Tuesday 16 December 2014

What else happened yesterday? - The AIM Network

What else happened yesterday?

December 16, 2014
Written by:
Michael Taylor
38 Replies

**Hockey and Cormann reveal the MYEFO figures. Photo: Alex Ellinghausen (image from canberratimes.com.au)**

While we were all mesmerised by the tragic and horrific events
unfolding in yesterdays siege at the Lindt cafe, Treasurer Joe Hockey
and Finance Minister Mathias Cormann quietly slipped in to deliver the midyear budget update.

It was also horrific, but in a different sense. Horrific in that
16,500 people will lose their jobs due to the government’s savage cuts
(in their vain attempt to deliver a surplus that they never will), and
for the raft of essential services that will be scrapped.

The cuts announced by Hockey and Cormann have received minimal
coverage in the mainstream media. I found the list on a Facebook page
called Where’s My Ostrich,
and whilst they may or may not be the original compilers, I feel
obliged to credit them for this extensive (and it seems secretive) list.

Cuts the Australian Government Solicitor
Cuts the Telework Advisory Panel
Cuts the Protection Zone Committees
Cuts the Forces Entertainment Board
Cuts the Antarctic Research Assessment Committee
Cuts the Australian Antarctic Names and Medals Committee
Cuts the Biological Diversity Advisory Committee
Cuts the Climate Adaptation Outlook Independent Expert Group
Cuts the Australian Sports Anti-Doping Authority Advisory Board
Cuts the Health and Hospitals Fund Advisory Board
Cuts the National Advisory for Tertiary Education, Skills and Employment
Cuts the Inspector of Transport Security
Cuts the Reconstruction Inspectorate
Cuts the Development Allowance Authority
Abolishes the Artbank Advisory Committee
Abolishes the Australian and New Zealand Standard Diagnostic Procedures Working Group
Abolishes the Benchmarks Working Group which monitors acute hospital performance
Abolishes the Department of Agriculture – Live Animal Export Division – Industry
Government Implementation Group
Abolishes the Forestry and Forest Products Committee
Abolishes the National Surveillance and Diagnostics Working Group
Abolishes the Laboratories for Emergency Animal Disease Diagnosis and Response Working Group
Abolishes the National Strategies Working Group
Abolishes the New Test Evaluation Working Group
Abolishes the Rabies Preparedness Working Group
Abolishes the Subcommittee on Animal Health Laboratory Standards
Abolishes the Australian Defence Force Financial Services Consumer Council
Abolishes the Department of Defence Diversity Advisory Group
Abolishes the Committee which was overseeing reform to the repair and maintenance of the Navy’s ships
Abolishes the Department of Defence CEO’s round table
Abolishes the Standing Council on School Education and Early Childhood Joint Working Group to Provide Advice on Students with Disability
Abolishes the Fair Work Building and Construction Independent Assessor
Abolishes the National Precincts Board
Abolishes the Pharmaceutical Industry Working Group
Abolishes the Bureau of Resources and Energy Economics Advisory Board
Abolishes the Inter-Jurisdictional Working Group
Abolishes the Local Government Ministers’ Forum
Abolishes the National Disaster Recovery Taskforce
Abolishes the Urban Policy Forum
Abolishes the Australian Council of Local Government
Abolishes the Official Establishments Trust
Abolishes the ANZAC Centenary Public Fund Board
Abolishes the Australian National Memorial New Zealand Advisory Panel
Abolishes the Community Nursing Clinical Advisory Committee
Abolishes the eHealth Technical Advisory Group
Abolishes the Gulf War Study Advisory Committee
Abolishes the Medicines Advice and Therapeutics Education Services Practitioner Reference Group
Abolishes the Medicines Advice and Therapeutics Education Services Veterans Reference Group
Abolishes the Medicines Advice and Therapeutics Education Services Writing Group
Abolishes the Peacekeepers Study Advisory Committee
Abolishes the research working group
Dismantles the Vietnam Veterans Education Centre
Abolishes the Strategic Cross-sectoral Data Committee for Early Childhood, Education and Training
Dismantles the Australian Qualifications Framework Council
Wipes out the Education Investment Fund Advisory Board
Cancels the COAG Select Council on Workplace Relations
Abolishes the Antarctic Science Advisory Committee
Abolishes the Bureau of Meteorology Water Accounting Standards Board
Abolishes the COAG Standing Council on Environment and Water
Disbands the Commonwealth Environmental Water Stakeholder Reference Panel
Abolishes the Emissions Intensive – Trade Exposed Expert Advisory Committee
Abolishes the Fuel Standards Consultative Committee
Disbands the Iconic Sites Taskforce
Gets rid of the Indigenous Water Advisory Committee
Abolishes the National Landscapes Reference Committee
Disbands the National Marine Mammal Advisory Committee
Abolishes the National Marine Mammal Scientific Committee
Disbands the Australia Awards Board
Abolishes the Tourism Quality Council of Australia
Disbands the Anti-Doping Research Panel
Disbands the Department of Human Services Council on Strategy and Innovation
Abolishes the Gas Market – Industry Reference Group
Abolishes the Technical Advisory Committee for the Coal Mining Abatement Technology Support Package
Annuls the Infrastructure Coordinator
Silences the Northern Australia Indigenous Experts Forum on sustainable Economic Development
Terminates the Expert Advisory Panel on Northern Australia
Abolishes the Marine Council
Dismantles the Northern Australia Ministerial Forum
Annuls the Regional Australia Standing Council
Cancels the Australia in the Asian Century Advisory Board
Abolishes the First Peoples Education Advisory Group
Cancels the Indigenous Development effectiveness Initiative Steering Committee
Abolishes the Aged Care Standards and Accreditation Agency Ltd
Cancels the Aged Care Planning Advisory Committee
Annuls the Aged Care Reform Implementation Council
Cancels the Healthy Life Better Ageing Committee
Silences the Minister’s Dementia Advisory Group
Abolishes the National Children and Family Roundtable
Silences the National Injury Insurance Scheme Advisory Group
Abolishes the Australian Financial Centre Taskforce
Abolishes the Current and Former Members of the ADF Emerging Issues Forum
Cancels the National Health, Aged and Community Care Forum
Abolishes the Operational Working Party which advises government on the needs of the ex-service community
Cuts funding for the National Trade Cadetships programme
Ceases payments to apprentices under Support for Adult Australian Apprenticeships program
Abolishes the Australian Workforce and Productivity Agency

Horrific, don’t you think?

Monday 15 December 2014

Hockey and Cormann Blindsided - The AIM Network

Hockey and Cormann Blindsided

December 16, 2014
Written by:
John Kelly
21 Replies

In May 2013, Wayne Swan estimated revenues for
the 2014-15 financial year of $401 billion; this was two years in
advance. In May 2014, Joe Hockey projected revenues of $385 billion for
the same period one year in advance.

Just six months later, in December 2014, Hockey downgraded his
original estimate to $374 billion. On this revised figure, Wayne Swan’s
projection was out by about 7%, while Hockey’s was out by 3%.

While both men were taking advice from the same people within the
Treasury department, each had their own input and their own ideological
preferences. So whose projection was the more accurate? Taking the time
factor and more recent information available to Hockey into account,
Wayne Swan was more accurate.

Welcome to the world of revenue estimates. It’s an inexact science
full of unknowns and Joe Hockey is now learning that the hard way. While
we might be tempted to go soft on him, we all remember his heartless
demeanor as shadow treasurer, one that was excessively critical of Wayne
Swan as he conveniently ignored the difficulties Swan faced at the
time.

Now, it is Hockey’s turn to receive some criticism. Hockey is a man
all at sea. He really doesn’t know what to do. His body English gives
him away. His Neo-liberal ideology has no answer to address how he
should approach this difficult task. He says his budget will act as a
shock absorber to protect the Australian economy, but he doesn’t say
how. Whoever wrote that line for him, incidentally, should consider a
career change.

For Hockey’s benefit and Cormann’s too, there is only one way to
protect the Australian economy and that is by deficit spending and lots
of it. If either man is going to ‘fix the budget’ they will have to do
what Labor did and spend up big. This is both men’s ‘Caesar at the
Rubicon’ moment.

It’s
no good trying to take a swipe at Wayne Swan for his earlier
projections. These men should take a good look at their own. All the
debt hysteria that Hockey whipped up prior to last year’s election is
coming back to bite him. How well we remember the debt truck travelling
around the country creating fear and uncertainty in the minds of those
who don’t understand how a government funds its spending. Well, now it
appears, he doesn’t either.

Back in December 2013, after the release of his first and quite dishonest MYEFO, I wrote an article telling Tony Abbott what he had to look forward to:

“In 2016 he will likely have to account for 6.5-7% unemployment, a
lack-lustre private sector, a serious Terms of Trade deficit, a
national debt of around $600 billion, no surplus in sight and a less
than encouraging world economic outlook. The numbers will bury him. And
in addition to all of this, we still don’t know what we don’t know.”

I should have addressed it to Joe Hockey. It wasn’t difficult for me
to see what was coming. It should not have been difficult for him.

To produce a healthy budget you must have a fully engaged workforce
maximising the production of goods and services. Ideally, this should be
achieved by the private sector but when they are sluggish, as they are
now, government must take up the slack and inject money into the
economy; lots of it, targeted at producing goods that we, and the rest
of the world want. It is deficit spending but it is not debt.

Their failure to understand this is Hockey’s and the government’s
problem. Because they are hypnotised by neo-liberal economic ideology,
they can’t see it. When Hockey says the budget will act as a shock
absorber, he doesn’t really know what that means. If he did, he would
follow it up by announcing a stimulus package to get the 1.8 million
Australians currently unemployed and underemployed back to work. That’s a
shock absorber.

BetaShares chief economist David Bassanese
says a perception that Australia’s longer-term budget problems are due
to falling commodity prices is misguided. Mr Bassanese said that he
estimates half of the $40 billion deficit this year is caused by
unemployment being higher than normal – currently at 6.3 per cent, and
forecast by this month’s MYEFO to hit 6.5 per cent.

He’s right. The underutilisation of the workforce is the big drag on
the economy. Mr Bassanese argues that a gradual fall in unemployment and
the revenue boost from income tax bracket creep are the key elements to
tackle if the Government is to return to surplus.

The reality though, is that surpluses are not good for the economy
anyway. They suck money out of the system, money that could be
contributing to growth. Deficit spending injects money into the system,
creates employment, creates demand, increases production, increases
taxation revenues and growth. It’s not that hard to grasp.

If Joe Hockey and Mathias Cormann can’t see that and continue to cut
spending they will only aggravate an economy already on a knife edge.

If they weren’t so blindsided by the excessively wealthy to whom they
owe their election victory, they would see that instead of attacking
the less well off, they could have their surplus simply by abolishing
tax concessions for superannuation and employer contributions, which
would save them $36 billion this financial year and nearly $50 billion by 2017-18.

It is that easy.

And
while we’re on the subject, yes, Joe Hockey did set a date for the
budget to be back in surplus. Way back on 16th May 2012 he told the National Press Club that the budget would be back in surplus in the first year of an LNP government and each year thereafter.

The Coalition and Financial Management . . . an Oxymoron

In "Politics"

Joe Hockey: An Unhappy Dilemma

In "Politics"

Message of the day

In "Politics"

Sunday 14 December 2014

Behold! Joe Hockey's Myefo has arrived – cartoon

Behold! Joe Hockey's Myefo has arrived – cartoon

THE LATEST OF THE DUMBEST TREASURER IN THE WORLD

Budget’s political pain turns out to have been for nothing –

Budget’s political pain turns out to have been for nothing –

IF JOE HOCKEY HAD A BRAIN.............

Budget’s political pain turns out to have been for nothing

Berard Keane
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Dec 15, 2014 3:17PM

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Treasurer Joe Hockey has unveiled a serious deterioration in revenue in the latest budget update.

A year after the government promised that the days of
overestimating revenue were at an end, Treasurer Joe Hockey has unveiled
another write-down for revenue this year and in following years. That’s
on top of the write-down back in May. Since the Pre-Election Economic
and Fiscal Outlook in August 2013 — the one genuinely independent guide
to the nation’s budget, prepared without government interference by
Treasury and Finance — the 2014-15 budget deficit has blown out by
nearly $16 billion, despite the government’s constant rhetoric about its
bringing the budget back under control, and despite all the political
pain that the government has endured. And the deficits for the years
beyond have gone up by nearly $50 billion.

For the man who promised, as late as January 2013, to
deliver a surplus in his first year and every year after that, it’s an
inglorious failure. This is how Hockey’s fiscal problem has unfolded
since his first MYEFO in December 2013 (forecasts surpluses appear as
negatives).

As the graph illustrates, today’s MYEFO has wiped out all of
the gains Hockey made toward a return to surplus in the May budget
compared to last year’s MYEFO — and then some. All that pain has been,
in fiscal terms, for nothing, with a return to surplus now pushed out to
2019-20 — the fiscal equivalent of the never-never.

However, despite the revenue write-downs, Hockey is still
expecting $379 billion in revenue, $19 billion more than in
2013-14 — compared to Wayne Swan’s situation in 2008 and 2009, when
revenue actually fell in nominal terms. The Commonwealth will
take 23.6% of GDP in revenue, a full 0.8 points higher than last year
and the highest level since Peter Costello’s last budget, while spending
will now increase from 25.7% of GDP to 25.9% of GDP.

Hockey has to take some of the blame himself for his own
revenue situation. It has been his poor handling to 2014-15 budget that
has contributed to a collapse in consumer and business confidence,
making the transition from fading mining investment to more traditional
housing and consumer-based economic drivers much more difficult than it
should have been. And despite the government’s rhetoric about getting
the budget under control, it handed out big tax cuts to carbon emitters,
mining companies, tax rorters and wealthy superannuants.

But the collapse in the terms of trade — expected in May to
be -6.75%, but instead forecast to be -13.5% — is something entirely
beyond the government’s control. The only control the government has is
over how it reacts, and in this case it has reacted appropriately, by
declining to slash spending to match falling revenue. As a result, it is
providing more stimulus to the economy than it had planned, and given
the circumstances, that’s exactly the right call. Indeed, if economic
weakness persists, the 2015-16 budget may include some further stimulus,
not in the automatic stabiliser sense, but reflecting a conscious
decision to undertake further, stimulatory spending.

Hockey is thus in exactly the same position as Wayne Swan
was: battling external forces (Swan had the high dollar, Hockey has low
commodity prices) that keep sucking up his revenue, he’s declined to try
to offset those losses for the sake of economic growth, and he finds
his previous rhetoric about surpluses now very inconvenient.

Thursday 11 December 2014

SACK HOCKEY. WE NEED A JOB CREATION PLAN, NOW! - The AIM Network

SACK HOCKEY. WE NEED A JOB CREATION PLAN, NOW!

December 12, 2014
Written by:
John Kelly
Leave a reply

The Australian economy is heading down a slippery slope.
Successive data released by the Australian Bureau of Statistics this
week is all pointing in the same direction. Last week the national
accounts figures showed national growth below trend at 0.3% for the
September quarter, and annual growth at 2.7%.

A growth rate of 3% is necessary just to maintain the existing workforce. Therefore, it was no surprise that Thursday’s employment figures
for November showed a further increase in unemployment of 0.1% to 6.3%.
Worse still was the finer detail. There were only 1800 new full time
jobs created and 40,800 part time jobs. The creation of only1800 full
time jobs in November is a damning indictment of the government’s fiscal
policy

It means the underutilisation rate, i.e. the total of unemployed and
underemployed, has reached 15%. In body count terms that is a total of
1,848,100 people either not working or working reduced hours. That
figure by any measure is a crisis. It is a clear indication that the
government’s economic policy is a failure and shows that Joe Hockey’s
austerity economics is taking precedence over the need to tackle
unemployment.

The
government in its infinite stupidity still thinks it needs to cut
spending. The lunacy of this thinking can be demonstrated quite simply.
To continue trying to reduce the fiscal deficit while industry is in the
doldrums will lead to depressed output, a continued reduction in the
national income which in turn will cause a reduction in demand; in
short, a never ending downward spiral.

This will lead to further unemployment and less tax revenue, which
means the fiscal deficit will continue to rise anyway. Little wonder
then that the Consumer Sentiment Index also released this week shows further decline and is now down to the same levels experienced during the GFC.

Why is this not obvious to Joe Hockey?

The index was 105 points in December 2013 and today it is 91.1 index
points, a slide of 14% in one year. In fact this decline started with
the end of Kevin Rudd’s fiscal stimulus. These figures may not mean much
to the average man or woman in the street who still has a job, but they
are a sure-fire indicator that worse is to come. That should make those
who are employed, either full or part time, feel very nervous.

In the words of Bill Mitchell, Professor of Economics at the University of Newcastle, New South Wales, “The
Government should abandon their ideological obsession with supply-side
punishment regimes and realise that the unemployed cannot search for
jobs that are not there.” The government’s policy settings are all
wrong and they will continue to worsen unless a well planned and
executed stimulus is put in play.

If Joe Hockey cannot see what is coming, he should not be in the job.
The present policy of fiscal austerity is counter to the OECD working
paper released December 9, 2014, entitled – Trends in Income Inequality and its Impact on Economic Growth –
by Federico Cingano. The paper’s major findings were that the gap
between rich and poor was at its highest level in 30 years, that
income inequality and underinvestment in education were the major
contributors to this gap and that promoting skills and learning across
families and youth was paramount in arresting job decline and promoting
growth.

As Bill Mitchell says, “We need a government to get involved in providing public services and infrastructure particularly to low income groups.”
The current neo liberal philosophy of supply side economics is a proven
failure and by pursuing it our government is taking us down a slippery
slope to economic disaster.

And what is our government doing at the moment? They are trying to
stifle youth education and engage in austerity economics in a vain
effort to return to surplus. This is madness. We need a job creation
program now, one that is backed up by skills training in areas that will
increase production to meet demand.

If we continue with Hockey’s austerity program, by this time next
year unemployment will likely be close to 7%, revenues will have further
declined and welfare payments increased to such an extent that the
deficit will break through $50 billion. It is already $34 billion
compared with the May budget estimate of $29 billion.

There
is no joy in saying those figures will be the end of the Abbott
government. The misery of those who will be unemployed and
underemployed, part of a sub-class of Australians, the legacy of a
failed economic policy, will be more than enough for an incoming
government to deal with. To avoid a looming catastrophe we need a job
creation program now or we travel down the road to perdition in more
ways than one.

But don’t take my word for it. Read Bill Mitchell’s most recent blog.

Like this:

Friday 5 December 2014

JOE HOCKEY aka MR DOOMSDAY: Joe’s economic story just doesn’t add up –

JOE HOCKEY aka MR DOOMSDAY: Joe’s economic story just doesn’t add up –: Joe’s economic story just doesn’t add up – Joe’s economic story just doesn’t add up Bernard Keane ...

Wednesday 3 December 2014

Hockey under the Pump - The AIM Network

Hockey under the Pump

December 4, 2014
Written by:
John Kelly
20 Replies

Joe Hockey was doing his best to put a positive
spin on the latest national accounts figures on Wednesday. The September
quarter showed growth of 0.3% and 2.7% for the 12 months to September,
which was significantly less than expected.

Hockey acknowledged that GDP growth had slowed but thanked ‘God’ that
he got rid of the carbon and the mining tax so that the disappointing
result in GDP growth could now be reversed in 2015. I interpreted his
‘thank God’ remark as giving thanks to the Almighty that business would
no longer be hamstrung by the tax and would now likely want to crank up
on its investment strategy.

I’m
not sure his ‘God’ would agree with his reasoning but the remark gave
me the impression that if the private sector didn’t get on board
quickly, he (Hockey, not God) did not hold high hopes for our future.
Actually, he looked like a defeated man.

While our exports grew, our gross domestic income went backwards
which means our per capita disposable income was less. One would have
thought that with all the trumpet blowing about the removal of the
carbon tax and the associated electricity savings expected, we would
have seen an increase in disposable income.

But, as it turns out, incomes are being squeezed due to a horror
budget. Not surprisingly, household spending is contracting and we are
now experiencing what economists are calling an income recession.

That means we are poorer and we are about to spend less.

One can see the pressure Hockey is experiencing. Business investment
is in free fall and his entire budget strategy is dependent on the
private sector becoming the main source of a rejuvenated upward move
that would see real increases in employment opportunities. But it isn’t
working.

Interestingly, two days after the Victorian state election, Daniel
Andrews revealed, that in a phone conversation he had with the prime
minister, Tony Abbott asked him to break an election promise and build
the East-West tunnel. On Wednesday, Joe Hockey was doing the same;

It seemed that Hockey was implying that Andrews was responsible for
holding up infrastructure works that would otherwise help Hockey’s
bottom line; a new twist on the ‘blame Labor for everything’ strategy.

Daniel
Andrews told Abbott that there were many things he wanted to build and
would welcome Canberra’s involvement, but the East-West tunnel would not
be one of them. And that is one of the reasons Hockey is showing signs
of frustration.

He needs things to happen now, not in one or two years’ time. My
guess is, he has gazed into the future and realised that if some big
spending infrastructure programs don’t get underway quickly, his
economic plan will be in tatters.

He is right on the need for some serious spending. Our economy needs a
boost to stimulate growth. Economists are disappointed with Wednesday’s
national accounts numbers. They were expecting something much better.
We were too reliant on mining investment and now commodity prices have
collapsed and with it, anticipated revenue.

But if the government expects the private sector to step up to the
challenge while its austerity budget is slowing growth and squeezing
disposable incomes, then perhaps they should be thinking about a
stimulus budget. It really shows that they just don’t get it. They seem
to want their cake and eat it too.

It
is the Neo liberal macroeconomic aversion to debt that holds them back.
The fear of leaving our grandchildren with a burden of debts and
deficits. How paternalistic, how noble. Yeah right. It’s more likely the
fear that some of the nation’s wealth may fall into the hands of the
average man and woman that really bothers them.

Labor may not understand modern monetary theory any better than the
present government but faced with rising unemployment, they would not be
afraid to commit to infrastructure projects that would stimulate the
economy and contribute to GDP growth.

Nor would they be afraid to invest in climate change initiatives that
by definition would contribute to GDP growth in an uncertain future.
They know the value of a strong workforce.

Labor would not be afraid to tell business to lift its game and play
its proper role; even help it along if it could demonstrate improved
productivity and domestic growth.

But what stood out in that short televised interview on ABC News 24,
was that Hockey didn’t seem to mind urging Daniel Andrews to stick the
proverbial finger up the nose of the Victorian voters. You could see the
desperation on his face as he issued a plea to the Victorian premier to
break an election promise and build the East-West tunnel.

If
ever we had proof the LNP were unfit to govern we can see it here in
three distinct attitudes. They have no respect for election promises,
they are so fixated on surpluses that they can’t see how deficit
spending stimulates the economy and their ideological bias is
diametrically opposed to equality for all in a vibrant national
prosperity drive.

Can we ever take anything they say seriously again?

Tuesday 16 December 2014