Federal Election-September 14 2013

 
  bingley hall Minister for Railways

Location: Last train to Skaville
Gillard/Milne would no doubt say "Tony Abbott Point canned".
awsgc24

Gillard/ Milne would probably say - ain't it funny how these Liberal parrots can't even get the simplest of facts right



FOR most of its 30 years as a coal terminal, Abbot Point, 25km north of the coastal town of Bowen, has been the little sister to its giant siblings farther south, Gladstone and Dalrymple Bay. Nestled among huge rain-forest-covered mountains that come right down to the sea, Abbot Point opened for business in 1984 -- and then only to service two of the smaller mines in the north of the Bowen Basin, Collinsville and Newlands. Until recently it had a capacity to load only about 10 million tonnes a year, while Gladstone and Dalrymple Bay were doing upwards of 60 million tonnes and looking at a lot more. But circumstances, geography and huge overseas demand are pushing the growth of Abbot Point to the extent that within a decade it could become the biggest coal port in Australia -- if not the world -- with a total capacity of 300m tonnes.
The Australian

http://www.theaustralian.com.au/business/mining-energy/abbot-point-expansion-reaches-terminal-velocity/story-e6frg9df-1226619466672

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  Aaron The Ghost of George Stephenson

Location: University of Adelaide SA
Then why, as has been noted above, is Hockey claiming that interest rates will always be lower under a Liberal Government?
bingley hall
Ah yes, but the LNP won't go retrospectively taxing superannuation...
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
Then why, as has been noted above, is Hockey claiming that interest rates will always be lower under a Liberal Government?
bingley hall
I think this is historic. I could be wrong on this but when Howard was in power, it was after years of higher interest rates under Hawke/Keating driven by the reserve bank trying correct for the govt spending and higher inflation, especially in late 80's when Keating lost control of a booming economy. Under Whitlam Interest rates were also very high and during Fraser years.

http://www.mortgageseek.com.au/images/interest-rates-australia.gif

Even during the 1992 recession interest rates were higher than the boom of 2007-08.

However the 2000's was a different era world wide and I'm not sure Howard should claim 100% of the outcome, but in Australia we have a trend for ALP govts to overspend and for LNP govts to make correction and reduce debt. Lower inflation was more common world wide and I think govt's probably had better control of their economies. The reserve bank I believe likes to see growth at 2-3.5% for Australia because this keeps up with population growth. Any faster and you create a job shortage, inflation and boom-bust economy. Likewise below 2-2.5% we see rises in unemployment. European countries with near zero population growth need lower.

In the 2010's it would appear world wide, its different again with 0% inflation or lower common in some countries with 0% interest rates as they try and get idle economies growing again. So I supppse its hard for Australia to high interest rates if Europe and USA are near zero. Cash would then leave these places and come into Australia, driving up $A and enabling th banks to offer lower rates due to demand. So even a booming economy would struggle to have high interest rates in the current world environment.

Well thats my take, feel free to correct.

Regards
Shane
  HeadShunt Chief Train Controller

I think this is historic.

However the 2000's was a different era world wide and I'm not sure Howard should claim 100% of the outcome
RTT_Rules
Yes... I'm not sure he could claim anywhere near 100% of it. Governments control public spending and "influence" domestic economics to varying degrees, but they do not control global economic forces that have a huge impact on what happens here.

In many cases it's just governments riding the tide, taking credit for favourable conditions when the going is good and blaming the previous government when they go down the toilet, regardless of the real causes, many of which are beyond their control. The industrial world as we know it is probably in the process of collapsing and governments are still selling us BS about how they are going to work towards a brighter future - by preserving the institutions of the status quo, whereas the other party will pave the road to ruin; that's all they can do. We're probably on the road to ruin irrespective of who is in power.

As has been mentioned, low interest rates are definitely not inherently good things. Making credit (which is a nice way of saying debt) cheaper and the resultant increased expansion of the money supply tends to work as a tax on consumers whose dollars lose purchasing power through inflation unless the economy grows in proportion, which I don't think is happening. Hence in some areas the real inflation is probably well above the 2 point whatever percent we keep hearing... and the unfortunate situation with inflated housing and other assets will also be prolonged by cheap credit money supply boosts. OK, so we keep reducing rates because the recovery never quite arrives. When rates get to zero, then what? I think the Fed is injecting about $85 billion into the US per month in what could become QE4ever just to maintain some semblance of a real economy.
  Speed Minister for Railways

I think this is historic. I could be wrong on this but when Howard was in power, it was after years of higher interest rates under Hawke/Keating driven by the reserve bank trying correct for the govt spending and higher inflation, especially in late 80's when Keating lost control of a booming economy.
"RTT_Rules"
In the 80s, it would have been the Treasury making decisions about interest-rates rather than the reserve-bank. Interest-rates were lowered in response to a sudden worldwide plunge in stock-market values in 1986 and the consequent loss in investment confidence. The end of the 80s saw a boom worldwide and countries raising interest-rates to curtail inflation again. Australia moved sooner than others and was recovering by 1992, while the United States was contracting further, hence the Democrats' slogan, It's the economy, Stupid! for the presidential election that year. After lowering interest rates in the early 90s, Treasury didn't raise rates again until Hawke, if not Dawkins, retired.

Hawke/Keating had deregulated interest-rates, making banks, rather than Treasury, responsible for choosing home-loan rates. Treasury still had control over supply of money / fiscal policy. Costello would have some years as Treasurer before he transferred control of fiscal policy out of Treasury.

Bing's question was not about fiscal policy so much as about slogans. Like with Abbott's promise about the carbon-pricing, Howard & Costello made a point of lowering interest-rates in the first quarter after they became Prime Minister and Treasurer, fulfilling an election-promise rather than addressing any sudden surge in inflation. In the 2004 election, Latham had to sign a declaration (in the style of those big cheques) that a Latham government would not intervene to raise interest-rates again. Every time that the Reserve Bank has raised rates under a Rudd or Gillard government (quite numerous for a world in a financial crisis), Abbott/Hockey have attacked Swan for being a high interest-rate Treasurer (hence Swan's habit of calling on the banks to lower lending rates when interest-rates do fall).
  Speed Minister for Railways

I think this is historic. I could be wrong on this but when Howard was in power, it was after years of higher interest rates under Hawke/Keating driven by the reserve bank trying correct for the govt spending and higher inflation, especially in late 80's when Keating lost control of a booming economy.
"RTT_Rules"
In the 80s, it would have been the Treasury making decisions about interest-rates rather than the reserve-bank. Interest-rates were lowered in response to a sudden worldwide plunge in stock-market values in 1986 and the consequent loss in investment confidence. The end of the 80s saw a boom worldwide and countries raising interest-rates to curtail inflation again. Australia moved sooner than others and was recovering by 1992, while the United States was contracting further, hence the Democrats' slogan, It's the economy, Stupid! for the presidential election that year. After lowering interest rates in the early 90s, Treasury didn't raise rates again until Hawke, if not Dawkins, retired.

Hawke/Keating had deregulated interest-rates, making banks, rather than Treasury, responsible for choosing home-loan rates. Treasury still had control over supply of money / fiscal policy. Costello would have some years as Treasurer before he transferred control of fiscal policy out of Treasury.

Bing's question was not about fiscal policy so much as about slogans. Like with Abbott's promise about the carbon-pricing, Howard & Costello made a point of lowering interest-rates in the first quarter after they became Prime Minister and Treasurer, portraying their government as sparing battlers from high-interest rates rather than addressing any sudden surge in inflation. In the 2004 election, Latham had to sign a declaration (in the style of those big cheques) that a Latham government would not intervene to raise interest-rates again. Every time that the Reserve Bank has raised rates under a Rudd or Gillard government (quite numerous for a world in a financial crisis), Abbott/Hockey have attacked Swan for being a high interest-rate Treasurer (hence Swan's habit of calling on the banks to lower lending rates when interest-rates do fall).
  don_dunstan Dr Beeching

Location: Adelaide proud

...

Hence in some areas the real inflation is probably well above the 2 point whatever percent we keep hearing... and the unfortunate situation with inflated housing and other assets will also be prolonged by cheap credit money supply boosts. OK, so we keep reducing rates because the recovery never quite arrives. When rates get to zero, then what? I think the Fed is injecting about $85 billion into the US per month in what could become QE4ever just to maintain some semblance of a real economy.
HeadShunt

You make some very interesting points.  It's interesting that despite the huge amounts of really cheap money sloshing around waiting to be borrowed (interest rates at historical lows) that there's not a rush to borrow for housing - not from first home-buyers anyway, which is the exact group the cheap money is being marketed to.

As you alluded to, part of the problem is the sheer cost of housing in our capitals.  Three hundred grand for a basic poorly-insulated box on a tiny block miles from any services on the outer fringes (let alone public transport) is, for some bizarre reason, not turning people on enough to buy any more.  Try buying closer to the city and you are up for maybe half a million or more for an established house in a middle-ring suburb; it's just not feasible for average people any longer to buy in an accessible part of Sydney or Melbourne.

It doesn't explain all of the problems we are having presently but the astronomically high cost of housing certainly contributes to the high cost of doing business here.
  Speed Minister for Railways

The election topic of the week seems to be a boy throwing a sandwich at the Prime Minister when she visited a school. The boy accused was suspended. He then called talkback radio to tell the Prime Minister about it. It appears to me that he already had a few warnings against his conduct, he was the obvious person to blame when you see a sandwich thrown and this latest incident was just the one that brought more than a detention and a stern conversation between his parents and the school.

Also, Ettridge's case against Abbott has been stalled by another month,
  Aaron The Ghost of George Stephenson

Location: University of Adelaide SA
Also, Ettridge's case against Abbott has been stalled by another month,
Speed
Ettridge is going to realise that those who self represent in court have a fool for a council. He has failed to format and file documents correctly so it looks like he's well on the way to proving the adage.
  simont141 Chief Commissioner

Location: Adelaide
There will be a referendum at the upcoming election, regarding recognising Local Government in the constitution. This is to allow Commonwealth funding (e.g. Roads to Recovery, RDA Fund, Home and Community Care Program, etc.) to be granted direct to Local Government, rather than going via the State.

The proposed change will be to Section 96 of the Constitution so that it would read:  "Parliament may grant financial assistance to any state or to any local government body formed by State or Territory legislation on such terms and conditions as the Parliament sees fit."  
  HeadShunt Chief Train Controller

There will be a referendum at the upcoming election, regarding recognising Local Government in the constitution. This is to allow Commonwealth funding (e.g. Roads to Recovery, RDA Fund, Home and Community Care Program, etc.) to be granted direct to Local Government, rather than going via the State.

The proposed change will be to Section 96 of the Constitution so that it would read:  "Parliament may grant financial assistance to any state or to any local government body formed by State or Territory legislation on such terms and conditions as the Parliament sees fit."  
simont141
Makes me wonder what role the Commonwealth should really be playing. Were it not for mission creep they wouldn't have the money to give local governments in the first place.
  Aaron The Ghost of George Stephenson

Location: University of Adelaide SA
There will be a referendum at the upcoming election, regarding recognising Local Government in the constitution. This is to allow Commonwealth funding (e.g. Roads to Recovery, RDA Fund, Home and Community Care Program, etc.) to be granted direct to Local Government, rather than going via the State.

The proposed change will be to Section 96 of the Constitution so that it would read:  "Parliament may grant financial assistance to any state or to any local government body formed by State or Territory legislation on such terms and conditions as the Parliament sees fit."  
simont141
Mmmm, yes I heard about that, it'll be getting a no from me. My council (and the Adelaide City Council) already waste enough dollars without the added encouragement from the Fed dollars...
  Donald Chief Commissioner

Location: Donald. Duck country.
My local council is financially unviable (broke).   It delayed handing out grants from the state government to community groups for several months so that the staff could get paid until the next round of rate payments came in.   Flood relief money paid to them hasn't been used for flood repairs.   Would I trust our shire? - NO.
  Speed Minister for Railways

The Commonwealth already has the power to give grants to any person that they want to give a grant.

Local governments currently exist and are governed by state statutes. What recognising local government in the Commonwealth Constitution may achieve is to allow the Commonwealth to control local governments the way that state governments can or make rules surrounding local government uniform across the country.
  Aaron The Ghost of George Stephenson

Location: University of Adelaide SA
The Commonwealth already has the power to give grants to any person that they want to give a grant.

Local governments currently exist and are governed by state statutes. What recognising local government in the Commonwealth Constitution may achieve is to allow the Commonwealth to control local governments the way that state governments can or make rules surrounding local government uniform across the country.
Speed
This is not about control, it's about funding, that's all there is to it.

The High Court has disagreed with you twice, read the Williams Case, 'the Commonwealth does not have the power to provide direct funding in areas and to organisations outside the Commonwealth’s constitutional responsibility'.

Or 'Pope vs Commissioner of Taxation', 'the Commonwealth does not have power to directly fund areas such as local government. It can only spend money where it has a specific power under the Constitution.'

- That's clear enough for me, if you still have doubts maybe ask why 'Roads to Recovery' ain't happening...

A council is not a local government anyway (and even if it is, it is certainly not a person), most of them are too large to be local and if they are a government why do they have a CEO and ABN? Councils are corporations not local government at all.

This referendum will go the way of the 1988 referendum on the same issue, a comprehensive loss.
  Speed Minister for Railways

Constitutional cases are heard by eight High Court judges, normal for the High Court. The two cases to which Aaron refers are Pape v Commissioner of Taxation [2009] and Williams v Commonwealth (2012), where the applicants held that Rudd's stimulus package and Howard's school chaplaincy programme respectively were unconstitutional. High Court judges are not going to take constitutional cases lightly. These type of cases, where the applicants are just trying to interfere with government spending not for their own gain, are storms where all eight judges are likely to disagree fervently with each other. It's hardly surprising if Aaron can find a sentence to disagree with something on them.

Williams succeeded with the High Court finding that the funding of school chaplains had to be passed by Parliament rather than just Treasury. The Gillard government responded by putting the scheme to Parliament. It did not find that s116 ("The Commonwealth shall not make any law for establishing any religion") or any other section made the scheme unconstitutional. It focused only on executive power to appropriate money. Pape might have succeeded had Rudd's package not been approved by Parliament before it was challenged.

There was largely agreement that s81 restricted where the Commonwealth could appropriate money to "the purposes of the Commonwealth". If this includes payments to religious organisations for services of a pastoral nature, it would hard to see how it doesn't include sub-arterial roads or bicycle-paths.

Whether the proposed constitutional change applies to power or applies to funding will depend upon the exact words. Chapter V of the constitution covers existing states. Every other chapter involves the states somehow. Section 96 alone says that the Commonwealth "Parliament may grant financial assistance to any State on such terms and conditions as the Parliament thinks fit". The proposed change would have to have words like "grant financial assistance to any local government" to extend the power to give local councils money. Words like "The Commonwealth shall have power to make laws for the peace, order and good government with respect to local governments." would achieve less.

I see that this proposed constitutional change has brought out another silly suit from Ipswich.
BILL Longford is refusing to pay 20 parking fines - and he is doing so on constitutional grounds.
...
"They are breaking my constitutional and democratic rights," he said. "They don't have the right to issue a parking ticket. Julia Gillard said there will be a referendum to recognise local government in the constitution. So what does that mean? It means they are not in there. They are not a tier of government."

There was a referendum in 1988 to recognise local government in the constitution, but it failed
http://www.qt.com.au/news/20-parking-ticketsand-im-not-paying-oneof-them-bil/1862557/

Let's take a look at the Local Government Act 2009 (Qld).
8(1) A local government is an elected body that is responsible for the good rule and local government of a part of Queensland.

Note- This is provided for in the Constitution of Queensland 2001
...
28 Power to make a local law
(1) A local government may make or enforce any local law that is necessary or convenient for the good rule and local government of its local government area.
(2) However, a local government must not make a local law -
(a) that sets a penalty of more than 850 penalty units for each conviction of failing to comply with a local law ....

They're also disallowed from passing laws about telecommunications networks, electoral campaign material, planning and development processes, pool safety or anti-competitive business practices.
  Aaron The Ghost of George Stephenson

Location: University of Adelaide SA
So what you are really trying to say Speed is that I just happened to fluke naming two cases in which the High Court held (or would likely have held) that the Commonwealth could not simply allocate funding at a local level?

You attempt to set out the cases as something drawn out of a text book definition of vexatious. The trouble for you is instead of being summarily dismissed as a waste of the High Court's time and resources the cases fully proceeded, and despite being defended by the Commonwealth, the court not only chose to hear the complaints, but agreed with one and would likely have agreed with the other.

If your assertion that the Commonwealth could directly fund to a local level was to be true, the complaint would probably have not been made in the first instance, the complaint would certainly not have been heard in the second and would have no grounds for being upheld in the third.

Why did you put the reference to the religious argument? Your post, my reply and your most recent reply to that are relating to a Referendum on appropriation, what has the religious side of a High Court question got to do with anything relevant to this thread?

And since when is the full bench eight? Try seven...
  Aaron The Ghost of George Stephenson

Location: University of Adelaide SA
What recognising local government in the Commonwealth Constitution may achieve is to allow the Commonwealth to control local governments the way that state governments can or make rules surrounding local government uniform across the country.
Speed
Whether the proposed constitutional change applies to power or applies to funding will depend upon the exact words.
Speed
You seem real hung up on this control thing. The Commonwealth, if it wanted to control 'local governments' already could, without an amendment to the Constitution. They (the Commonwealth) have this little thing at their disposal called 'The Corporations Act 2001' as I have previously mentioned councils are corporations, ABNs, CEOs, etc. the Commonwealth already has all the access to control methods it might need.
  Aaron The Ghost of George Stephenson

Location: University of Adelaide SA
Anyone want to have a guess at tonight's deficit? I am going with in excess of $26Bn, hopefully now too much over but in the office betting I have bet on $31Bn - a figure I truly fear may be very close to correct.
  Donald Chief Commissioner

Location: Donald. Duck country.
And Swansong wants us to believe we will be in surplus in 3 years.   Yeah right.   2020 at least.
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
Yes... I'm not sure he could claim anywhere near 100% of it. Governments control public spending and "influence" domestic economics to varying degrees, but they do not control global economic forces that have a huge impact on what happens here.

In many cases it's just governments riding the tide, taking credit for favourable conditions when the going is good and blaming the previous government when they go down the toilet, regardless of the real causes, many of which are beyond their control. The industrial world as we know it is probably in the process of collapsing and governments are still selling us BS about how they are going to work towards a brighter future - by preserving the institutions of the status quo, whereas the other party will pave the road to ruin; that's all they can do. We're probably on the road to ruin irrespective of who is in power.

As has been mentioned, low interest rates are definitely not inherently good things. Making credit (which is a nice way of saying debt) cheaper and the resultant increased expansion of the money supply tends to work as a tax on consumers whose dollars lose purchasing power through inflation unless the economy grows in proportion, which I don't think is happening. Hence in some areas the real inflation is probably well above the 2 point whatever percent we keep hearing... and the unfortunate situation with inflated housing and other assets will also be prolonged by cheap credit money supply boosts. OK, so we keep reducing rates because the recovery never quite arrives. When rates get to zero, then what? I think the Fed is injecting about $85 billion into the US per month in what could become QE4ever just to maintain some semblance of a real economy.
HeadShunt
How whole economy is based on the basis that there is some inflation, previously it was in the range of 5-15%, but now 0-5%, depending on country. There was no other way. People argru for more income, higher costs leads to increases business and eventually goods. Dropping below 0% interest rates and deflation is venturing into the unknown. I'm not sure there is any magical barier at 0%, maybe apart from banks computers. But the thought of leading money and the longer you take to pay it off the less you pay would be intresting, noting your salary will also decrease over time.

The fact that interest rates are at near 0% in some countries because people are not borrowing money, so if 0% is a hard line, the next thing is for the govt to wear the pain and spend, but a few govts have near zero access to credit and if they use the Euro they cannot kill their currency, so basically these countries are phooked unless they can reduce their costs and make them selves cheaper to do business in which if you are waiting for inflation in the likes of Germany and France to make a difference will take for ever, so deflation me thinks has to occur?
  cootanee Chief Commissioner

Location: North of the border!
And Swansong wants us to believe we will be in surplus in 3 years.   Yeah right.   2020 at least.
Donald
A few are questioning this obsession with surpluses. Having just rode out the GFC, with most of the world economies still bumping along the bottom and the 'good times' tax cuts of the past decade coming back to bite, a surplus maybe noble but it's hardly essential that it happens any time soon.
  djf01 Chief Commissioner

The fact that interest rates are at near 0% in some countries because people are not borrowing money, so if 0% is a hard line, the next thing is for the govt to wear the pain and spend, but a few govts have near zero access to credit and if they use the Euro they cannot kill their currency, so basically these countries are phooked unless they can reduce their costs and make them selves cheaper to do business in which if you are waiting for inflation in the likes of Germany and France to make a difference will take for ever, so deflation me thinks has to occur?
RTT_Rules

The first lesson my high school economic teacher sprung on us was: "economics has nothing to do with money".

And it's very true.  It's all about how resources are allocated to meet people's needs and wants.  Money - who's significance which as an invention makes the wheel look like the popup toaster - is an arbitrary quantification we use to assign universally recognised values to things that make up an economy.  

For fairly obviously reasons, people generally act in a way to maximise their money (or at least their use of it).  To the extent to which money actually represents tangible things in an economy, the behaviour also tends to optomise the allocation of real tangible resources.

Where inflation or hyper inflation exists, the supply of money is increasing at a greater (perhaps substantially greater) rate than growth in actual productive capability.  Over time it transfers control of resources (read wealth) from creditors to debtors.  It's impact is very destructive because when people attempt to maximise their money in this environment, resources get allocated away from genuinely productive activities and into instruments that allow the acquisition of debt (like unwanted housing).  

Even more destructive in deflation.  Then, the supply of money is contracting.  To maximise an individual's money the best thing to do is dispose of productive assets prices are decreasing in price and shift into cash (who's "value" is increasing).  In a deflationary environment the financial signals are the exact opposite to those required for a real tangible economy to grow.  We saw in 2008 nearly 10% of the productive capacity in the USA destroyed in less than 6 months, and it still hasn't really recovered from that.  But the Great Depression is the textbook example.

So, in a post depression world the economic orthodoxy is inflation should be managed and kept low, but still positive.  There needs to be an incentive for holders of money to put it into genuinely productive assets that generate a financial return because they generate a real economic return.  To some extent the supply of money *needs* to grow ahead of the real economy to induce appropriate levels of *real* (tangible stuff) investment.  Increasing the rate of growth of the money supply can - in some cases - precipitate greater investment and increase future real world growth to justify the expansion.

These days governments use monetary policy to try and maintain a low but slightly positive level of inflation.  It's now usually done through an independent central bank (to keep the politicians out of the decision making process and in the hands of people who - hopefully - know what they are doing and why).  Interest rates is but one tool central bank's have to control money supply, and in the USA they have been using "Quantitative Easing" as an alternative out of necessity to maintain the supply of money in their economy.

The main problem the GFC and the Euro crisis has demonstrated is the banking system has a substantial role to play in the actual money supply.  Fractional reserve baking means changes - even small ones - to the willingness of banks to extend credit have a large impact on the total money supply.  Central Banks around the world are struggling to retain control of their currency's money supply because of risk aversion issues in the banking sector precipitated by changes to the ratings of mortgage backed securities in the USA and government backs securities in Europe.

The other major problem the world now has is singe GAT & the formation of the WTO world trade as a portion of GDP has increased dramatically.  No currency - not even the USD - is really big enough to stand in the way of the resulting capital flows from all this international trade.  By and large this is a good thing, but the problem is it makes it very difficult for central bank to contain changes they try to make to their currency's money supply to just their currency.  The increase in supply can easily flow across boarders.

Try to imagine what Australia would be like of each state had it's own currency.  Imbalances in trade between WA and NSW would cause imbalances in real world production - where tourists go, where some things are manufactured, housing/borrowing costs in the different juridictions etc.  OK, so probably no major drama.  Now try and imagine what it would be like if each local government area had it's own currency, and it was tightly aligned with the fiscal responsibility of the local council!  Prices of everything would be fluctating all over the place based on which council took the most garbage.  It would make cross border business extremely difficult, and on such a scale that'd mean most SMEs rather than just a few big multi-staters.  Councils would be competing with each other to offer the most attractive currency.

The latter is not unlike the current system we have in the world at the moment.  Lots and lots of (relatively) small jurisdictions trying to independently maintain a constant supply of something that is fundamentally linked, while at the same time competing with their neighbours to see if they can grow their's just a little bit faster.

It's kinda/sorta working at the moment because most countries have the same goals and are attempting to achieve them by the same means - including China.  But it's ultimately not sustainable, and I think we'll see either an eventual substantial reduction in world trade (not unlike that which followed the Great Depression), or we'll end up with some sort of global currency which we can all trade with each other in.
  fabricator Chief Commissioner

Location: Gawler
However the 2000's was a different era world wide and I'm not sure Howard should claim 100% of the outcome, but in Australia we have a trend for ALP govts to overspend and for LNP govts to make correction and reduce debt. Lower inflation was more common world wide and I think govt's probably had better control of their economies.
RTT_Rules

My take is the LNP governments save money at the expense of not spending money on infrastructure upgrades, then blame the ALP for going on a spending spree to fix 13 years of neglect.

One issue is the sell off of the Commonwealth Bank, it removed the ability of the government to have some direct control over interest rates, lending criteria, and indirectly house prices.

You make some very interesting points.  It's interesting that despite the huge amounts of really cheap money sloshing around waiting to be borrowed (interest rates at historical lows) that there's not a rush to borrow for housing - not from first home-buyers anyway, which is the exact group the cheap money is being marketed to.

As you alluded to, part of the problem is the sheer cost of housing in our capitals.  Three hundred grand for a basic poorly-insulated box on a tiny block miles from any services on the outer fringes (let alone public transport) is, for some bizarre reason, not turning people on enough to buy any more.  Try buying closer to the city and you are up for maybe half a million or more for an established house in a middle-ring suburb; it's just not feasible for average people any longer to buy in an accessible part of Sydney or Melbourne.

It doesn't explain all of the problems we are having presently but the astronomically high cost of housing certainly contributes to the high cost of doing business here.
don_dunstan


This is the real problem, its almost as if they saved the economy at the expensive of most of the people living in this country. One good economic crash (provided the negative gearing was nerfed) would force all the "investor" type to sell up or face ruin. Despite the high cost of houses, in this country they appear cheap by global standards, that is cheap to buy for those overseas.

The house price crisis didn't appear overnight, its been creeping up on us for the past decade, as has the issues with power/water/oil pricing. I blame the liberals for starting all this.

ps: I happened to like 15% interest rates back in the 90's as I had $500 in the bank as a teenager, which went up rather quickly, its not all bad.
  cootanee Chief Commissioner

Location: North of the border!
Unlike the continent our economy isn't an island - indeed more like a sailing boat.

Listen to any independent commentator and you'll understand that there are lots of things that upset the boat. We don't know how the economy would be if the GFC didn't happen, or alternately China didn't shake it off as quickly as it did.

Labor does spend more/make less because it does seem to be in government when the world isn't the best (e.g. Japan entry into WW2/post war austerity, post-Vietnam War downturn/Arab Oil Crisis, Greed is good / tech bubble burst, GFC).
Liberals tend to pick up the subsequent global recovery with the electoral benefit that most people remember pain longer. Things are on the up, revenues rise, government doesn't need to spend and they accumulate surpluses.
People start feeling good, more altruistic and increasing likely to vote Labor... just in time for the world to have it's next crisis and that surplus to be used up. And so the cycle goes.

As if Hockey or Swan make any real difference Laughing

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