12

      on the box, b) that device has crteaed a gigantic web of opposing interests that is almost impossible to untangle, and c) the Rudd government’s hope that it could just buy its way out of that mess was wrong.So the government needs to focus not on building a broadband network, but on regulatory reform which allows private firms to do so.  I maintain that reform should be in the direction of allowing market forces to determine the shape of new networks and products. If you have a way to do this without reinstituting some degree of private control over existent and future networks, then I’m all ears.But I guess that argument doesn’t have your catchy narrative of dastardly companies gouging customers and destroying their competitors.

 

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