Wayne Swan

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?" »

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" »

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" »

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" »

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." »

The Government is transparently attempting to bore us to death with tax talk as part of this sop to Rob Oakeshott. So far the biggest surprise has been unions and business disagreeing with each other.

It’s safe to assume Prime Minister Julia Gillard would prefer to commit hara kiri with a blunt old pair of Tim Mathieson’s scissors than create more headlines that tie her and tax together, so they’re really hoping to fly under the radar. Treasurer Wayne Swan went so far as to warn any reform would be ‘painstaking’, a ‘slog’. Nothing to see here folks.

Well here at The Punch we think he’s underestimating the appeal of taxes. Look at the shenanigans we saw from the GST, the mining tax, and the carbon tax. Gadzooks, fun times! And while they’re off the cards at the Canberra gabfest, there are plenty of quirky and interesting taxes to talk about. Australia only has around 120 taxes, so there’s room for more. See here, we’ve put together a list for you.

Continue reading "When too much tax is barely enough, here’s some more" »

Christmas is going to be awkward at the Swans’ this year.

And it won’t be an inappropriate gift causing the tension and a possible barney.

It’ll be Labor’s mandatory pre-commitment policy for poker machines.

Continue reading "Little brother’s Big Brother law dumps the local surf club" »

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." »

Global financial markets are going completely bananas. Again.  Financial experts worldwide are calling on leaders for some direct action to bring certainty to the struggling Greek and southern European economies. So what does all this mean for us? Australian treasurer Wayne Swan has described it as a dangerous new phase, while other economists have urged the RBA to take immediate action to avoid being caught up in the recessionary sweep. Eager to find out what all that actually means, The Punch asked Saul Eslake, senior economist at the Grattan Institute to give us the low down.

1. How much could the current crisis affect Australia? How worried should we be?

The current ‘crisis’ reflects (first) the increasing likelihood (as markets see it) that Greece will default on its debts, resulting in losses that may render some banks who hold large amounts of Greek government debt insolvent, and that in the aftermath of a Greek default other countries (Portugal, perhaps Spain or even Italy, the latter two being much larger than Greece) will be more likely to default; and (second) the increasing likelihood that Europe and/or the US may slip into a second recession, in which case governments and central banks would have very little capacity to respond in the normal way (by cutting interest rates or doing fiscal stimulus).

Continue reading "Punch Q&A: GFC #2 and what it means for us" »

In this new era of unsurpassed political skulduggery, mediocrity is the new excellence: In short, pollies are only winning because the competition is falling over.

Wayne Swan, our freshly crowned Most Excellent Treasurer in the Universe, is the latest to accomplish the less-than-Herculean feat of slowly sliding past a tumbling US economy and stumbling EU finance ministers to glide to victory.

Euromoney named Mr Swan overnight, saying his “careful stewardship” had earned him the moniker. In the egg and spoon race of world economies, Mr Swan’s egg remains uncracked.

Continue reading "Last man standing: The Bradburian Theory of Politics" »

In a week’s time, as Finance Ministers and Treasurers from around the world gather in Washington to discuss the economic woes afflicting America and Europe, there will be an important ceremony on the sidelines.

Euromoney, the world’s leading magazine for banking and finance, will present the prestigious Finance Minister of the Year Award.

Each year the award honours the Finance Minister, Treasurer or central bank governor whose key decisions “have directly benefited both the performance and perception of their country’s economic and financial achievements”.

Continue reading "Is Wayne Swan the greatest Treasurer in the world?" »

Here we go again - another bank switching package from Wayne Swan. Has Swan got it right this time? Well, yes and no.

There’s no doubt that Wayne Swan’s recent announcement that bank customers will be allowed to sign a single form to switch banks is well overdue. In reality, Swan could and should have pursued the “one form” approach back in 2008 as we all suspected that bank switching can be as simple as filling in just one form.

Should we be excited about Swan’s latest bank switching package? Well, not just yet. Any excitement needs to be tempered by doubts as to whether the latest reforms are to be extended to small business customers.

Continue reading "The itch to switch is still not easily scratched" »

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" »

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" »

APRIL 8,1974.

My darling Heather, I write to you at a time when I think I’ve never felt worse about politics. The idiots who now run the Liberal Party will drive me right round the bend. Their last move is to deny supply to the present government in the Senate. Now this is something that shocks me.

These words belong to former prime minister and founder of the Liberal Party, Sir RG (Bob) Menzies.  History of course can provide a longer-run assessment of the bunker-busting tactics used to blast Gough Whitlam from office.

But whatever side you come down on, Malcolm Fraser was vindicated winning three subsequent elections (1975, 1977, and 1980, although not the double-D held just weeks after his 1974 missive under Billy Snedden’s leadership).

Continue reading "Retreat and withdraw: Gillard’s new strategy" »

In the general pandemonium surrounding the unveiling of the carbon tax package last week, it was easy to overlook the dodgy little purchase incentive that came as part of the bundle.  Shrink-wrapped to the side of the carbon tax box was something called the Clean Energy Finance Corporation (CEFC).

Behind the feel good name, this new bureaucracy is little more than a $10 billion, off-the-books venture capital fund, underwritten by the taxpayers and created for the sole purpose of providing generous loans and guarantees to highly speculative startups in the renewable energy sector. 

This shonky “Gillard Bank” will involve an unelected board, chosen by Julia Gillard and Bob Brown, picking winners with minimal public scrutiny, no apparent requirement for cost benefit analyses and no apparent tender processes with objective criteria to ensure value for money. In all probability the CEFC will direct funds to projects that conventional financiers wouldn’t touch because they would be deemed too risky. While the actual policy documents are silent on where the $10 billion will come from, Government sources have suggested the money will come from the issue of billions of dollars in government bonds.

Continue reading "Brown Bank: More Jimmy Buffett than Warren Buffett" »

With the debate raging about the carbon tax and whether the initial carbon price of $23 will lead to any meaningful reductions in greenhouse tax emissions, a new front has opened up in the debate concerning the real possibility that businesses will use the carbon tax as an excuse to price gouge.

Price gouging is already a problem in such areas as petrol, airport parking and even groceries. The petrol rip off is now ongoing in many regional areas and even in the city average petrol prices do not come down as quickly as they should when there are falls in the Singapore benchmark price used to calculate local prices.

Airport parking rates keep going up and visitors to major airports are held hostage to the monopoly power of the airport owners who get nasty with parking infringements if you dare to pick up a loved one from the “wrong” area.

Continue reading "We need CarbonWatch to stop price gouging" »

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" »

You can list things that “satisfy” on one hand. Snickers bars, finishing a crossword, running a half-marathon after months of training. Your first drink on a Friday afternoon, weekends…

But no matter who you are, and what you earn, “salary” will never fall into this category. Money in the hand, is by definition, money to burn; and for this reason, you can never earn enough.

Strange then, that researchers at the Household Income and Labour Dynamics Association think it’s perfectly reasonable to have come up with a figure that suggests otherwise.

Continue reading "We’re never happy, no matter how much we earn" »

For all its flaws, there is one thing this Labor Government can be proud of – a cohesive ability to ignore the reality of its spending addiction. 

I applaud every Labor Member of Parliament who has successfully stood in front of a camera and said with a straight face that Wayne Swan is a good economic manager. 

It must be tough, because a close look at the Budget’s spending column clearly proves otherwise. 

Continue reading "It’s about the spending, stupid" »

Feel like your life lacks dignity, meaning and social inclusion?

The solution is easy. Simply take one full-time job and do it. All your problems – especially those stubborn, low self-esteem issues – will be solved in one fell swoop.

This is the rhetoric accompanying new, “tough love” Budget measures aimed at shifting single mothers and disability pensioners off welfare and into work.

Continue reading "Employment may not work for everyone" »

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" »

Let us first consider what Wayne Maxwell Swan said on the 10th of March 2009. He stated that “the emerging economies of China and India are now expected to slow markedly”. Because of this, Wayne Maxwell Swan stated “it will be necessary to increase Government borrowing”.

The result was Wayne Maxwell Swan increased by $125 billion the amount able to be borrowed by reason of the Commonwealth Inscribed Stock Act 1911 and the Loans and Securities Act 1919. This resulted in the nation’s credit card having a $200 billion limit.

Now as we know, China did not go into recession so neither did we, in fact China hardly missed a beat but Australia has now gained the ignominy clearly spelt out by Dr Ken Rogoff of Harvard when he noted the countries with the greatest cumulative increase in real public debt since 2007.

Continue reading "Let’s take a closer look at our spiralling national debt…" »

In sport, teams go to great lengths to paint themselves as the underdog. It’s a tired old tactic designed to lull the other team into unwittingly going a bit easier on them, and it rarely works.

The same principle has been eagerly adopted by families in the wake of this week’s budget, and the decision to freeze the indexing of family payments to families earning in excess of $150,000. And to some extent, the tactic appears to be working.

The logic of families at or just above the $150k threshold is pretty simple, and can be loosely summarised like this: We’re not rich. In fact, we’re struggling to get ahead. Gimme gimme gimme!

Continue reading "We’re not rich, we’re battling middle class welfare addicts" »

You might have picked up a theme in Wayne Swan’s fourth budget. It was tough. How do we know this? Because the government told us so.

In a major pre-budget speech, Treasurer Wayne Swan said “tough decisions are required” and “this will be a tough Budget.” Finance Minister Penny Wong, in an interview in the lead up to the budget, used the word “tough” more than ten times, including four times in one answer.

But did the reality match the rhetoric? In his budget speech, Swan announced $22 billion in “savings” over the next four years. Yet much of those so-called savings are actually tax increases like the flood levy, and regardless, they have been almost completely offset by increased spending in other areas. They’ve been roundly criticised already for failing to deliver a tough budget.

Continue reading "That’s not a tough budget - this is a tough budget" »

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" »

Well, it’s the morning after the night before! What’s your assessment of the Budget? Too tough? Not tough enough? Who missed out?

Weeks of drip-fed leaks failed to elicit much excitement about this budget, as Australia collectively rolled its eyeballs at the now-traditional claims that this was going to be the toughest of tough budgets. The general consensus seems to be that it could have gone further, pushed through some serious reforms, and Australia would’ve had some respect for it - instead of just pitying the poor thing.

Anyhoo, for all the latest news, head to news.com.au, where there’ll be graphs and experts and analysis and blogs, the budget speech video, and all sorts of goodness.

Continue reading "Budget 2011: Brickbats and bouquets" »

As we wait for Wayne Swan to announce his fourth budget deficit, here’s a small preview of what to expect. Warning:  the following contains plot spoilers.

Wayne will claim credit for the work of others, ignore his record and point to promises not achievements

Wayne Swan will try to take credit for outcomes built on economic reforms that he had nothing to do with, and in many cases opposed.

Continue reading "Spoiler alert: Here’s what to expect in the budget" »

There’s a certain irony that a Government proud of an unemployment rate with a “four in front of it’’ is obsessed with work in this Budget.

“If you ask me what it’s about, it’s really about jobs, job, jobs,’’ Mr Swan told The Punch this week.

Such sentiments would have been unremarkable from treasurers past as they wrestled with deep recessions and accompanying jobless numbers in the double figures.

Continue reading "Budget 2011: It’s all about the jobs, jobs, jobs" »

BREAKING NEWS, SUNDAY 7PM. The Taipans beat the New Zealand Breakers in double overtime. We’re off to NZ to settle this one, folks. Well done to Fairsfair and all the other Taipans supporters - Punch eds

The Brown Snake and the Swan. One is venomous, dangerous and as the old saying goes more scared of you, than you are of it. The other is the namesake of the Australian professional Basketball team, representing the regional city of Cairns. Both are fighting to remain relevant this weekend.

Today is Easter Sunday, Resurrection Day, the day Jesus rose from the dead. It is a day of celebration.

The Easter Bunny has been but as we are busy gorging ourselves on chocolaty goodness, some can not relax. This afternoon in this great far northern city, our National Basketball League representatives the Cairns Taipans take on the New Zealand Breakers, at home. Oh and he who never stops, the Nation’s Treasurer and Acting PM is here too.

Continue reading "Lame Swan strays into Taipan territory" »

Pssst – want to make an easy ten grand?

Believers in the science of global warming, you now have the chance to spread the word and at the same time make yourself $10,000 richer.

This has to be really simple, as almost everyone from PM Julia Gillard down, including much of our mainstream media, has been telling us it’s a fact - the science says so, anybody who thinks otherwise is a fringe-dwelling extremist, a denier who won’t accept the evidence and doesn’t deserve to be heard.

Continue reading "REWARD: Take the climate change challenge" »

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" »

Well, well, some politicians never cease to amaze us. Just when you thought all was lost with competition law and practice in this country, we have Wayne Swan standing up last week for a more competitive market place by prohibiting the acquisition of ASX Limited (ASX) by Singapore Exchange Limited (SGX).

That was very good decision and needs to be applauded. Now ,Swan has let the side down in the past by allowing bank mergers to go ahead - thereby destroying competition in the banking sector. But on the ASX and SGX deal he certainly did the right thing.

Of course, big end of town interests and their advisers and other supporters will criticise Swan, but such criticism needs to be dismissed for the simple reason that those big end of town supporters have an obvious vested interest in more mergers and acquisitions.

Continue reading "Lower prices mean a cosy club with fewer players" »

Have you had a close look at Wayne Swan’s December 2010 bank package? Don’t worry if you haven’t yet as you haven’t missed much.

For those who have, it’s clear that it’s so light handed and minimalist that the big banks aren’t bothered by it. In fact, the big banks have even told the Senate banking inquiry that they actually like aspects of the package.

So much for Swan’s tough talk regarding the big banks. Given how much of a fizzer the package will be, one has to wonder if Swan’s announcement was more about being seen to be “doing something” in response to the public anger towards the big banks.

Continue reading "Swan’s bank package is a fizzer" »

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?" »

As the public anger against the four big banks continues, we wait with an air of expectation for Wayne Swan’s latest bank “reform” package to be announced.

This is not Swan’s first “reform” package. He announced one before and while some may have been excited about that earlier package, any excitement quickly faded as that package fizzled and the four big banks continued to thumb their nose at the Federal Treasurer.

Until independent competition and the conditions that allow independent competition to flourish are restored, consumers will continue to be gouged by the four big banks. Here’s a 12 point plan that might help provide a coordinated and targeted approach to the restoration of independent competition.

Continue reading "12 things Wayne Swan can do to tackle the Big 4 banks" »

Prime Minister Gillard is reportedly angry over the latest bank interest rate rise but people expect action rather than emotion from their government.

Wayne Swan has been angry with the banks on more than 30 occasions over the past three years but that hasn’t stopped them from raising interest rates by more than the Reserve Bank. This almost never happened under John Howard and Peter Costello and is a sign that the current government isn’t taken seriously as an economic manager.

Seven interest rate rises in the past year have added more than $500 a month to the repayments on an average mortgage.

Continue reading "Julia and Wayne are very angry, but what will they do?" »

As the four big banks continue to act as a law unto themselves it’s time for Wayne Swan to match the tough talk with tough action, especially in relation to our competition laws.

We have some of the weakest competition laws in the world and that’s why we’re now in this mess with the four big banks.

The simple reality is that Wayne Swan and the ACCC have allowed the four major banks to get as big as they. The ACCC and, ultimately Swan failed to stop Westpac from taking over St George and that was after years of failing to stop the four big banks from taking over the smaller banks.

Continue reading "How Swan can actually make the banks pay" »

Two weeks ago I decided to take a public stand on behalf of ordinary Australians. Home buyers, consumers and small business are sick and tired of being taken for a ride by the banks, who time and time again increase their interest rates above and beyond the official movements of the Reserve Bank.

I’ve had my critics - but if that means I’m standing up to a guy who earns $50,000 a day, while the customers who underwrite his business earn $50,000 a year – then I’ll cop it.

A strong banking sector is vital, but at the same time banks have an obligation to give something back to the community.

Continue reading "Hey Wayne, are you still laughing about bank reform?" »

This time yesterday Australians were merrily preparing for the Race that Stops the Nation, confident in the economists’ predictions the RBA would avoid the un-sportsmanlike act of hiking interest rates on Cup Day.

Just 24-hours later all hell has broken loose.

The RBA might have turned on the rates tap with its 25 basis points rise in official interest rates announced at 2.30 yesterday afternoon, but the Commonwealth Bank forced open the flood gates with an immediate move to put its own rates up 45 basis points.

Commbank boss Ralph Norris is not talking this morning, instead letting the Australian Bankers Association make the running.

Association chief executive Stephen Munchenberg said: “What the Commonwealth Bank is saying is that that marginal effect has built up 2 basis points or 0.2 per cent each month, and that’s now built up over nearly a year since the banks last moved interest rates, so there’s a cumulative effect there.”

Westpac just announced its profits have risen 84 per cent in the last 12 months. Yes, that wasn’t a typo - 84 per cent. In the 12 months to September 30 the Gail Kelly-steered Westpac made a net profit of $6.346 billion.

Apparently Kelly is due to make an announcement later today. Wonder what on earth that could be.

Continue reading "What a bunch of bankers" »

Our major banks are not like other businesses.

If a boat builder in Taren Point, or a plastics manufacturer in Chipping Norton or a motel owner on the Central Coast of NSW gets into trouble, there will be no taxpayer bail out. There will be no funding guarantee to support their continued access to credit. There will be no Reserve Bank to act as their own on-call lender of last resort to see them through their troubles.

The GFC proved that our four big banks are too important to fail. They know it and the taxpayers know it. The banks may be a legitimately protected species, but that does not give them a license to be precious, striking out at anyone who would dare raise questions about how they do business.

Continue reading "Banks can complain all they want but Hockey’s right" »

Attempting to make political capital out of interest rates is a risky business. It’s so tempting for both governments and oppositions to have a go at it, but invariably it ends up like some kind of disastrous military quagmire from which you must make a humiliating retreat.

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Joe Hockey’s demands that the Government step in to stop banks raising interest rates above the levels set by the Reserve Bank is a big and risky play. He could ask his former Prime Minister John Howard about its dangers. Howard’s famous statement that “interest rates would always be lower under a Coalition Government” came back to bite him in 2007 when rates rose right in the middle of an election campaign. 

Hockey has been immediately embarrassed by the reaction of one Liberal MP to the prospect. Liberal MP Don Randall was asked about idea this morning, and not knowing it came from Hockey said this:

Continue reading "Hockey’s big dangerous play on interest rates" »

Joe Hockey’s made what Sir Humphrey might call a “courageous” move in his calls for the Government to heavy the banks over interest rates. We imagine the dixers to Treasurer Wayne Swan will flow pretty thick and fast this Question Time. Join us from 2pm for live coverage.

If the worst of the global financial crisis is behind us and Wayne Swan’s bank deposit guarantee no longer exists, why are many Australians still fighting with investment firms over frozen funds which have been locked away for almost two years? 

The government’s bank deposit guarantee, introduced at the height of the financial crisis, was meant to stabilise financial markets and restore the flow of credit.  It covered all deposits of banks but excluded investment funds.  This triggered a lockdown of deposits in investment funds and left hundreds of thousands of Australians in the lurch. 

When the government decided to remove the bank deposit guarantee in March this year, sighting improved conditions in the banking sector, many expected it to facilitate the release of frozen funds, particularly those smaller funds held by ordinary Australians.  This decision was a sign and an expectation that things would start to return to normal. 

Continue reading "Give me my money back" »

The likelihood of interest rates rising is back on the agenda, following explicit warnings from the Reserve Bank that it is considering the need for tighter monetary policy.

The Coalition has consistently warned that the Labor Government’s heavy borrowing and build up of debt will put upward pressure on interest rates.

These warnings have been rejected by the government and by a few select commentators in the media.

Continue reading "Big spending equals big rates - no buts about it" »

In an election campaign marked by both sides saying as little as possible about tax reform, yesterday’s National Press Club showdown continued the pattern of inertia.

Treasurer Wayne Swan and Opposition spokesman Joe Hockey talked about stimulus packages, waste and costings. They talked around tax reform. They mostly avoided talking directly about it.

Coalition leader Tony Abbott had already flagged that a Coalition Government would re-visit the Henry Review, with a view to announcing a plan within a year. That’s just a plan for a plan.

Continue reading "Both the Coalition and Labor are bottling it on tax reform" »

The Treasurers debate in Canberra today was a good one by the standards of these ministerial rumbles.

It was also worthwhile watching because it reminds us there is a pretty important economic debate in this election that has largely been overshadowed by the Labor leadership hoopla.

Prior to Labor’s knifing of Kevin Rudd and its back down on the mining tax, this election was one that was set almost solely to be about tax. Now, despite the best efforts of the Coalition and smaller miners, the mining tax has largely been neutralised as an issue.

Continue reading "Remember the economy stupids?" »

Do you know that we have an ACCC Petrol Commissioner? If so, do you know the person’s name and what he does?

Why are these questions important? Well, simply because you as taxpayers should know that the Federal Government is using your money to employ a person who was, according to the Federal Treasurer Wayne Swan, going to be your “Petrol cop on the beat.”

When we talk of “cops on the beat” we tend to think of high visibility, deterrence and powers of arrest. On each of these criteria you need to wonder how the so-called “Petrol cop on the beat” rates?

Continue reading "This town ain’t big enough for two petrol sheriffs" »

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" »

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" »

The big question on everybody’s lips right now is whether Prime Minister Gillard will be any different to her predecessor Kevin Rudd. But it’s difficult to see how Julia Gillard can legitimately claim to be different unless she adopts a completely different approach to running the national economy.

So it seems passing strange that she has decided to keep the architect and principal manager of the economy, Wayne Swan, on as treasurer. And stranger still that he has been promoted to deputy prime minister.

Notwithstanding Kevin Rudd’s faults as Prime Minister – and there were many – Wayne Swan’s failings as Treasurer are equally appalling.

Continue reading "Gillard and Swan are failures, not leaders" »

As speculation mounts that ousted Prime Minister Kevin Rudd will become the new Foreign Minister, is there a better role out there for him in the world?

Kevin Rudd was known for appointing politicians of both sides to important positions overseas.

He shipped former Opposition Leader Brendan Nelson off to Brussels as an Ambassador when he was discarded as Opposition Leader. At the same time Kim Beazley who he knocked off as leader was predictably sent packing for the plum job in Washington.

Continue reading "What in the world can Kevin Rudd do now?" »

Lindsay Tanner was just on AM and made an observation so obvious it was almost funny. He said people only complain about the consultation process when they don’t like the outcome.

That might explain why people in the ALP are now complaining that Kevin Rudd and Wayne Swan came up with the Resources Super Profits Tax all on their own, without even consulting the other half of the so-called “kitchen cabinet”, Tanner, and Julia Gillard.

Tanner denied the claims, saying as Finance Minister he’s a key part of the Budget process, but he did stop short of asserting anyone else in Rudd’s increasingly invisible cabinet was brought into the loop. If Rudd and Swan were responsible for formulating the RSPT, their back bench is now holding them responsible for stopping the bleeding it’s caused.

Continue reading "Campaign countdown: Just fix it Kevin and Wayne" »

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" »

It is increasingly apparent that Australia’s well developed cultural bias towards egalitarianism is part of the leverage that the Rudd Government will seek to exploit to ensure its re-election this year.

Since 2007 Mr Rudd and Mr Swan have regularly gone out of their way to promote that they are some sort of modern day Robin Hoods. This carefully crafted illusion has been built around the idea that by taxing the “rich” we can somehow pay for a Mount Everest of around $93 billion of debt, racked up in reckless cash splashes and handed out on sometimes completely illogical grounds.

Now the Rudd Government tells us that we need to increase tax by 40 per cent on the most productive sector of our economy. They argue this is a “Robin Hood style” redistribution of wealth that will make us all richer.

Continue reading "Rudd, Swan and the myth of Robin Hood" »

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?" »

The genius who first used the word “super” to describe the mining profits targeted by the Rudd government in its plan to return the budget to surplus should be given a promotion and a pay rise. Then the government should go out and hire another half dozen people with a similar flair for plain language.

The Resources Super Profits Tax is a rare example of a self-explanatory policy. It not only accurately describes the nature and spirit of the plan, but is infused with political clout. The underlying message is that “super profits” are somehow morally objectionable, compared to the regular kind. The National Health and Hospitals Network, by contrast, is a vague umbrella term for some health reforms.

But just how rare it is to find clarity in government communication is evident from the federal Budget. It is, as usual, filled with technocratic babble. Things aren’t bought, they are procured. Programs don’t end or stop, they are terminated. There is never a cut, but funding is reduced.

Continue reading "The one super phrase in a budget full of babble" »

As all the cool kids got themselves in a lather over last night’s budget I noticed a distinct void in the chatter.  Where were the mums and dads? Turns out that lots of them were watching Masterchef (possibly the people’s new opium) - studiously avoiding the budget telecast.

Political apathy seemed to be the flavour of the day, plated up and served with a side of Couldn’t Give a Shit.

Was it the fault of the no-frills budget? Or have we lost faith in a government which once seemed to promise so much?

Continue reading "Boring, unsexy: Who’d rather watch MasterChef?" »

Ignore the pre-budget spin and the denials to the contrary. The document unveiled by Wayne Swan tonight is every inch a pre-election budget, just not in the traditional sense of the word.

It has none of the handouts and give-aways traditionally used to entice voters in an election year – there’s no money left to pay for that kind of extravagance anyway, and there are plenty of niggly little cuts to offset the impact of the stimulus splurge.

But this budget provides a clear rhetorical blueprint for the looming election campaign. And it’s framed around a sense of pride, almost cockiness, at the performance of the Australian economy versus the rest of the western world.

Continue reading "The smartest guys in the room" »

4pm: Wrapping up. Following Question Time and other incidents during the day, we’ve seen the opposition is going to query the assumptions that the government has made in the Budget, but also question if the Prime Minister can be trusted to maintain spending discipline. (Tony Abbott asked him today to explain why he only became an economic conservative at election time.) For its part the Government wants to know where the opposition will find savings to return the budget to surplus, and will be hammering the line that Australia has outperformed the rest of the developed world in handling the GFC.

Boring budget papers maybe, but not a boring Budget.

12.34pm: Question Time is back and now that we’ve been freed from the clutches of Treasury officials we’ll be covering Parliament proceedings live from 2pm today. Be there and be square.

12.24pm: Scientists found it boring too! No mistaking the take from Australian Life Scientist, which has a story headlined Budget 2010: Not much for science or biotech.

12.03pm:From ABC News:

Federal Treasurer Wayne Swan has disputed claims by Premier Anna Bligh the super-profits mining tax will adversely affect job creation in Queensland.

More here.

10.08am: You say tomato…

Read the stories here: Hockey, Rudd.

9.58am: No backdown, says Swan.

9.52am: Chinese news agency Xinhua focuses on spending on troops in Afghanistan. What, no mention of the mining tax?

9.15am: Some commentary highlights from around the blocks:

Paul Kelly in The Australian: Accounts deliver an election narrative

Swan was correct in his budget night boast that he wanted a set of numbers that made Australia “the envy of the world in recovery”. It is an arrow in the heart of the Coalition’s debt and deficits election theme.

Barrie Cassidy at The Drum: Nothing wrong with a boring budget

The trick will be in the marketing. This was one of the tightest spending budgets in a generation - certainly the tightest pre-election budget. Presumably not a lot was wasted on speech writers.

John Durie, The Australian - Canberra backs corporate bonds

In some respects it’s a business-friendly budget if you ignore the super tax on the resources industry.

Peter Hartcher in the SMH: Back in the black with a touch of restraint

The truth is that the natural recovery in the economy has done all the hard work for the Rudd government. Its attempts at cutting spending are embarrassingly feeble. From total outlays of more than one-third of a trillion dollars, it has cut spending by just $1.4 billion.

9.05am: Shadow treasurer Joe Hockey has a video statement giving his verdict, characterising the Budget as “a shameless con”.

9.03am: High praise from David Koch:

THE wimps of 10 days ago have found some courage.

This is exactly the type of Federal Budget we needed and, if they can pull off what they’ve promised, it will ease the pressure on future interest rate increases and keep inflation under control.

More here: Budget 2010: Government finds some courage

8.18am: Tony Abbott says the government can’t “change it’s nature from Paris Hilton to Uncle Scrooge”, arguing it is a big ask for voters to believe Rudd can now put the brakes on spending. And here’s a picture.

8.14am: Rudd’s been on the phone to the new British PM David Cameron. They’ve been talking about Cameron coming out, perhaps during the cricket. We’ve got more on the new British PM here.

8.08am: Kevin Rudd on ABC Radio, outlining his economic beliefs. Says he believes in expanding the role of government in the economy when the private sector is in retreat. “Now with the private sector expanding it’s time for the role of government to retreat,” he says. He mentions getting back in the black.

Penbo mentioned in his piece The Smartest Guys in the Room that Swan and Rudd might have been listening to Queen’s We Are The Champions when putting the finishing touches to the Budget. This might also have been on high rotation:

6.57am: Treasurer Wayne Swan will be taking questions live at the Herald Sun online from 10am AEDT here.

Continue reading "Budget 2010: Rolling reaction blog" »

It was never going to be a bread-and-circuses affair but Wayne Swan’s third budget offers a little showbag of policy trinkets everyone gets to keep.

Just like the rise in cigarette tax, they are the kind of concrete changes that can make a government a real talking point in offices and over dinner tables. While not multi-billion-dollar headline initiatives, they offer voters little improvements that are, it has to be said, broadly agreeable.

First is the eHealth initiative. If you sign up it will put an end to the usual round of 20 questions about your medical history any time you see a new doctor. It’s totally optional and you can manage it yourself, so there’s little ground for the typical privacy objections raised against this kind of initiative.

Continue reading "For families, the little things count in this budget" »

So Kevin and Wayne have found themselves in another precarious position. The latest two polls show Kevin is about as popular as ugg boots in Darwin. The election is so close that even that sweaty, bike riding wing-nut Tony Abbott could win the thing.

The Budget will be delivered tonight and the Treasurer has suggested that this will be a no frills budget with no election year spending to win votes, but hey, it’s already been the year of the political back flip and desperate times call for desperate measures.

I’m sure that the Prime Minister and the Treasurer got together yesterday to thrash out what they could possibly come up with to stimulate the polling. Never mind stimulating the economy, it’s the voting that needs vigorous stimulation.

Continue reading "Yo Kev, where’s my free swimming pool?" »

Well, I hope you all feel comfortable that you now owe $140 billion. If you take our population as approximately 22 million, that means you owe in excess of $6300 for each man, woman and child in Australia.

I will keep talking about debt until people realise the dangerous position it puts us in. We are borrowing in excess of $1 billion each week. We see every night on the news the problems of other countries that have not dealt with their debt but have waited for the inevitable when the debt deals with you. How could we be so foolish as a nation to be mounting up debt the way we are?

Then, to all intents and purposes, nationalise half of the sector of our economy which has actually kept us from the jaws of recession – the mining sector. This is something that would be more appropriate for Hugo Chavez or Evo Morales or Castro in Cuba. Australia hasn’t experienced this sort of insanity since the failed approach by the Labor party when they decided to nationalise the banking industry in 1949.

Continue reading "‘Til debt do tear us apart" »

After two years in the making and after sitting on the thing for almost 5 months we finally have the Rudd Government response to the Henry Review: tax the hell out of mining companies.

The Rudd Government’s revolutionary proposal following the release of the Henry Tax Review yesterday is pretty astounding in its lack of vision.

It’s not so much a “root and branch” overhaul of the tax system as it is a rocks and dirt one.

Continue reading "No hooray for Henry" »

The mining sector might have protected us from the harshest winds of the Global Financial Crisis, but according to Kevin Rudd and Wayne Swan it’s no longer just making profits - it’s making “super profits”.

Ergo, these “super profits” can be “super taxed”.

It’s hard to argue with a “super” anything in a rhetorical war, which the Government is well and truly waging right now with the Opposition. By creating the narrative that the miners are so far in the black they qualify for a whole new category all of their own, it’s easier to gouge them.

Continue reading "Rudd’s created a “super” enemy, Abbott’s got a GBNT*" »

The Henry Tax Review has been released and the Rudd Government has formed its response. So what good things has the government done for the average Australian family? Not a great deal.

I know it’s a brash statement but when you think about it, the Henry Review is some 800 pages long, looking at things like housing affordability, childcare and family assistance. These are the things which families really care about because they are the biggest items which chew into the family budget and affect whether they have any spare cash or not.

But were any of these things mentioned in the Rudd Government’s response to the review which it’s been sitting on for months? The short answer is no.

Continue reading "Henry: By going after the big guys, little guys will get hurt" »

Four months after the federal government received Ken Henry’s recommendations for tax reform we still don’t have a clear indication of what that reform might look like.

While the Henry Review unquestionably provides a long term agenda for reform, overall the lack of intent and guidance around the government’s thinking is frustrating.

There is no doubt that Australia needs a simpler, more efficient taxation system.

Continue reading "Henry did his job, but Rudd’s hardly gone near it" »

We’ll chart the reaction to the Henry tax review and the government’s response here as it unfolds. All times are AEST. Refresh the page for updates.

2:30 Live blog on the Daily Telegraph now with leading accountant Anthony Bell.

2:00 Wayne Swan’s interview on 2GB this morning has ended in a clash with 2GB host Ray Hadley listen here.

11:00 The Australian is reporting that Treasurer Wayne Swan has left the door open to adopting more review recommendations in the federal budget next week.

10.25am: The miners have copped it on the share market this morning. According to AAP on opening this morning: BHP Billiton was down $1.50, or 3.68 per cent, at $39.25 while Rio Tinto was down $3.79, or 5.26 per cent, at $68.31. Fortescue Metals Group fell 18 cents or 3.93 per cent, at $4.40 and gold miner Newcrest slipped $1.13, or 3.41 per cent, to $31.96.

10.22am: Joe Hockey’s on Brisbane radio 4BC right now. You can listen here.

10.05am: South Australian treasurer Kevin Foley reckons it’s a win for the mining companies. His comments are here on AdelaideNow.

9.49am: From ABC reporter Simon Cullen on Twitter: “Abbott says Rudd’s tax response is a bit of “political jiggery-pokery”... not sure how to spell that one…”

9.42am: Wayne Swan will be taking questions from readers in a live online Q&A at the Herald Sun this morning from 10am here.

9.41am: Kevin Rudd’s going to march this morning in the Brisbane Labour Day parade. Am guessing he won’t want to get too close to the guys from the CFMEU.

9.18am: Choice reader comment from Adam:

I can see Swan reading the report…
Blah Blah Blah. Wow, mining can be taxed into oblivion. Thanks Henry.
Henry: What about the rest?
Swan: The what?

8.56am: More from Kochie ... the Sunrise host has been calling the government’s response “wimpy”. In a column for News Ltd papers today he elaborates on his view.

I suppose we should have all known this would happen. This was meant to be the tax version of the 2020 Summit. Nothing has come of that either.

8.54am: What the nation is reading... Well, it’s early days yet, ultimately it means very little and the Henry review wash-up will no doubt build interest as the day unfolds. But still, at The Australian:

and at news.com.au:

We’re on this story too: Punch fashion writer Nedahl Stelio has our coverage of the Logies red carpet here.

Continue reading "Live blog: Reaction to the Henry review as it happens" »

Spare a thought for Wayne Swan and Lindsay Tanner as they ferret away on Labor’s pre-election budget. At a time when they should be doling out the goodies, the public is telling them it’s time to stop spending our money.

The last few years have been a good time to be in control of the Treasury coffers – after all a successful economic rescue plan based on giving people money while interest rates remained low was sure to meet with public acclaim.

But now the party is coming to an end and the pressure is on to rein spending without causing an uproar in core Labor constituencies. As this week’s Essential Report

shows, the answer may lie in giving closer scrutiny to the Defence budget.

Continue reading "Now for Kevin and Wayne’s excellent budget adventure" »

In conventional Wayne Swan fashion, he was triumphant as he unveiled Treasury’s stern rebuttal of Frontier Economics research report into an alternative emissions trading scheme.

Given the Rudd Government’s deeply flawed Carbon Pollution Reduction Scheme, the Coalition had commissioned the report in order to inform discussions about a better carbon trading scheme. But yesterday Mr Swan informed reporters that a $3.2 billion hole had been found in Frontier’s alternative by the Treasury Department.

So where is the modelling? Mr Swan has refused to release it and until he does, Treasury’s alleged rebuttal amounts to zip.

Continue reading "Hey Wayne, show me the money problem with our ETS" »

Wayne Swan went on the front foot this afternoon in response to the 0.25 per centage point interest rate rise the RBA has just announced.

Before Joe Hockey could race to the back of the NSW Parliament to accuse the Government of being responsible for the rise, Mr Swan predicted he and Malcolm Turnbull would try to pin it on him and the Prime Minister.

“Never forget that if the Liberal Party has their way Australia would be in recession right now,’’ Mr Swan said. ``For the Liberal Party to claim now that interest rates can stay at record lows is simply laughable and demonstrates their lack of any economic credibility whatsoever.”

Continue reading "Interest rates: who’s to blame?" »

What a lovely recession we’re having. Or not having.

This morning’s GDP numbers were supposed to reveal the recession was a close run thing, with only a handful of flat-screen TVs and school gyms keeping the economy going in the right direction.

But 0.6 per cent growth in one quarter would be pretty tidy in a normal year, let alone the year after the greatest global financial meltdown in generations.

Continue reading "What Recession?" »

One of the most exciting periods in politics for a long time began on Friday the 19th of June when little-known Treasury official Godwin Grech turned up for a Senate inquiry into the Ozcar affair. His sensational testimony led to him being chased through Parliament House. He was followed into a lift and to his car by a horde of media.

It was the start of a frenzied week in politics, when the news from Parliament House was interesting again, and Question Time became the best show in town. It swung wildly from Opposition Leader Malcolm Turnbull calling for Kevin Rudd to resign to the Liberal leader being under all the pressure.

The first photo is of Treasury official Godwin Grech under pressure and showing it in the Senate inquiry. When he was giving his evidence there was a crackling in the air – you knew it would be an all-in when he left the room.

I was one of the first into the lift and a bunch of others piled in. Others were much closer to his face, but by reaching up and shoot downwards I was able to capture the swarm of media around him.

Continue reading "Utegate photos: capturing a political crisis on camera" »

THE biggest casualty in the Utegate fiasco has not been Malcolm Turnbull or Kevin Rudd or Wayne Swan or the oddly-named Godwin Grech, whose unusual handle meant he was almost pre-ordained to wind up as a bit player in some low-rent antipodean rehash of a John Grisham thriller.

The biggest casualty has been the taxpaying, voting public, which has watched the nation’s political leadership descend into an orgy of ludicrous name-calling, one-upmanship and abuse.

[Note: There’s some proper ute-related action in this YouTube vid.]

The allegations at the centre of the Utegate affair were deeply serious. As such, it’s a bit rich to declare boldly that any discussion of the affair was, of itself, a waste of time. It wasn’t a waste of time at all.

Continue reading "Memo MPs: the public has had a gutful of Utegate" »

8.52pm: That’s a wrap. What a day. That was possibly one of the best episodes of the 7.30 Report ever tonight - Rudd’s line about a “garden variety making-things-up” was a classic.

Thanks to all of you who contributed during the day, particularly to the live coverage of a brutal couple of hours in Parliament. There were well over 1000 comments from readers - you can replay it below. A couple of closing comments:

• Confirmation the email was a fake casts last Friday’s Senate hearing in a different light. Liberal Senator Eric Abetz appeared to be quoting the email when he questioned Godwin Grech. It now seems possible one or both of them knew, or suspected, it was a forgery. And we should ask again why Grech’s superior, David Martine, interfered with the questioning of Senators on certain details.
• Wayne Swan shouldn’t be off the hook. There remains a straightforward question over whether he misled Parliament when answering questions about a mate of the Prime Minister. After the extraordinary theatre in Canberra today it’s easy to lose sight of this. I suppose the question is whether the crippling blow landed on the Opposition today will hobble it for the rest of the fight.

Looking forward to the papers in the morning.

7.08pm Evening news roundup, and Kochie in Canberra. On the Nine Network, Laurie Oakes says Malcolm Turnbull has egg on his face. Rudd joined Peter Overton outside Parliament House for a stand-up interview. He said he had “absolute confidence in the Treasurer”, adding that he had helped “many many many” car dealers. At the end he said Liberal Party elders should tell Turnbull to go.

I would call upon the senior people of the Liberal Party, the experienced hands of the Liberal Party - Mr Costello, Brendan Nelson, Senator Minchin - to tap Mr Turnbull on the shoulder and say it is time to go.

Seven’s news was headed “Turnbull in Turmoil” and had some of the great grabs from today, to wit:

Albanese: “Bring it on”.
Turnbull: “He has lied to this House.”
Hockey: “Have you got something to say Prime Minister? Have you got something to say?”
Rudd: “Be man enough to apologise and resign.”

Seven’s verdict: Swan has explaining to do, but Turnbull’s fighting hardest for his political life.

Something to look forward to tomorrow is Kochie with the utegate latest from Parliament House. As Anthony Albanese might say, bring it on.

5.11pm: Turnbull’s former adviser speaks to the Herald Sun. Excerpts:

A FORMER adviser to Malcolm Turnbull has denied involvement with the email at the centre of the Ute-gate affair…

... There is no suggestion that Mr Lindwall - a former staffer to both Peter Costello and Mr Turnbull -has engaged in any wrongdoing, but it is understood the Australian Federal Police want to speak with him to determine his involvement, if any, in the affair.

Late today Mr Lindwall told heraldsun.com.au he had nothing to do with the fake email.

“I don’t know anything about the email, I can tell you that,” he said.

Mr Lindwall admitted to knowing Mr Grech, adding: “I used to work in Treasury, anyone who worked in Treasury would know Godwin.”

Read the full story here.

5.02pm: Twittermania - Tweeters have been piling in all afternoon with comments on “utegate”. See the stream of utegate comments here.

Continue reading "Live blogging utegate: Showdown in Canberra" »

The OzCar scandal, or utegate if you prefer, involves Australia’s three most senior politicians - Prime Minister Kevin Rudd, Treasurer Wayne Swan, and Opposition Leader Malcolm Turnbull. Below is a summary of what each is accused of and how it affects them.

Continue reading "Utegate explained: This is not just about an email or a ute" »

Highlights from this morning’s newspapers of the coverage of the utegate affair. See how the various titles around the country report and analyse the utegate crisis ahead of today’s showdown in Canberra.

Continue reading "Utegate reading round-up" »

Kevin Rudd might think that momentum has swung back his way in the Utegate scandal with the email implicating him and his office looking almost certainly like a fake.

For the PM to have referred himself and his office to the Auditor-General, and to have gone one further and called in the AFP, are the actions of a man who is confident that the continuing sweeps of his email system will not throw up any nasty surprises.

But the more the ALP goes on about the fake email, the more obvious it becomes that it’s the only email the Government wants to talk about - because the others are so damning of Treasurer Wayne Swan, whose conduct has conveniently not been included in the terms of reference for the Auditor-General’s investigation.

Continue reading "Rudd and Swan in quagmire of their own making" »

We knew something was up when the party pies ran out. There was a whiff of the end of times that the cheap percolated coffee couldn’t quite hide.

And so it came to pass. The state Budget lock up was no more.

South Australia – first state to give women the vote, to ban plastic bags and forbid groups of people who ride motorcycles from hanging out together, has now become the first state to lose the lock up.

Continue reading "Fun it may be, but locking up journos is pointless" »

LIKE darning socks, car-pooling and drinking instant coffee, bank bashing went out of favour when we were all getting rich during “the great neo-liberal experiment”. Now, from the top office in the land down, this wholesome pursuit is making a comeback.

It’s not that the banks ever lost their talent for bastardry. It’s just that for a decade or so it has been suppressed by competition – from the likes of Aussie and Wizard – and by the buoyant economy. That $140 annual account-keeping fee didn’t look so bad when your credit card was in the black and the value of your house had doubled in the past two years. But with competition to the Big Four now all but wiped out, leaving the Westpac, Commonwealth, NAB and ANZ as the last saviours of our financial system (just ask them), the bastards inside can once again be unleashed. 

The Commonwealth took one for the team this week when it raised variable home loan rates 0.1 percentage points to 5.74 per cent. It was the first mortgage rate increase by the banks since last year but won’t, unfortunately, be the last.

Continue reading "Bastard banks making a comeback after the boom" »

It’s a pretty incredible feat of backspin when a Government would rather say it cocked something up than admit its PR was poorly managed.

But Kevin Rudd and Wayne Swan’s stonewalling on the deficit and debt in the week after the Budget backfired on them so badly its now being claimed it was the result of their own incompetence, not dodgy spin.

Spun out? You’re not the only one. In his column this weekend Laurie Oakes said, contrary to all appearances, Rudd and Swan were advised by their spin doctors to “embrace the numbers” but failed to do so because of “old-fashioned unadulterated incompetence”.

Continue reading "Rudd and Swan’s spin spinning out of control" »

Update: watch Rudd’s limp Lateline performance here

HERE’S a quick test. Read the following words out loud:

Three.
Hundred.
Billion.
Dollars.

Did you succeed? Congratulations! You could be in with a chance of doing a better job at levelling with the Australian people than the current Prime Minister.

Kevin Rudd was collared on Lateline when asked to name the peak level of debt that Australia would face according to the current plan as outlined in the federal Budget last week.

Continue reading "It might be a bad number, but surely the PM can say it" »

Because everyone hasn’t heard enough about Twitter, I’m going to start with a quote from it tonight:

kinkylinkn: Turnbull had some good ideas but when he unashamedly craps on about the Rudd gov that’s when I turn the tv off with a burst of “idiot”.

I have a habit of complaining about politicians, er, complaining all the time. The last whinge in this vein I had to anyone who would lists was about the Treasurer whingeing that Howard’s mob had let spending on some programs go too far, so he would have to wind it back.

Continue reading "Almost an Obama moment in Turnbull’s Budget reply" »

NO one loves a Budget. Like a hangover, you know it’s something you have to endure to pay for the excesses of the night before.

Wayne Swan’s Federal Budget on Tuesday night - after years of excesses under a booming economy - left many Australians punchdrunk and in search of a headache cure for a nation gripped for a pounding from the global financial crisis.

The morning after Budget night, the assessment of bloggers on opinion forums of major Australian news sites was mostly pessimistic.

Continue reading "Punch-drunk Swan gets smashed in cyberspace" »

From the Budget papers:

The Government is committed to retaining the [Extended Medicare Safety Net]. This demands that the safety net remain sustainable. There is evidence to suggest that excessive growth of fees for obstetrics and other services, such as Assisted Reproductive Technology (ART), hair transplants and varicose veins is putting this sustainability at risk.

(I need to be clear that this is not in any way making light of the fact that treatments like IVF are facing a cap. You can read about a child who probably would never have been born had the cap been in place here.)

Step forward, Shane Warne. You have clearly encouraged men of Australia to seek out hair replacement treatments in a way that provides an opportunity to publish this picture again. Warney videos for your viewing pleasure below, too.

Continue reading "Yeah, yeah: Warney’s role in $450m Medicare blowout" »

So, “clean energy” stands as one of the infrastructure centrepieces of the Federal Budget. It’s an investment intended, we’re told, to both pull the economy out of recession and get us on the pathway to a low carbon economy. A princely sum of $4.5 billion is directed to renewable energy, infrastructure for climate-observing systems, and funds for low emissions technology development.

It sure sounds impressive, but under scrutiny, it turns out to be mostly just smoke and mirrors.

Breaking down the numbers, we find that $1 billion is a rollover of existing funds, while $2.4 billion has been directed towards research, development and demonstration of low-emissions coal technology, or “carbon capture and storage” to us scientists. A little under half a billion will go towards establishing a body to support research into renewable energy.

Continue reading "Can’t see the environment measures for all the smoke" »

It wasn’t in the speech, it wasn’t even in the Budget At-a-glance or Highlights document, and it wasn’t anywhere in the 77 pages of press releases distributed last night – if you were looking for the size of the deficit you had to go to page 5 of the Budget Overview document.

Wayne Swan managed to get through 3876 words to the House of Representative last night without letting on the Australian Government was about to embark on a $57.5 billion deficit for 2009-10…

Continue reading "The D, D, Defi- no. Wayne can’t bring himself to say it" »

IF you are an Australian in your early fifties and starting to think, however fleetingly, about retirement, the future you thought you had just changed dramatically.

In an aside in Wayne Swan’s Budget speech he announced the retirement age would be lifted by two years, to 67. There can’t be much that the Treasurer has enjoyed about putting this frightful Budget together, but he might take some quiet consolation in remembering John Howard was that age when he was involuntarily retired as Prime Minister in November 2007.

Lifting the retirement age should come as a relief to younger workers. I love old people – I know some, and sometimes even talk to them. But having a general understanding that you stop paying taxes and start taking them instead at 65 years of age is both ageist and something the country cannot afford to continue.

Continue reading "In one breath, Swan changed your retirement plans" »

What Wayne Swan didn’t tell you tonight was that by 2012 your share of Government Debt will be $8308. Your wife, your husband, each of your kids, your Mum, your Dad, your siblings – each and every one of them $8308 in the red.

When Paul Keating handed back the keys to the Treasury in 1996, that figure was $5258. It took John Howard and Peter Costello nine years to bring us back into the black. All that talk of “temporary borrowings” scattered through the Budget papers sounds more than a little ambitious.

Mash up historical and projected Government Debt figures with population stats from the Australian Bureau of Statistics and the true extent of Kevin Rudd and Wayne Swan’s descent into deficit is shown in what is, admittedly, a very ugly chart.

Continue reading "Til debt do us part: the credit bill of every Australian" »

September 2008: Malcolm Farr writes in The Daily Telegraph that Kevin Rudd is considering taking on net debt for the first time in 12 years. Government goes ballistic in its denials. Newspoll shows ALP 55% - Coalition 45%

October 2008: Rudd announces the first stimulus package and says the cash will be distributed by Christmas. Punters are comfortable with the $10 billion bottom line. Newspoll shows ALP 54% - Coalition 46%.

November 2009: Rudd spills the worst-kept secret in Government - that the Budget will go into “temporary deficit”. Newspoll two weeks later shows ALP 59% - Coalition 41%.

December 2008: Harvey Norman reports bumper Christmas sales, up 9 per cent on previous year. Kevin Rudd Santa Clause jokes start. Newspoll shows ALP 59% - Coalition 41%....

Continue reading "The deficit became funny but Rudd’s not laughing" »

Here’s how The Punch team summarised the Budget shortly after the lock-up ended. Enjoy - and follow us on Twitter to stay in touch. Links at the foot of the post.

BUDGET: Shane Warne implicated in $57.5 billion deficit #ausbudget09 #thepunch

DEFICIT: Wayne Swan won’t tell you this in his speech but for 2009-10 the deficit will be $57.5 billion #ausbudget09 #thepunch

DEFICIT: Swan unveils “deficit exit strategy”. It’s the war on terrifying levels of spending #ausbudget09 #thepunch

Continue reading "No sex until April 2010: The Punch tweets the Budget" »

WAYNE Swan and his mates at Treasury put a lot of effort into producing pretty graphs whose sole intention seems to be to make us feel OK about all the bad news in the Budget. There’s little that needs to be said here except that a lot of this is clearly spin, but under the very last chart below I’ve pointed out a few things worth thinking about.

Continue reading "Tired of reading about the Budget? Here are the pictures" »

As of yesterday about one-million hard-working Australians discovered that Kevin Rudd’s campaign promise to stand up for “working families” came with an invisible asterisk.

The asterisk denotes - “promise does not include all working families”.

Especially those families who work a little bit too hard, who pay a higher rate of tax because they hold more senior jobs, work longer hours, have taken risks starting businesses, employing other people, and have got themselves into a position where with their super, their private health care, their choice of hospitals and schools, they are constantly taking pressure off the public system.

Continue reading "Class war budget betrays hardest-working families" »

Here’s a confronting concept to grapple with first thing in the morning: opposition assistant treasury spokesman Tony Smith saying that Kevin Rudd’s deficit will last longer than the Second World War.

Or so long that, if your first child is born on budget night next Tuesday, they will have enrolled at primary school by the time the Budget is back in the black.

The Daily Telegraph’s Sue Dunlevy reports this morning that next week’s economic statement may contain a deficit figure as high as $70 billion, $10 billion higher than most other estimates in the pre-budget marketplace. Wayne Swan and Kevin Rudd remain sanguine about the enormity of this figure.

But there’s one very big problem with their laid-back approach. 

Continue reading "Joyful crowd celebrates end of Rudd’s six-year deficit" »