Economy

The Reserve Bank has decided the economy is ticking along for the moment, and airline passengers lists confirm that many Australians have had a bit of cash to spare. On the day the central bank left official interest rates untouched, the Bureau of Statistics revealed millions of Australians have been in a position to take advantage of the dollar’s golden powers abroad.

Last year, short-term departures by Australians reached a new record of 7.8 million overseas visits, up from 7.1 million in 2010. Back in 2001 there were just 3.4 million visits.

Some 57 per cent of those who left the country for a short time last year did so for a vacation and a further 22 per cent said it was to catch up with relatives. That amounts to a lot of people with the dough to put to travel, a relative luxury.

Continue reading "The sun is shining but storms lie ahead for the surplus" »

Stop all the cheering, cut off the champagne. Prevent the pollies from barking and silence the drums. The piddling interest rate cut didn’t even happen.

Today’s widely expected drop of 25 basis points was the catalyst for plenty of chest beating. Treasurer Wayne Swan tried to unleash righteous fury, the banks tried to cry poor, the unions said the banks are squeezing ordinary Australians, and not in a good way. Nothing happened. The Reserve Bank of Australia decided to keep the cash rate steady.

But was all the hullabaloo justified in the first place?

Continue reading "Interest rate barney barely even rates as interesting" »

In 2008, one of the biggest financial disasters in history took place. When investment bank Lehman Brothers collapsed, the global financial crisis announced its unwanted presence to the world. Four years later, the European debt crisis has again left the global financial system teetering on the edge of the abyss.

Make no mistake. This is the Cuban Missile Crisis of economics. Christine Lagarde, managing director of the IMF, has warned of a 1930s style Great Depression. Former prime minister Paul Keating has called it the “worst crisis of his lifetime.” Legendary speculator George Soros, in a chilling interview with Newsweek, had this to say:

“We are facing now a general retrenchment in the developed world, which threatens to put us in a decade of more stagnation, or worse. The best-case scenario is a deflationary environment. The worst-case scenario is a collapse of the financial system.”

Continue reading "What happens to us if we collide with GFC 2.0?" »

The announcement by Toyota of several hundred job losses this week is certainly alarming and it will have had and will continue to have ramifications for the broader industry.

But it will only mark the end of the industry if we as a society say we don’t want manufacturing and we are happy to simply be China’s quarry and maybe a second tier tourist destination.

In all the hyperbole and wild statements we hear about our mining industry, we rarely hear some of the uncomfortable truths. That it’s only 9 per cent of the economy, that it is the cause of the high Australian dollar which is putting pressure on our manufacturers and farmers, and that, at its best, it really only represents the highest aspirations of the average third world dictator.

Continue reading "A bloody good reason to subsidise car making" »

That fateful ``no carbon tax’’ statement by Julia Gillard just before the last election has turned Australian political leaders into timid campaigners for the public vote. We now are being courted by scaredy cats.

Opposition Leader Tony Abbott showed that yesterday with his aspiring and projecting a range of projects, anything short of a genuine commitment he might later be bound by. Or hung from.

Prime Minister Julia Gillard repeated that caution over-load today with an economic policy outline which had no specific, detailed objectives.

Continue reading "How to give a speech that won’t come back to bite you" »

You were always going to hear a lot about disability insurance over the next few years and Tony Abbott today made sure you will hear a lot more. There are some one million disabled Australians and the Opposition Leader told them that under an Abbott government their insurance scheme would be deferred.

In addition, pensioners and low-income families were told that their welfare increases and tax cuts were on the way, but please don’t ask when because Mr Abbott doesn’t know.

In his speech to the National Press Club he logged the disability insurance and a significant number of other economic elements under ``aspirations’’ column, rather than as imminent certainties.

Continue reading "Abbott downgrading promises to aspirations" »

When the annual figures come out on the gender gap in salaries the standard argument is that women earn less because a) they take time off work to have kids, and b) they dominate lower-paid industries such as health and education.

While both those points are solid explanations for the gap, new figures that have nothing to do with either (a) or (b) show women graduates are paid less than the men who graduate from the same degrees - 14 per cent less.

Graduate Careers Australia found in 2011 graduate males started work on a full-time median salary of $52,000, and women on $50,000 (which could be accounted for by different industries). But in 14 industries male starting salaries were higher than female starting salaries in the same industry.

Continue reading "Maybe women are just bad at asking for a higher salary" »

Poor old bankers. They keep telling us how tough it is for them with their funding costs expected to go up and how they will need to keep interest rates inflated.

And if the crying poor line isn’t enough the banks are quick to tell us that we are “picking on them” if we have a debate about how poorly they behave especially when the RBA changes the official interest rate.

Perhaps the “we’re doing it tough” line would carry some weight if the big banks didn’t show record profits year after year and if the banks’ CEOs weren’t getting such big pay packets year after year.

Continue reading "Time for an inquiry into this bunch of bankers" »

Amidst all the presents, food and rowdy family gatherings, Christmas has also traditionally been a time for pause and reflection.

The many modern variations of Charles Dickens’ classic cautionary tale A Christmas Carol, where a miserly old man is visited by the specter of a deceased friend who shows him the error of his ways by traveling through time to reveal the impact of his miserable actions, reveals how this story of reflection and redemption at Christmas time still rings true.

With Labor’s crisis mini-Budget (sneaked in after the Parliament rose for the year and while Australians started focusing on Christmas) revealing yet another deficit blow-out, I can’t help wondering if Julia and Wayne could do with a visit from the Ghost of Budgets Past.

Continue reading "Rubbery figures and the Ghosts of Budgets Past" »

As 2011 fast comes to an end it’s timely to reflect on the significant policy reforms that gave small businesses a helping hand during the year. Central to these reforms has been the move towards Small Business Commissioners around the country.

The year started off with the South Australian Small Business Minister, Tom Koutsantonis, launching a period of wide ranging consultation with small businesses in that State.

With South Australia’s draft small business commissioner reforms unveiled in February and explained during information briefing sessions across Adelaide and regional South Australia, there was considerable excitement amongst small business and farmers that they would finally have an independent person to turn to in the event of a dispute with a larger business.

Continue reading "Zumbo’s wrap: What 2011 meant for small business" »

Wayne Swan has made a mockery of his Finance Minister of the Year award in his dithering, spineless effort at pressuring the banks to do the decent thing on interest rates.

Swan went into half-arsed PR mode yesterday, using the media to spruik the line that the Big Four banks should drop interest rates 0.25 per cent in line with the RBA’s 0.25 per cent cut in the official cash rate.

He could have, and should have, done more. His role is not to lamely express dismay on our behalf. He is the Federal Treasurer. He has contacts. At moments like this, he should personally contact the Big Four bank chiefs and threaten all manner of medieval punishments if they fail to pass on the rate cut, the whole rate cut and nothing but the whole rate cut.

Continue reading "Wayne, shut your jawbone and show some backbone" »

News.com.au has today published the results of its exclusive Cost of Living survey, and the results are a major eye-opener. The take home message is this: a huge number of us say we’re struggling.

Reading the survey, which was taken by 30,000 Australians, you wouldn’t know that we’re one of the world’s 10 wealthiest nations in raw GDP per capita terms. Neither would you think we managed to surf out the worst of the global financial crisis. Or crises. Or whatever.

The national breakdown is as follows. Forty-eight per cent of us say we are “managing to get by”, 28 per cent of place ourselves on “Struggle St”, 17 per cent are “barely coping” while 7 per cent of us are on “Easy St”.

Continue reading "The long road that leads away from Struggle Street" »

Yesterday’s mini-budget tells an economic story but it is primarily a political document.

Outwardly designed to position the nation against the turbulence of a troubled world, its real unspoken mission is positioning Labor for the 2013 election.

At its core is Julia Gillard’s fear that carrying even a small deficit into the election that year, which most economists say would be perfectly justified and even prudent, would allow Tony Abbott to say Labor had never delivered a surplus and never would.

Continue reading "A mini budget with an eye to a major electoral payoff" »

Sure, it’d be really great if the guvmint would buy us all a big yard glass full of beer when we turn 21. I’d like a beer now, come to mention it. Where’s Swanny when you need him?

In all seriousness, the government is not here to fund our lives. We’ve got people called employers to do that. That’s why yesterday’s slashing of the baby bonus from $5,400 to $5,000 is a step in the right direction.

Honestly, when did we get it in our heads that the government should turn up with a cheque at every major milestone in our lives? Having a baby? Have some taxpayer money! Buying your first house? Have some more! It’s middle class welfare gone mad.

Continue reading "The govt is not Santa Claus. Swan is not a sugar Daddy" »

That 2012-13 projected Budget surplus of just $1.5 billion is tea money in Australia’s $1.2 trillion economy. If someone in Treasury has a whip-around to feed the parking meters the Budget could end up back in deficit.

Well, not quite, but the existence of the surplus - should it actually come into reality - will be that perilous, and perhaps that transitory.

But the fact its existence is contemplated at all is remarkable in a global economy where many industrialised nations are on the brink of recession and would be delighted with even a manageable budget shortfall.

Continue reading "Any surplus is a good surplus" »

Update 6:45am: The Minerals Resource Rent Tax Bill 2011 passed the lower house in the early hours of this morning after a marathon sitting day. Voting on the bill and 10 associated pieces of legislation didn’t begin until almost 12.30am AEDT.The vote on the bills finished at 2.42am. Treasurer Wayne Swan said the historic reform meant all Australians would share in the benefits from the country’s non-renewable resources.

It’s no secret, many Australians are doing it tough. With the constant demands of the mortgage, bills and school fees, it’s difficult for many to provide for their families.

Meanwhile, at the other end of town, big mining has not only remained immune to the financial squeeze, they’re doing better than ever.

Australian mining darling Fortescue Metals last week announced a $1 billion profit for the last financial year, a profit made without one cent of corporate tax. This comes on the back of a record $22.5 billion profit announced by BHP Billiton earlier this year and Rio Tinto’s 30 per cent increase in first half profits.

Continue reading "The mining pie is more of a magic pudding" »

I’m a young, Caucasian, university-educated male. Like many who match that description, I have a longstanding man-crush on the President of the United States, due to arrive in Canberra this afternoon.

It’s not just because Barack Obama is such a cool cat. It’s not just because of those 2008 YouTube videos of good-looking ladies singing about how excellent His Excellency is. It’s not even really because of his policies, some of which are spot-on and others, questionable.

I’ve got a man-crush on Obama for an old-fashioned reason. He can spin a story that’s at times, enchanting. He can tell compelling yarns with Hollywood-style blockbuster special effects.

Continue reading "Tell a good story, Barack, or you’ll end up like Our Kevin" »

The markets are melting down again. The ASX 200 fell $33 billion, or around 3 per cent yesterday, on the back of more European scares. As you’d imagine, people like CommSec Chief Economist Craig James were rather busy yesterday. But we managed to grab him for a few quick questions.

What’s the best case scenario?
The best case scenario is that the Italian Government comes out with concrete proposals to address its budget situation. Another positive proposition would be instead of calling elections for early next year the Government or the Prime Minister simply resigns and a new government is formed. So anything that would provide a degree of confidence to the markets – at the moment we’ve got nothing.

And the worst case scenario?
It could be anything. It could be countries deciding to exit the Eurozone. It could be continued silence from the Italian officials on dealing with the situation. One of the worst case scenarios could be a country actually physically defaulting on its obligations. So there’s a whole range of negatives out there. There’s no one specific bad scenario; there are a number.

Continue reading "Punch Q&A: Should we panic over European meltdown?" »

Yesterday’s 0.25 per cent cut in interest rates has been framed in today’s press as great news for people with existing mortgages and those seeking to enter the property market.

Fair enough. On the face of it, it is good news. Repayments on the average 25 year home $300,000 loan will be $50 less this month, thanks to the jolly fellows in red and white fleecy suits at the RBA. But it’s even better news for wealthy property owners and real estate agents, who are both set to reap the rewards of an impending buying frenzy.

No issue in Australian life is framed in a more upside-down, nonsensical way than the issue of property prices. The more the market heats up, the more we sing and dance and rejoice. That, despite “housing affordability” continuing to be the greatest misnomer in Australian life since the show Australia’s Got Talent.

Continue reading "Why the rate cut will just create a deeper rut" »

Somewhere in California a student is having a laugh. His name is Alan Joyce and he holds the Twitter handle @Alanjoyce. A number of people, of whom I am one, wrongly added that name to tweets on the grounding of Qantas (If you’re so proud of taking the “hard decision” how about making one about your pay @alanjoyce ? #qantas).

Fellow tweeps pointed out the error and corrections were quickly posted. I even apologized to Mr @alanjoyce, somewhat pointlessly as the Stanford student understands full well that he does not run an airline any more than the former Hawthorn coach (Alan Joyce) does.

The reason my @alanjoyce tweet got a life of its own was that so many people apparently agreed with the sentiment and retweeted it. Some did not agree but retweeted it too.

Continue reading "Joyce’s wildcat move has mauled the Flying Kangaroo" »

The Occupy movement has certainly been grabbing the headlines over the last week.

Apart from the protests that simultaneously occurred in capital cities around Australia, there was also the controversial police evictions of both the Melbourne and Sydney sites.

In the latest news, it was reported that there are concerns that Occupy Melbourne will be targeting a protest towards the Queen when she visits the city later today.

Continue reading "It’s a bit rich to just dismiss the poor Occupiers" »

The noises coming out of Europe are ominous.  Australians should sit up and take notice.

“If there isn’t a solution by Sunday, everything is going to collapse,” said French President Nicolas Sarkozy before dashing to Frankfurt for emergency talks with German Chancellor Angela Merkel.

“If the Euro fails then Europe fails,” said Merkel. Though she added hopefully: “We will not let that happen.”

Continue reading "The Australian economy is going well. For now." »

One potato per family: First come, first served. That was the instruction to volunteers distributing food in dirt-poor Arizona last week.

“The free potato distributions are for Arizona residents only. You must show photo ID with a local mailing address,” read the newspaper advertisement. Food assistance is the “new normal”, according to the charity Feeding America.

More than half the clients of the Food Pantry system use it for more than six months of every year.

Continue reading "Warring tribes mean moderates are left right out" »

Of all the voodoo economic nonsense circulating at the moment, none is more curious than the idea that the current mining boom is more trouble than it’s worth. You’ve probably heard the claims.

Mining is racing ahead of the rest of the economy, soaking up skilled workers and other factors of production, leaving the non-mining industries in a state of semi-permanent weakness.

According to the script, the boom is the sole cause of the soaring Aussie dollar and - according to one of the more hysterical assessments offered last week - tearing apart the very fabric of our economy. A sober look at the facts paints a very different picture.

Continue reading "If you’re blaming mining you’ve got rocks in your head" »

So. A bunch of European bankers with their sharp suits and their cuckoo clocks want to take a break from their fondue parties and ski lodges made of cognac to tell us about doing it tough as a true blue Aussie.

What right they have, I don’t know. In the global economic climate, ‘Euro’ and ‘money’ make as credible a pairing as ‘Fascist Fun Run’ or ‘Relevant Bono’.

Yet when Euromoney magazine named Wayne Swan the world’s Finance Minister of the Year, it presumed to get stuck into his constituents for their despondency. “Surrounded by the consumer baubles that wealth brings, grumpy Australians don’t seem to appreciate how good they’ve had it,” said the report.

Continue reading "Australia is the unlucky country, girt by misery." »

A friend of mine said something strange the other day. He said: “I miss John Howard.’’

The reason this was strange is because he voted for the Greens. (Obviously I didn’t know this when I became friends with him but what’s done is done…)

But I knew what he meant. Whatever you thought of its politics, the Howard Government was always competent, stable and reliable. Right?

Continue reading "Does anybody else miss John Howard?" »

Australia, which includes the national government and parliament, faces a number of crucial issues.

A short list: the carbon tax; the two-speed economy; problems for the manufacturing sector; real difficulties in the steel industry; coal seam gas extraction versus prime farming land.

Further, there are serious worries about productivity levels; concern about the need for a review and revamp of the industrial laws, which everyone except the unions and the government are suggesting are too rigid.

Continue reading "Shut the hell up and get back to running the nation" »

By many counts, Australia’s economic position is to be envied by the world. Assuming the Gillard government can deliver on its promise, there will be a surplus for the 2012-13 budget. We are experiencing historically high terms of trade: importing on the cheap while exports sell high.

Unemployment is only a touch over 5%. Our dollar has overtaken the US Greenback. We have the second lowest public debt (proportional to our GDP) in the industrialised world. And If you’ve listened to Treasurer Wayne Swan open his mouth in the last 6 months, you’ll know that our economy’s “fundamentals are strong”.

It may surprise some therefore, that I would suggest that this is no time for complacency about our future. Indeed, our position is more precarious that one might initially think. For there’s another side to the Australian story: lopsided growth, struggling non-resource exporters, depleting natural resources, coming challenges of an ageing population and climate change, and a vulnerability to oscillating commodity prices. Considering these factors, it is best that the orthodox optimism surrounding our economic future be taken with a grain of salt. 

Continue reading "Australia must have a sovereign wealth fund" »

It’s a management case study that will live on in textbooks for decades.

Just weeks after banning employees from leaving post-it notes on computers or eating lunch with strong odours, resources giant BHP has announced a whopping great profit of $A22.5 billion, up 85.9 per cent.

Of course it wasn’t only the absence of messy post-it notes that pushed profits into the stratosphere. There was also the company’s nation-wide crackdown on jackets slung over the backs of chairs. Oh, and record prices for Australian coal, iron ore and gas.

Continue reading "Bloody Huge Profit" »

Jonathan Gold and I will never be friends.

The savvy food critic who writes for the LA Weekly is an avowed and unapologetic tipper.

His recent column, Top Ten Tips for Tipping is not only hard to say, the subject itself is completely indigestible. “The idea that a tip is optional, or variable, is a useful fiction, even when the soup goes tumbling into your lap,” Gold writes.

Continue reading "Let me give you a tip: Only pay extra when it’s worth it" »

Twenty years ago today, Muscovites awoke to tanks in their streets in a ill-fated coup against the modernising leader, Mikhail Gorbachev.

It was, it turned out, the last gasp of the hardliners and within months, Soviet communism was officially over.

Along with the collapse of the Berlin Wall two years before these events were viewed somewhat triumphally as the end of history. Indeed a book of the same name was a publishing sensation in the early 90s.

Continue reading "An island of calm amid global economic meltdown" »

The political no-holds-barred clashes Australia is used to, are now being blamed for adding to our economic jitters.

This has raised the critical question of whether pulling apart the economic record of a government could damage the economic performance of the entire nation.

“I remain very confident about Australia’s medium term economic prospects,” shadow treasurer Joe Hockey said yesterday, using words Treasurer Wayne Swan would endorse.

Continue reading "Sure, keep Swan honest, but don’t talk down the economy" »

A well-intentioned old mate has led Tony Abbott into an ambush which could expose the Opposition Leader to the charge he is an empty policy vessel.

Abbott has damaged his close ties with the mining industry by appearing to back the right of land owners to deny access to those search for oil and gas deposits.

At issue is the coal seam gas industry in Queensland, the target of some $45 billion worth of projected investment. Further, he has alarmed the sector by pledging to stand up against foreign investment.

Continue reading "Abbott’s policy vacuum bites him on the bum" »

My political bubble recently burst when I realised this is a quintessential Labor government. I was convinced the Labor Party was just a microeconomic reform away from returning to its successful period of economic rationalism and bold reform between 1983 and 1996.

The delusion was abetted by the Prime Minister and her shallow rhetoric that she was reformist in the Hawke and Keating tradition.

I was lured into supporting the Labor Party by the Keating-inspired economic reforms that remade a moribund economy into an open and internationally competitive one.

Continue reading "RIP to the Paul Keating legacy" »

Have you heard of Changsha, Chengdu and Chongqing? How about Wuhan or Weifang? Indeed try a little test: name seven cities in China … you can even count Hong Kong.

To my shame, I was unaware of any of these places before I set off for China last week. I was also unable to name seven Chinese cities.

As a late ring in for our Foreign Minister – who had something on even closer to his heart than China – I joined Trade Minister Craig Emerson in leading a trade delegation to China of a hundred Australian businesses.

Continue reading "A city the size of London in the middle of China" »

Share market panics are scary and absolutely no-one knows for sure where they’ll end up.

The smarties will talk about buying bargains now because Australia’s future is more linked to China than the US or Europe, and how our economy is much better placed to ride out any financial storms than the rest of the world.

They’re right. BUT share market panics are not logical. They’re driven by emotion and almost impossible to predict.

Continue reading "Ignore the crash, and have some beer and skittles" »

With the markets still dancing their crazy dance this morning, The Punch threw a few questions at CommSec chief equities economist Craig James. He’s the guy best known for inventing the iPod and iPad indices, which measure the relative price of said products in countries around the world.

Last time, it was the Lehman brothers collapse. What has sparked the market plunge this time?
It’s countries rather than banks or companies this time. The [market plunge] has been sparked by debt levels being held by Europe in particular, but also in the US. Investors as well as ratings agencies have a degree of impatience. They want to see improvements sooner rather than later. In my opinion a lot of investors and rating agencies are unduly focused on debt levels rather than [countries] growing their way out of it.

Continue reading "Relax, it’s not another GFC" »

One of the joys of multiculturalism is that if you suddenly find yourself hankering for a kilogram of pork belly or some Hello Kitty stationery at 9pm on a Monday, you can head to a suburb such as Ashfield in Sydney’s west and shop until you drop.

If Australia has a restrictive shopping hours regime, someone forgot to tell our Chinese friends. In places such as Ashfield or in the many Chinatowns around the land the shops open pretty much whenever they want – which, with the work ethic that defines this excellent community, is almost all the time.

It’s a different story if you have the misfortune of landing in the centre of one of our bigger cities – worst of all Adelaide – on a public holiday weekend, only to discover that penalty rates and state-legislated restrictions on trading hours have combined to deliver a retail experience which is almost as much fun as queuing for bread in Moscow.

Continue reading "The shop must go on…" »

Shut down the Productivity Commission. There’s only one reason shopping as we know it will never die, and that’s women.

That’s right, you heard me. From the malls to the arcades, we fairer sex are the lifeblood of shopping and it will take more than a little internet habit to put us off our game.

Here’s why.

Continue reading "Half of us were born to shop" »

Dear Traditional Australian Retailers, 

Finding the right words to say at a time like this is difficult so we’re going to get straight to the point. It’s over.

Obviously it would have been preferable to tell you face-to-face rather than via one of these tacky “Dear John” letters. But it’s not like you’ve been interested in personal contact lately. Which makes this an entirely appropriate way to break the bad news that it’s not us – it’s you.

Continue reading "A letter to Australia’s traditional retailers: it’s over" »

Wayne Swan’s October tax summit is set to deliver on public expectation, but don’t get too excited just yet. Expectations of root and branch tax reform are lower then the chance of Julia Gillard keeping her next promise.

Australia’s productivity slump cries out for sharp and fierce action to remove the dead wood our economy is carrying. But you won’t find relief anywhere in the Treasurer’s plans.

If the release of the Treasurer’s insipid discussion paper is anything to go by, the same few unenthused journalists might make an appearance to cover the announcement of the 1 or 2 revenue neutral changes that will eventuate from this talk fest.

Continue reading "Swan’s Canberra summit is a massive tax dodge" »

Alcohol. The anti-alcohol lobby say just one drink increases your risk of cancer, and news yesterday was that cigarette-warning-style labels will start appearing on bottles of booze. The social costs of alcohol are often cited as an additional reason to crack down on it. Here, Dr Eric Crampton casts a sceptical eye over how that social cost is measured.

If I told you that surfing cost the Australian economy a billion dollars and that we consequently should make life jackets compulsory, you could be forgiven for thinking that the number represented some real cost to the community; perhaps the cost of rescuing surfers caught in rips or medical care for those injured in accidents.

But if you found out that the vast majority of that figure was the combination of surfers’ expenditures on their boards and the costs of holidays they took heading up to Yallingup, you might think twice about endorsing the policy recommendation. And you might wonder a bit why anybody would have thought those costs could matter for policy.

Continue reading "Don’t base policy on crapulous alcohol statistics" »

Recently a colleague mockingly asked me why I bothered writing. I replied: because the quality of debate is appallingly bad.

Exactly, she said. Thus with a sense of light-hearted despair at the recent banter in the media, I weigh into Australia’s strategic policy apropos the on-rushing war with China.

It appears that the conservative minds that discuss strategic policy are aligning. China is growing, the world is changing, and power is being redistributed. According to those who subscribe to the various brands of “Realist” international relations theory, this situation necessarily entails armed conflict between states.

Continue reading "Should we defend the Great Wall or the Grand Canyon?" »

Derryn Hinch won the Great Organ Gamble, scoring a life-saving liver. Many lose that lottery. Many people die waiting for organs.

The latest statistics, from the Australian & New Zealand Organ Donation Registry, show about 1600 Australians are waiting for organs – 176 for livers. More than 1140 for kidneys, 96 for hearts, 146 for lungs.

Hundreds die waiting. Demand exceeds supply. We can increase supply – by getting more people to sign up for organ donation and to make sure their families are aware of their wishes – but there won’t be enough any time soon.

Continue reading "I’ve got a hunch that Hinch is just the beginning" »

Over the past three decades we have seen successive Governments expand the size and scope of the Federal Budget, to the detriment of all Australians - and I must emphasise this is a bi-partisan issue.

This year’s budget with all its debt and deficit continues a disturbing trend with the centralisation and growth of the Federal Government. Treasury figures show the total dollar value of Australian Government spending has grown from $176.9 billion in 2000-2001 to $314.3 billion by 2010-11, a total increase of 78 per cent.

This equates to 5.9 per cent growth per annum over the past decade.

Continue reading "It’s time our Government trimmed the fat" »

Like anyone else, Australians are keen to pick up a bargain.

Our grocery aisles are filled with premium brand products alongside their cheaper cousins. We like to get the best deal when we’re buying an appliance, building our homes or fuelling our cars.

And let’s face it, while we all like to buy Australian made, we mostly consider the origin of products after we’ve checked the price tag. Who can blame us? We’ve all got families to feed and bills to pay. And a dollar only goes so far.

Continue reading "Don’t dump on the govt for protecting Aussie industry" »

When 150 business and union leaders, academics, accountants, bureaucrats and politicians gather this October for the long-awaited tax summit, few believe it will result in rapid change. This is tax policy after all. As someone once observed: “it’s not rocket science, it’s more complicated”.

While the summit, or “forum” - as the Government now calls it having been dragged to it in the deal with independents to form a minority government - will be more substantial than Kevin Rudd’s celebrity-heavy 2020 ideas summit, only the sunniest of optimists expect actual measurable change to come from it in the short term.

Rather, the hope now is that approaching four years since the then Treasury Secretary Ken Henry started the process, the Government will map out the field.

Continue reading "Taxation 101: Not everyone can get a tax cut" »

The world as we know it will end on July 1, this year. That is the day the Greens take power in the Senate. James Arvanitakis explains.

Not that long ago, I toyed with the idea of setting up my own doomsday cult. The problem is that I failed to find any of the basic ingredients that attract followers: charismatic leadership, the ability to ask for money from complete strangers, a doomsday message and a specific date to rally support. I have always been fascinated by doomsday cults. Every time I hear that a charismatic leader has picked a specific date for the end of the world – be it the arrival of extra terrestrials or the predicted Rapture – I get out my diary, mark the date and begin to make plans around it.

As readers of The Punch would know, the most recent episode was the claim by the Harold Camping and the crew over at Family Radio predicted the world would end on 21 May 2011. Using the date to rally friends and family, a group of buddies went out for a farewell bonding session a few days beforehand. I also organised a weekend to enjoy time with loved ones just in case. To tie things up I also left a farewell message on my Facebook page and completed all my marking.

Continue reading "It’s the end of the world as we know it, and I feel Green" »

A delegation of Australian MPs has been given permission to inspect the New Zealand apple industry - as long as they don’t go near any apple trees.

Instead, they have been invited to tour New Zealand dairy farms, according to the chairman of a parliamentary committee.

The restrictions are the latest flare-up in the battle over fire blight, an agricultural disease which could destroy entire orchards.

Continue reading "Kiwis and apples: Something is rotten at the core" »

It should come as no great surprise that the Federal Government’s Climate Commission has produced a new report with dire warnings backing Labor and the Greens’ case for a carbon tax.

The report would really have created headlines if it said climate change was not real or that a carbon tax was not a necessary part of measures to prevent it, along with carbon sequestration.

There was nothing much new, apart from a claim that sea levels could now rise up to one metre by the turn of the century, which is higher than even the Intergovernmental Panel on Climate Change’s top range forecast of 0.18m to 0.76m.

Continue reading "The Climate Commission report is full of it" »

Bob Katter gave a press conference today, to announce that he may or may not form a new party. In the end, that was hardly the point.

If the independent member for Kennedy was sketchy on the details of his immediate political future, he was as forthright as a charging bull on his concern for the future of the Australian economy, a concern the nation’s leaders appear to have forgotten.

As usual this week, our leaders are banging on about big picture crap. Gillard is flogging her dead horse of a carbon tax, Abbott’s busy telling us the sky is falling under the weight of asylum seekers, while Bob Brown continues to rail against everything except the destruction of the trees he was originally elected to protect.

Continue reading "If this hatter’s mad then invite me to the party" »

Many of Australia’s brightest researchers and innovators will gather in Brisbane this week for the annual conference of the Cooperative Research Centres (CRC) Association.

Conspicuously absent will be Science and Industry Minister Kim Carr.  The fact he has apparently withdrawn from attending the conference in the wake of last week’s Federal Budget speaks volumes about Labor’s latest debacle. 

Like many of their wacky and ill-conceived programs – the devil is in the detail (or the detail omitted) with this latest Budget.

Continue reading "Now let’s talk about what wasn’t in the budget" »

As an alternative Prime Minister, former Bulletin journalist Tony Abbott makes a pretty good shock jock. For the second time running Abbott has used his formal budget reply speech not to outline an economic program for Australia but to launch a colourful and energetic but essentially empty political rant about the failures of the Government.

That’s not to suggest that the Gillard Government is light on for failures - far from it. There have been plenty and there are now more after Tuesday’s largely uninspiring Federal Budget. To a significant degree, it’s Tony Abbott’s job as Opposition Leader to chronicle those failures. It is, however, also Tony Abbott’s job to explain what he is going to do as Prime Minister. 

As a former journalist, Abbott is prone to one of the most disliked features of the profession – he is much better at critiquing, attacking and denouncing than providing workable alternatives. He has made two formal budget replies as Opposition Leader and both have been criticised. They have sounded more like thundering newspaper columns or talkback radio editorials than economic speeches.

Continue reading "Tony Abbott, alternative PM or political commentator?" »

Irony of ironies. In a time of unprecedented communications control where political statements are workshopped to death, both sides of politics are struggling for clarity.

What for weeks had been slated as a tough Budget softened greatly as the day approached and eventually emerged as a “Labor Budget”. In name anyway.

Indeed, Wayne Swan, Julia Gillard, and Penny Wong said so often as they ‘executed’ their media plan - a dizzying blitz of interviews across the land. Yet in reality, it was perhaps more of an old-style Liberal budget, winding in spending, lowering welfare payments and attaching tough new strings to disability support payments, the dole, and other supports.

Continue reading "Budget 2011: We’re all liberals now" »

It was billed as a tough budget but the document Wayne Swan brought down tonight will win no awards for bravery and lead to no riots on the streets.

There are $22 billion of savings in the budget - Swan’s fourth as Treasurer and Julia Gillard’s first as Prime Minister – and they include the $1.7 billion flood and cyclone levy which clobbers higher income earners over the next two years.

But there are no measures among this scary-sounding $22 billion figure which will lead to any social dislocation or public unrest. As a result, when Australia returns to surplus next year, it does so to the very modest tune of just $3.5 billion.

Continue reading "Swanny cuts away at spending with a tomato" »

Fresh from declaring that “climate change is crap”, the Opposition has trawled through their repertoire of One Nation emails to emerge with a version of recent economic history that airbrushes out the Global Financial Crisis. 

This denial theory being peddled by the Opposition is that the “GFC was crap”.  If you listen and watch closely, everything they say and do is based upon this single “article of denial” – that the Global Recession was a figment of Labor’s imagination. 

Continue reading "Counterpunch: We saved Australia from a recession" »

My wife and I came from traditional working class backgrounds and single income families. We are now considered middle class as we live in our own home, we own a newish car and enjoy a comfortable lifestyle because we have worked hard and saved for the future. 

Our home, car and assets are insured and we have managed our finances carefully in order to access such benefits as private health insurance. In the current economic climate we are regarded as “haves” but we seem despised by some elements of the community who consider themselves the “have nots”

American pollster John Zogby sees a growing number of the community falling into the “have not” category. He calls them the “Dreamless Dead” being those who no longer believe in the existence of hard work to achieve success in life.

Continue reading "Financial responsbility can reward when disaster strikes" »

Wayne Swan could be forgiven if he puffed out his chest a little during a TV interview in New York couple of days ago.

“You’re a combination of what, in the US, would be Timothy Geithner and Joe Biden all in one person,” said CNBC business anchor Erin Burnett.

Geithner is the US Treasury Secretary, Biden the Vice-President. All Burnett was trying to do was explain Swan’s twin roles as Australia’s Treasurer and Deputy Prime Minister, but she made him sound like some kind of super-politician.

Continue reading "Super Swan ready to hang tough on Budget" »

Greg Combet has more policy hounds on his tail than any other minister. He is in charge of the introduction of a “carbon tax”, and the arguments against him have been outnumbering those for.

So the Climate Change Minister went to the National Press Club to highlight—and he hoped erase—some of those policy problems which are dogging this attempt to get up a pricing mechanism for carbon pollution.

He all but ticked them off, one by one, in front of the audience.

Continue reading "Combet on carbon: What he said and what he meant" »

Julia Gillard is not the first Australian Prime Minister to come to office with no experience of or interest in international relations. Unlike most, however, she appears disturbingly reluctant to learn.

While there is nothing inherently wrong with a Prime Minister admitting that she has no particular passion for foreign affairs, limited interest doesn’t excuse a lack of competence.

Sadly, Prime Minister Gillard’s performance to date has been marred by a series of embarrassing incidents, of which the obsequious performance before the United States Congress and her persistence with the refugee processing centre in Timor Leste against the manifest objections of Timor Leste’s government are just the most recent examples.

Continue reading "Counterpunch: Get out there and spruik us, Julia!" »

When NSW Labor is wiped off the map tomorrow, it will partly be because, as Joe Hildebrand pointed out, the Labor government has rather impressively committed every sin known to mankind. But mostly, it’ll be because the government is widely viewed as having reduced this state to tatters. The question is: Is NSW really in such bad nick?

I have lived in NSW for about 30 of my 41 years. The sun still shines, the trains still crawl and the water still runs, except of course for that time in 1998 when it was full of nasty parasites.

In most respects, this state is nowhere near the basket case some make it out to be. Obviously, NSW would have benefited from something approaching a competent government for much of the last 16 years, but it’s not all gloom and doom in Woolloomooloo, and beyond. Let’s take a closer look.

Continue reading "NSW: It’s not actually that bad. No, really." »

Prime Minister Julia Gillard’s carbon tax announcement represents one of the most brazen and fundamental pieces of political dishonesty in recent memory. That she chose to make the announcement surrounded by the Greens Senators and independent MPs upon whom her government depends gives us a telling insight into the factors at play.

If we look at the situation objectively there are only two possible explanations for such an announcement. The first is that Julia Gillard knowingly and deliberately told an enormous lie before the last election in a craven attempt to win over conservative voters.  The second is that Bob Brown and the Greens are in charge and the Prime Minister has been reduced to little more than the public face of a Greens Government.

Judging from their public comments over the past few days, Senator Brown and his deputy Christine Milne both clearly subscribe to the latter view:

Continue reading "PUNCH: It’s way too easy being Green" »

Gillard is becoming a very good Prime Minister.

History doesn’t judge a Prime Minister by the quality of Australia’s education or health systems, their foreign policy achievements or empathy for flood victims but by economic management, including a capacity for tough economic reform.

In other words, economic policy makes or breaks a Prime Minister and everything else is just noise. By this measure, Julia Gillard is on the cusp of becoming a very good Prime Minister.

Continue reading "Gillard: From policy dud to economic hero" »

One of the worst features of the old industrial relations system was the so-called “go away money”.

This was the practice of employers paying amounts, usually in the order of $5,000 - $10,000, but sometimes much higher, to employees making an unfair dismissal claim.

It was a particular burden for small businesses who could not afford expensive HR managers, or the legal and time costs of defending a claim, no matter the merits.

It has now become clear that the old practices have returned. 

Continue reading "The return of the ‘go away’ money" »

Wayne Swan is aggrieved. The hard-working treasurer is disappointed at the way his long-heralded bank reform package has gone over. But should he be surprised really?

Let’s face it, bank packages, especially over-hyped ones, always underwhelm. Knowing this, it is curious that the Government has again managed expectations so ham-fistedly, taking weeks to reveal an unremarkable hand. Perhaps, like many things, it depends on where you stand.

After toiling away behind the scenes, the Government feels it has offered up serious reform. This may or may not turn out to be true if things like genuine portability of account numbers come to pass. Ditto with allowing banks to tap into the one trillion dollar national superannuation nest-egg, which may help storm-proof the finance sector against future global credit crunches. But neither of these reforms, nor many other aspects of the package, will do much for home-owners right now.

Continue reading "There’s not really a lot Wayne Swan can do about banks" »

Treasurer Wayne Swan, as Acting Prime Minister, began his press conference today by acknowledging Australians who have been hit by savage, widespread flooding.

Then he started talking about how he was going to help ordinary Australians by shaking up bits of the financial system, and it was at that precise point that Wayne Swan lost about 99 per cent of banking customers.

Floods they could understand, even if they were high and dry; covered bonds and RMBS funding were outside their usual ATM transactions.

Continue reading "That’s all great Wayne, but what about interest rates?" »

This is the best thing we’ve seen in a while. Extreme language warning, not even close to safe for work. Enjoy.

Let’s sack the economists and put this bloke in charge.

Does Australia need a Quota Law? Most would say ‘no’ – just as they did in Norway when it was introduced. Now that at least 40 percent of board seats on Norwegian Public Listed Companies are held by women, the Quota Law is widely accepted across Norway as a reform ‘they had to have’.

But has it produced a result down the food chain? A recent study has said ‘not at this stage’, questioning if quotas are required at management and executive levels or if the marketplace and gender conscious Norwegian society will address this imbalance.

The Quota Law requiring companies to appoint 40 percent of the under-represented gender to their boards was announced by the Norwegian Minister for Trade and Industry in a conservative government, in 2002 and approved by Parliament in 2003.

Continue reading "Is a quota for boards reform we “have to have”?" »

To some Australians the high dollar is cause for celebration.

A great way to pick up a bargain over the internet or a cheap holiday overseas. But for many, including 100 workers at Caterpillar in suburban Melbourne last week, it means watching your industry become less competitive and suddenly finding yourself out of a job.

The cause of the high dollar is Australia’s mining boom.

Continue reading "A high dollar carries an even higher price" »

There was a fiery exchange between two readers in the comments section of one of Australia’s news websites this week which provided a handy snapshot of the generational fault line in the debate over interest rates and the cost of living.

It’s a battle which is being fought between older Australians who have paid off or almost paid off their homes and who have a vested interest in the banks jacking up rates, and younger Australians who are mortgaged to the hilt, with both partners working to cover the mortgage, the bills and childcare, for whom every single-point increase in interest rates is a body blow to the family budget.

This divide has been widened by the actions of the Commonwealth Bank and the ANZ in overshooting the Reserve Bank’s official cash rate and stumping for controversial interest rate hikes. It has also been fuelled by the stated intention of the Reserve Bank itself, in trying to encourage more Australians to save, rather than getting themselves saddled with debt. As a result, for every angry 30-something or 40-something mortgagee who is fuming about the bastardry of Ralph Norris and Mike Smith, there’s a guy in his late 60s who’s planning a fortnight away in the caravan with his wife, saying: “Thank you, fellas.”

Continue reading "Selfish boomers -v- stroppy Gen-Xers in bank wars" »

This government must have the courage and discipline to cut spending, reduce borrowing and to repay debt.

The mid year economic update (MYEFO) expected this week needs to take the form of a mini-budget. Wayne Swan needs to accept that government spending has and is contributing to the upward pressure on interest rates. We have now seen seven rises under his watch.

The Treasurer was at direct odds with leading economists such as Saul Eslake, Chris Richardson and RBA board member Warwick McKibbin, when he said: “Anybody who’s claiming the stimulus is somehow related to rate rises is simply talking rubbish.”

Continue reading "Labor should cut spending to protect home-owners" »

With the coming release of John Howard’s autobiography, Lazarus Rising, it’s worth considering Howard’s standing in Australia’s political history, and to compare him to his arch-nemesis, Paul Keating. 

John Howard and Paul Keating were political titans for 30 years but were vastly different politicians—and famously couldn’t stand each other.

Australian politics has enjoyed many compelling rivalries, such as Keating and Bob Hawke, Howard and Peter Costello and Julie Bishop and a garden gnome, but none have been as rancorous as between Keating and Howard. 

Continue reading "Howard was good, but Keating was better" »

If you looked at the value of the Aussie dollar as a sign of our economy strength, things have never been better: since the currency was floated in 1983, it’s never reached such a high value. Here we found ourselves 27 years later practically rolling in money, with a dollar nearing parity with a value in the high 90’s.

Let’s ignore the negative for a moment, shall we? The good side of the value in our dollar obviously lies in how much our prices are going to drop – at least, that’s the way it’s supposed to go if we believe what we’re told. Sadly it seems the opposite is mostly the case.

As luck would have it though, the modern age has found a way around that, as it’s now much cheaper and easier than ever for you to go on the internet and purchase anything you’d like at cheaper prices overseas, thereby bypassing the expensive Australian retailers.

Continue reading "Where to cash in on the strong Aussie dollar" »

With official interest rates set to rise and the costly festive season looming large on the horizon there’s no doubt Australian’s budgeting skills will be put to the test over the next few months.

Financial skills are incredibly valuable but it’s often not until you get older that you begin to appreciate the small lessons about saving and spending your parents may have taught you when you were a kid.

Growing up on a farm meant my Mum and Dad generally made the most of having me and my two siblings around during school holidays to do the jobs that needed to be done. Often we were given the opportunity to make some cash carting hay or working in the wool sheds.

Continue reading "Giving kids an early start in learning to make ends meet" »

Have you been getting excited at the rise of the Aussie dollar? Well, you should be. Of course, those planning an overseas trip will be particularly excited. A strong Aussie dollar gets you more foreign currency to spend on that overseas holiday. The benefits of a stronger Aussie dollar, however, should not stop there.

All Australian consumers should be getting excited as the Aussie dollar surges upwards. Why? For the simple reason that all imported products should now be much cheaper.

The economics is simple. Just like a strong Aussie dollar buys you more foreign currency when you go overseas, a strong Aussie dollar means importers can ordinarily buy foreign products at effectively lower prices.

Continue reading "The great import rip-off: why isn’t everything cheaper?" »

In 2007/2008, the creative industries contributed $31.1 billion in industry gross product to the Australian economy, which is equivalent to 2.8% of GDP, and employed 316,600 workers.

The creative industries achieved an average annual growth rate of 5.8% over the last 11 years to 2007/2008, well above the annual growth rate for the broader economy of 3.6% over the same period. The Software Development and Interactive Content segment is responsible for much of this growth, accounting for 43.8% of earnings and 38.3% of jobs in 2007/2008.

The games industry in particular is a fast-growth industry in which Australian opportunities are shaped by large international enterprises. This growth is dependent on sustaining a pool of highly skilled workers. Technical creative and business skills have been in high demand over the last decade. However, a serious shortage of skilled employees is a major factor contributing to the almost $2 billion trade deficit in Australia’s digital content industry.

Continue reading "We’re not the clever country if we’re not a creative country" »

In the world of employment, the growing skills shortage is like a low, black cloud building on the horizon.

While the GFC slowed the demand for labour it didn’t change the fact our workforce is ageing. In a few years more people leaving the workforce in Australia than joining it.

As workplace age management expert Alison Monroe quipped recently, “the only thing that changed during the GFC is that boomers got two years closer to retirement.”

Continue reading "Gen Y might rule the world sooner than we thought" »

While enjoying a nice Saturday afternoon news came through that Julia had announced her new ministry. Immediately this author combed through the list looking for the name of the new competition minister. Alas, there was no specific mention of competition on the list of portfolio responsibilities. Nor was there specific reference to consumer affairs on the portfolio list.

Now that’s disappointing. Was the omission of an express mention of competition and consumer policy an oversight? Or was there an implication that these were not considered sufficiently important in the new Labor minority Government?

Well there is an old saying that if you have a choice between a conspiracy or a stuff up, then you first go for the stuff up. That makes sense as references to conspiracies usually attract suggestions of paranoia. So let’s stick to the possible stuff up theory.

Continue reading "So who really is the new Labor competition minister?" »

At the start of this year, the Greens were huddled in a little cottage in the Tasmanian wilderness, admiring some magnificent trees.

But someone spoilt the serenity and raised an uncomfortable topic for a left-wing environmental party. “What are our economic policies?”

“I hadn’t given it much thought”, Greens leader, Bob Brown said.

“But we should have economic policies. We are Australia’s third largest political party and may hold the balance of power in the Senate after the next election. We need to say something on the economy.”

“True”, said Brown, still distracted by an exquisite Gum tree out the window. “Does anyone in the room know anything about economics?”

There was an uncomfortable silence in the room.

Continue reading "Left-wing Greens grapple with economics" »

I was at a pub a couple of weeks ago and a friend asked my prediction about the election. Not much into making predictions I speculated that Abbott would do better than anyone expected and the ALP were running a campaign that could ruin them. One of my other friends jumped in and said, ‘it’s the tax, the mining tax, the idiots should never tax the one thing that makes us rich’.

An interesting debate followed that only ended when someone reminded me that it was ‘my shout’. Being a Saturday night and with the footy on the big screen, I think we simultaneously decided that this discussions about tax do not make for an ideal night out.

While the country remains in political limbo and the power brokers are cutting deals, the mining tax is one of those issues that seem to be bubbling below the service.

Continue reading "Why the Independents should dig the mining tax" »

Many voters will only be tuning in to the election campaign this week but anyone paying even scant attention over the past month will have heard much of what Julia Gillard said when officially launching Labor’s campaign today.

Most of it was Gillard’s standard stump speech but it set down the lines on which the government wants to fight the final week on its strengths of broadband, healthcare, and voters’ increasing confidence in the Labor party’s powers of economic management. It was a low-risk, sober affair (no theme song audible on the TV coverage) as Gillard took the stage; Labor has had its fair share of distractions this campaign, thank you very much.

The knifing of Kevin Rudd and the poor standing of the Labor brand in NSW and Queensland have been matters of record that have dragged on the government’s campaign but Gillard took the opportunity of this set piece just days out from the election to talk positively about the future.

Continue reading "Gillard does the vision thing" »

I once had the misfortune of working with some ‘Labor types’ in a commercial setting.

Didn’t they turn out to be a bunch of rapacious little capitalists! They had a cartoon image of what business is: shamelessly and greedily gouging customers.

My ‘comrades’ – few of whom remain in the commercial world – thought business was a big game and a bit of a hoot. One of them asked me to refer to him as a ‘businessman’. (I’ve never known a proper businessman who wants to be referred to as one.)

Continue reading "You know it adds up: Labor are innumerate" »

Note: Liberal MP Sophie Mirabella and Labor MP Richard Marles are among our favourite contributors to The Punch, and we have asked them to write a piece every Friday during this five-week election campaign giving their take on events.

The most talked-about aspect of the federal election campaign so far would have to be Labor’s vacuous and meaningless slogan “moving forward”. 

Ms Gillard is too scared of the mess she left behind as Deputy Prime Minister to look back.

She cannot ask the Australian people to vote for her as Prime Minister when she is unable to defend her credentials as Deputy Prime Minister. And while I may earn the ire of many by even mentioning it again - given the Prime Minister’s nauseating repetition of the slogan (dubbed “mo-fo” by the twitteratti) – I have a suggestion that would lend it some meaning and accuracy. A simple addendum: “Moving forward at a cost of $100 million every day”.

Continue reading "Liberal diary: Julia’s moving forward at $100m a day" »

With the major parties flexing their muscles on border protection, the Australian public has sent Canberra a message that it is the protection of Australian jobs that is the real security issue for them.

In what looms as the sleeper issue for the 2010 election campaign, a quarter of all voters placed “Australian jobs and the protection of local industries” as key election issue, behind only economic management and health.

As the latest Essential Report shows that economic protectionism towers over headline-grabbing issues like climate change, asylum seekers, housing affordability, industrial laws and population growth as a priority election issue.

Continue reading "Even with a strong economy, jobs are a top concern" »

We hear a lot about the so-called two-speed economy these days but Julia Gillard is grappling with a more immediate problem, a two-speed electorate.

In fact it is `the’ challenge vexing the new PM and her strategists and probably goes a long way to explaining her last minute hesitation in actually pulling the election trigger.

First, to the economic side.  This week we saw more evidence of the perverse effects of that two-speed economy via an extraordinary _ for which you can read transparently political _ economic ``update’’ just two months after the May Budget.

Continue reading "The two-speed election: the battle for two sets of voters" »

Listening to Wayne Swan’s press conference to update us on the state of the economy yesterday it was as if Little Britain’s Vicky Pollard had been asked to explain our finances.

(Dramatic recreation)

“Treasurer: Yea but, no, but yea, but no but. That wasn’t even there before da mining tax cause so we didn’t lose da $7.5 billion. Anyway commodities are worth more now. Anyway shut up!”

Listening to it you were conscious of the fact the words were English, but as it progressed it became apparent those words had no necessary connection to one another. It was a kind of absurdist, avant-garde approach to answering questions which could see our treasurer hailed at the forefront of the “Aussie new wave” of economic analysis.

Continue reading "Campaign countdown: Yeah but, no but, Swan explains" »

Not since Paul Keating introduced compulsory superannuation contributions in the early 1990s has there been such an important opportunity to change the way Australians think about saving for their retirement.

This urgent need for change is magnified when Australians are asked how much they actually know about their superannuation. A recent survey by Suncorp Life found 49 per cent of us don’t understand our super, and 30 per cent of us don’t believe our super is even our own money. Annual changes to the superannuation system are also a constant and frustrating occurrence. That’s why it’s vital for the Government to get it right this time.

The results of the much-anticipated Cooper Review announced last week urge a range of sweeping reforms to superannuation, and herald an exciting new era for the industry. The question is whether the Government is prepared to do what’s needed to simplify the system, and restore Australian’s confidence in superannuation.

Continue reading "We might save more in super if we knew where it went" »

The Labor government is clearing the decks to position itself for the forthcoming federal election. After resolving the mining tax dispute, and adopting a position on asylum seekers, climate change is the last issue Gillard must address before the campaign. Whatever policy the Gillard government adopts must account for the scale of the climate crisis.

Current levels of greenhouse gases in the atmosphere are already so high that if unchecked will push the climate system past significant tipping points. This worst-case scenario poses an unacceptable risk of dangerous and irreversible changes to the climate, to biodiversity, and human civilisation. These adverse climate changes will affect Australia’s food and water security, and increase the risk of regional instability.

The worst of these impacts can be avoided, but only if Australia, together with other major polluters acts now and at a scale the challenge demands.

Continue reading "The route to make Australia a world leader in clean energy" »

There is a wildcard hanging over the upcoming election, a factor outside the control of the any politician – it resembles an angry fish, and it is looking for someone to bite.

It is the long-term trend line on people’s economic confidence, and it shows that after we sounded a collective sigh of relief last year, we are beginning to fear the worst again, a sense of economy insecurity that can affect our work, our home lives - and the way we look at politics.

The story of the fish charts the highs and lows of first term Labor, it also offers some tantalising clues about what happens next. Why a fish? As the graph above shows, the competing stories of confidence and despondency have taken a wild journey over the past two years.  With fear surging as the GFC hit, curtailing as stimulus stabilised the economy, but now rising again.

Continue reading "The angry fish that could change Australia" »

It’s being heralded as a breakthrough and a huge win for the new Prime Minister Julia Gillard - a deal with the biggest three miners on what was once called the Resource Super Profits Tax.

Aside from a less scary new name (the Mineral Resource Rent Tax) eight days into her tenure Gillard has dropped the rate from 40 per cent to 30 per cent, and increased the threshold for kick-in from about 6 per cent to about 13 per cent. The latter will ensure the number of companies effected will be slashed from the many thousand to the few hundred.

The backdown (let’s call it what it is), will cost the Government’s Budget bottom line about $1.5 billion. To compensate the Government has decided not to cut the across-the-board company tax rate from 30 per cent to 28 per cent, instead cutting it to 29 per cent from 2013-14.

Continue reading "Compromise or capitulation? Gillard’s mining backdown" »

Well, well, you know that there is an election coming when politicians get a bit more sensitive. That’s the thing about your average politician.

They all want to be praised for their good work and want us to overlook their failures. The problem is that sometimes there is little or no good work, and plenty of failures.

Continue reading "So who really is campaigning for small business?" »

So what is the Resource Super Profits Tax all about?  And what is a resource rent tax anyway? 

As it happens, I did a PhD in economics on these very questions, under the supervision of Professor Ross Garnaut.  And as an economic adviser to Resources and Energy Minister, Senator Peter Walsh in the Hawke Government, I had the opportunity to implement my PhD findings by helping design the Petroleum Resource Rent Tax in 1984.

Let’s start with resource rent.  Minerals like iron ore, coal, oil and gas possess two special features – they are non-renewable and deposits of them vary in quality and closeness to markets.  These features give rise to resource rent.

Continue reading "Going boom: the economic case for the mining tax" »

As someone who has worked as an accountant or financial analyst for most of the last couple of decades, including in the mining sector, I have been watching the debate about the mining resources super profit tax with some bemusement. People like me understand tax and why businesses make – or don’t make – investment decisions. It is becoming disturbingly apparent that ordinary punters are not getting the information they need to make a reasonable assessment about the merits of this proposal.

Frankly, there is a lot of nonsense being talked at present.

Firstly, you can discount almost everything that has been written by journalists, since virtually none of them seem to know anything about business or economics. Most appear to be simply regurgitating other people’s words. I put most business and economics writers into this category, by the way.

Continue reading "An accountant’s view: The nonsense on the mining tax" »

Just when does spin become a lie? Answer – when the overwhelming objective is to deceive.

Harsh? Certainly! True? Most definitely.

Particularly when the advertisements to convey the lie is paid for by theft from the taxpayer ie advertisements to promote the Labour Party’s great big tax on mining, have avoided complying with the advertising guidelines but is none the less paid for by the taxpayer. Bargain at $38 million!

Continue reading "The mining ads are all spin, and the Budget shows it" »

In any decision to invest, wise investors look at three things – the quality of the management of the company you are investing in, their track record, and the underlying numbers.

I also believe it’s the right way to judge a government on its economic performance.  What are the values, culture and philosophy of the team?  What is their record of implementation? And how reliable are the assumptions that underpin the forecasts?

The importance of these questions is that a Budget is only as strong as the team that will implement it.  I’m sure investment analysts would be very suspicious of any company that have had four CEOs in five years and over 200 changes in its senior management team in the same period.  Yet this is the management turnover of the NSW Government.

Continue reading "Would you invest in New South Wales Inc?" »

The numbers have been crunched, the stakeholders consulted; various other horrendous corporate jargon terms have been deployed, and now The Punch is ready to announce the results of a SWOT analysis of the Rudd government’s electoral standing.

With the SWOT being such a common feature of modern workplaces we decided to capture the findings and plot them on a range of horizontal and vertical scales, before looping them back into a synthesised range of go-forward options that would allow Kevin Rudd to build a sustainable advantage and capture sufficient political market share to gain the upper hand come polling day.

Or rather, here’s what Punch readers think Kevin Rudd needs to do: Push Julia Gillard to the forefront, focus on health and the economy, settle the row over the mining tax and run a scare campaign about a “son of WorkChoices” industrial regime.

Continue reading "Economy, Gillard, and fear: How you say Rudd can win" »

Every now and then, a select group from the economic illuminati retire to their monastic study and devise a splendid idea to try and pay off their previous splendid idea.

Splendid idea number one was to borrow so much money that we put ourselves in more strife than the early settlers in our desire to adorn the nation with an eclectic mix of rubbish that apparently was going to save us from Asia ceasing to purchase our minerals. The relationship between our stimulus and mineral exports was as clear as mud, but there was an emphatic defence of this fantastic proposition by Labor.

The Treasury fiddling of the graphs depicting the relationship between our and other nations’ fiscal stimulus packages and the effect on their respective economies shows that when the graphs were corrected the relationship was hardly apparent.

Continue reading "The mining tax: Treasury’s own love formula" »

If 3,250 jobs never existed, can they still be used to batter a government over the head and frighten the bejesus out of mining communities? That’s what Swiss mining giant Xstrata is testing this week.

There’s been much hysteria about Xstrata’s announcement it will suspend and review two Queensland projects. Prime Minister Kevin Rudd fought back, boldly describing Xstrata’s announcement yesterday as ‘passing strange’. Here are some better descriptors: arrogant, cynical, bullying, fear-mongering.

Anyone involved in the mining industry for any length of time knows how to take this kind of announcement from a mining company, with a big grain of salt.

Continue reading "Xstrata is just playing chicken with the Government" »

Home ownership is central to the great Australian dream. A home is not only a means of shelter, but the crucible from which personal development, family relations and community bonds spring forth. For many Australians, it is a tangible way in which they can share in the wealth of the nation.

A decade ago, social researcher, Jeanne Strachan, reflected on an emerging concern about housing: “Young couples today are the first generation since the war to face the reality that they often can’t obtain, even with two full-time workers in the house, what their own parents saw as a fair and reasonable reward for their hard work.”

Strachan observed a growing sense of pessimism about home ownership: “Many young couples have an ingrained belief that it is not ‘right’ to raise children in a rented home. They make a very strong emotional link between the goals of parenthood and home ownership. They recognise that before the birth of their first child they will bath have to work to fulfil their home ownership dream.”

Continue reading "How Labor has made housing more expensive" »

In Rudd Government-speak “hysterical” is the new “denier”, as in the mining industry is “hysterical” over the RSPT the way people who questioned the details of the ETS were climate change “deniers”.

The Rudd team is once again relying on a simplistic argument to sell a highly complex policy, and this time they’ve gone all in.

Tony Abbott keeps saying the coming election will be won and lost on the Resources Super Profits Tax, which for political watchers’ sakes I hope is an overstatement. Certainly there’s no way Rudd can afford to dump it in the same bin as the ETS.

Continue reading "Can Rudd dig himself out of a super mining tax hole?" »