Saturday, March 31, 2012

NDIS. Labor is poised for greatness.

If the reports are correct. Try to read this without crying.

"What is wrong with expecting that our children, regardless of impairment, can have a secondary education? What is wrong with expecting that our children can get jobs and go to universities and TAFE? What is wrong with expecting that you can get a wheelchair within 12 months of ordering one? How is it that in this federation of ours, when you move from one state to another, you have to hand your equipment back before you can move?"


Why Labor must support an NDIS

ALP National Conference December 3, 2011

Delegates, it is fashionable in some sections of the conservative media, in some of the far right of Australian politics and some of the far left of Australian politics, to say that Labor has had its day. That the issues upon which this movement was founded 120 years ago have by and large been accomplished and we’re in a new world.

Delegates, we know that there are many issues in Australia which still require the energy and the passion which only the Labor Party and movement can give it to change. And there is no issue, in my opinion, which requires the energy and the mighty power of the Labor Party any more than disability reform.

Three years ago I had the opportunity to become the Parliamentary Secretary for Disability Services. And I had thought, as a union official and an organiser, that I had seen disadvantage and unfairness. And I had. But nothing prepared me for the second class citizenship of people with disability and their families and carers, the second class citizenship in which they live.

Imagine if you can, if you would, if we built a city with very high walls. And into that city we put 1.3 million people, that being the approximate number of people with profound and severe disabilities. And into that city with high walls we put another half a million Australians, their families, their carers, the people who love them. And we said to those peoples within the walls of this city, that you will have a second class life in Australia from birth to death. If we said to nearly two million Australians that, in being in Australia and having an impairment, means you will not get an equal go in this country.

The people with disabilities and their carers know this. They understand this.

Imagine if you have a beautiful baby, and at about the 12 month stage, that child you love with all of your heart, doesn’t start developing and growing in the way you had hoped. Imagine the impact that has upon you and your partner, what will this mean? Perhaps you will feel a sense of optimism – it will be alright. But then you have to find a GP which understands what’s going on. Then you have to get a referral to a specialist. And then you get the news that your beautiful child, your beautiful child who you love and would do anything for, but you are going to face some challenges because your child has an impairment. And then imagine beginning the ugly, lonely search for childcare. For kindergarten. For therapy, for early intervention. To get the vehicle modified.

Imagine you walk down the street and your child has a high level of autism and is acting up, and other parents are look at you, and say ‘why are you a bad parent? You can’t control your child’ – when all it is that your child is beautiful, but has autism.

Imagine if you have a child with a physical impairment, and you’re standing in a park, and some other unthinking Australian says to that parent ‘why did you have this child?’ And imagine you have two children with a disability and some unthinking, ignorant fool says to you ‘why did you have your second child?’

Then imagine you search for a primary school, you have to make the choice between special school and mainstream. Imagine you are made to feel like you are a bully – because you want your child to get the integration support that your child deserves. Then you head to the search for a secondary school.

You know, once upon a time, hundreds of years ago, we were told the world was flat; that if you sailed to the edge of the world you would fall off. We’ve now learnt that the world is not flat. But if you are a person with an impairment or if you are the parent of a child with an impairment – your world is still flat. At each point in the cycle of life, you sail off the edge and have to start again. What is wrong with expecting that our children, regardless of impairment, can have a secondary education? What is wrong with expecting that our children can get jobs and go to universities and TAFE? What is wrong with expecting that you can get a wheelchair within 12 months of ordering one? What is wrong if your child has a spinal condition, which means they need a special bed , and that the bed takes so long, that by the time the bed arrives, the child has grown and you need a new bed?

How in this federation of ours, when you move from one state to another, you have to hand your equipment back before you can move? How is it that if you are in a motor car collision in Western Australia, and one car has Victorian license plates, and one car has Western Australian license plates, how is it that, if it’s a terrible injury some person suffers, an acquired brain injury, and they need to be fed through a straw. If they suffer severe cervical injury/spinal injury, how is it that the person, if you happen, by fate, to have a car registered in Victoria or New South Wales, that you will get a reasonable level of lifetime care. But in Western Australia - and it’s not just western Australia - because no-one can prove fault, you are stuck in the residual system. How is it that the manner of your impairment, that the method of your impairment, determines the level of your care?

This is a Labor issue. When do we allow two million people in exile in our own country, and when do we take down the walls of the city surrounding them, and say ‘please join the rest of our society'... Now this country is not too poor. We are an imaginative, we are a generous, we are a rich country. I believe that if you are born an Australian, or you immigrate to Australia - there’s a certain deal you get.

We are very fortunate, not just with the commitment of our Prime Minister, of our Minister Macklin and Parliamentary Secretary McLucas, and all of the other Cabinet Ministers.

We understand that there are no cheap options to reform disability. But I do believe this movement can be the conscience of the country. We are the movement who fought for the age pension. We are the movement who fought for the minimum wage. We are the movement who fought for Medicare and superannuation. And it is time to add a fifth pillar towards the basic safety net of this country.

In politics one is frequently cautioned against raising expectations. People with disability and carers, they don’t need their expectations raised; they know the lives they lead. They understand the fundamental formula: that an impairment is just one feature of the personality of the person. And they refuse to be defined by their impairment. What disables people in Australia is not the impairment, it is the barriers that the community puts in place. What disables people is a lack of power, and a lack of money.

The principle of a National Disability Insurance Scheme addresses the idea of a lack of resources. I do not look at a person in a wheelchair or a person with an intellectual disability, or an ageing parent or grandparent and think ‘you are charity’. You are a consumer – you are a voter. But there is a second layer that Labor people understand – that is that it is not enough just to have money – you also need to have power. There is a challenge here for the Labor Party – are we the people who will empower people with disability? Are we the people who will enrich the lives of people with disability? Some people say that disability is not a sexy topic – some people say that it’s too hard. Some people say that you can’t fund disability. They paint the picture of the well – and you lean over and you drop the coin in the well. And as you listen you never hear it hit the bottom. As if disability is an unfundable problem.

What this Government has done, and this Prime Minister has done, and this Ministry has done, is we have now said, that when you drop that coin in the well, you can hear it hit the bottom. It is not a cheap solution – but it is a possible solution.

This Government and this movement at this time, has said we can do something about disability, fundamentally, which will leave the place better than we found it. This is the generation of Labor to whom the responsibility falls, to be able to answer a promise to aged parents of beautiful adult children with disabilities. At the moment, when we talk to these people and some of them are here, I cannot guarantee that if they are no longer able to look after their child – that their child will be alright.

I believe that we are capable of the work being done, that we are able to look at the ageing parents in their 80s and their 90s, who are hanging on for one reason – to make sure that their adult child is OK.

I believe that we should one day be able to make the promise to those parents , it’s OK, your kids are going to be alright.

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Friday, March 30, 2012

Read Colebatch: "Swan's foolish surplus fetish"

In today's Age:

WAYNE Swan's determination to deliver a budget surplus, regardless of the state of the economy, is seriously reckless. Labor has chosen to risk sending most of Australia into recession in order to keep a promise it should never have made.

No Australian government has ever proposed such a huge withdrawal of spending from the economy. On his own published figures, Swan plans to take us from a deficit of $37 billion this financial year, perhaps more, to a $1.5 billion surplus in 2012-13.

On Treasury's estimates, that would take at least 2.6 per cent of GDP out of the economy in 2012-13. That is equivalent to shutting down the entire electricity industry, all arts and entertainment venues and all airline travel for a year.

Why on earth would you do this in an economy that has added just 10,000 jobs in the past year, where the growth rate is just 2.5 per cent, and most of that is in mining and related industries, and with Victoria and south-eastern Australia on the verge of recession?

What Swan is planning for 2012-13 goes far beyond any previous budget cuts. In 1986, the hairshirt Hawke-Keating budget cut away 1.1 per cent of GDP. The first Howard-Costello budget in 1996 took out 1 per cent of the economy.

Labor now pledges to deliver cuts two to three times as large as those landmarks of fiscal austerity - at a time when most sectors of the economy are already going backwards or sideways under pressure from the high dollar and low demand.

Swan says it will be OK because ''the economy is moving back towards trend growth''. Not if you take away 2.5 per cent of it, it won't be....

Continued here.

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It's raining men in the West. 'Cos the rest of us won't go there.

Suddenly it’s much harder to find work in Victoria. A year ago there were 3.6 unemployed Victorians fighting for each vacant job. Now there are 4.6.

The dramatically worse odds, revealed yesterday by the Bureau of Statistics move Victoria from being one of the easiest states in which to find work to one of the hardest. Only South Australians, with 4.7 unemployed per vacant job, and Tasmanians with 10.9 find it harder.

The slowdown is the result of a collapse in the number of jobs on offer - from 47,700 a year ago to 40,100 in February - and a jump in the number of unemployed Victorians looking for work from 170,400 to 185,300.

Over the past year the number of Victorian jobs has shrunk 48,500 at a time when the state’s population has swelled 84,000. Victoria’s unemployment rate has climbed from 5.0 to 5.4 per cent.

In contrast the odds of getting a job in Western Australia have continued to improve with only the number of unemployed locals fighting for each vacant job now below two at 1.8.

Although the mining states have the best employment markets, comparatively few of the Australia’s 182,000 jobs on offer are in mining. The ABS says the industry has 9,900 jobs vacant, compared to 12,000 in manufacturing, 14,000 in retail, 16,000 in construction, 15,000 in accommodation and food services and 22,000 in administrative and support services.

Very few of the 31,600 jobs on offer in Western Australia are being filled by eastern Australians crossing the Nullarbor... Other figures released yesterday show in the past year Western Australia’s population climbed just 7000 as a result of interstate migration. It climbed 34,700 as a result of overseas migration.

The direct sourcing of workers from overseas is changing Western Australia’s gender balance. Whereas the rest of Australia continues to have more women than men, Western Australia now has 37,800 more men than women - its widest gender imbalance in a century. West Australian men now outnumber West Australian women in every age group below 70.

Of the 14,000 Victorians who moved interstate in the September quarter, only 2200 moved to Western Australia. Around 4500 moved to NSW and 4400 to Queensland.

Interstate arrivals roughly balanced departures as 5100 new Victorians arrived from NSW, 4000 from Queensland and 2000 from Western Australia.

Victoria sourced most of its population growth from births and migration, gaining 82,600 extra citizens over the year to September, more than any other state. The NSW population grew 76,700, Queensland’s 75,500 and Western Australia’s 60,700. In percentage terms Western Australia recorded by far the fastest population growth, climbing 2.6 per cent compared to Victoria’s 1.5 per cent and Australia’s 1.4 per cent. Tasmania grew just 0.5 per cent.

ABS projections show Victoria’s population climbing from 5.5 million to 8.2 million by the middle of the century and Melbourne’s population climbing from 4 million to 6.5 million.

The Bureau says by 2050 Australia’s population should climb from 22.8 million to 34.2 million. Its highest projection is for a population of 40 million; its lowest for 30.3 million.

In today's Age

If you’re looking for work or looking for men, it’s best to head west. But very few people do.

New job vacancy figures show there are four unemployed NSW residents competing for each vacant job. In Western Australia, the best performing state, there are just two. Only the ACT, with 1.5 unemployed locals per vacant job, does better. But the ACT’s figures are somewhat misleading as many of the people who work and look for work in the ACT live in towns just outside of it.

Western Australia has 31,600 jobs going begging. NSW, with three times the population, has 52,600. But NSW residents aren’t heading west. They are certainly heading interstate. Interstate departures exceeded interstate arrivals 11,800 over the year to September. Out of the 22,000 NSW residents who moved interstate in the September quarter, just 2400 went to Western Australia. Around 9700 went to Queensland and 5100 to Victoria.

In the past year Western Australia’s population climbed just 7000 as a result of eastern state residents crossing the Nullarbor. It climbed 34,700 as a result of overseas migration.

The direct sourcing of West Australian workers from overseas has changed the state’s gender balance. Whereas women continue to outnumber men throughout the rest of the Australia, Western Australia now has 37,800 more men than women - its widest gender imbalance in a century. West Australian men now outnumber West Australian women in every age group below 70.

By contrast in NSW women outnumber men in every age group above 30. There are 64,900 more women than men in NSW.

The NSW population grew just 1.1 per cent in the year to September, well below the national average of 1.4 per cent and substantially below Western Australia’s 2.6 per cent. Although NSW continues to receive more migrants than any other state Western Australia is catching up, recording net migration of 10,800 in the September quarter, not too far below the NSW total of 11,300.

Bureau of Statistics projections show the NSW population climbing from 7.2 million to 9.9 million by the middle of the century and Sydney’s population climbing from 4.5 million to 6.7 million.

The Bureau says by 2050 Australia’s population should climb from 22.8 million to 34.2 million. Its highest projection is for a national population of 40 million; its lowest for 30.3 million.

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3101.0 6354.0

Thursday, March 29, 2012

How bad are Australia's unemployment benefits? Bad and getting worse.

A report on inequality to be delivered to Treasurer Wayne Swan this morning will label Australia’s welfare system one of the best and most efficient in the developed world, with the exception of unemployment benefits which are the worst relative to community standards and shrinking.

The report, to be unveiled just after Mr Swan takes the stage at the Council of Social Service annual conference in Sydney finds family payments for the low paid Australians are the highest in the OECD. But the Newstart unemployment benefit is the lowest as a proportion of the typical wage.

“Unemployment payments fell from 46 per cent of median household income in 1996 - a little below a conventional relative poverty line - to 36 per cent in 2009-10, a long way below such a poverty line,” University of NSW professor Peter Whiteford says in the report.

Whereas NewStart and the age, disability and carers pensions were once roughly similar, different methods of indexation adopted in 1997 mean the gap is now more than $230 per fortnight, with a single unemployed person getting only 65 per cent of what he or she would get as a disability pensioner.

“This gap cannot narrow over time, it can only grow,” the report says. “The result - if actually continued for 40 years - would be that in 2050 a single unemployed person would be receiving a payment of about 11 per cent of the average male wage, compared to 20 per cent now. An unemployed person would be receiving a payment that was little more than one-third that of a pensioner.”

Newstart increases in line with the consumer price index while pension payments increase with average male wages. The Centrelink website says this means Newstart grows “in line with increases to the cost of living” but the claim is false because the cost of living for beneficiaries has been climbing faster than the CPI...

“Since 1998 the special analytical price index for beneficiaries has risen by about 5 per cent more than the CPI, meaning using this measure their real incomes have fallen,” Professor Whiteford says in the report.

Although Australia’s employment to population ratio is one of the highest in the OECD, prior to the global financial crisis Australia had one of the highest concentrations of joblessness in households where no one works. Around half of Australia’s jobless were living in completely jobless households compared to 22 per cent in the United States and 20 to 30 in much of Europe.

Asked about the pension and Newstart at the National Press Club this month Mr Swan acknowledged there was “a case about the gap that has opened up,” but said: “How we can deal with that in the longer term is a difficult one given that the fiscal pressures and so on the government is facing”.

In today's Age

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Wednesday, March 28, 2012

Is superannuation dangerous?

Me on ABC891, April 4

9 minutes, play or CLICK THEN CLICK AGAIN to download mp3

TONY DELROY: Where's it best to keep your money?

You'd be forgiven for answering "under your bed".

In the year to the end of February the typical super fund made 0.1 per cent.

That's right - next to nothing.

February was a good month. Over the year to January the typical super fund lost 1.45 per cent.

It's happening in part because the funds are following conventional wisdom in investing heavily in shares. Over time they are said to perform better than anything else.

But do they? And are our super funds dangerous?

Our Wednesday economics correspondent Peter Martin joins us to discuss new thinking and an alarm sounded by the former head of the Treasury Ken Henry.

Peter is economics correspondent for The Age and the Sydney Morning Herald and joins us from parliament House in Canberra...

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A time-poor paradox: Busy people play sport

We’re in a time-poor paradox. When asked why we don’t play sport, the Bureau of Statistics says we commonly blame “lack of time” or “working too many hours”. Yet it finds those of us who play sport the most work between 40 and 50 hours per week.

It finds 88 per cent of Australians working 41 to 48 hours play sport in their spare time, compared to only 79 per cent of those working part-time 16 to 24 hours.

Commuting time is also said to make it hard to take part in amateur sport, yet the Bureau finds participation in sport the highest among the Australians who commute for more than hour to work each day. Those who play sport the least work at home.

Quality of life researcher Bob Cummins at Deakin University believes it’s to do with how work makes us feel rather than the hours it takes from our day.

“People who work more than 40 hours tend to be in jobs they like,” he says. “When people feel good about themselves they tend to feel good about engaging in physical activity.”

“At the other end people who work short hours are often not in fulfilling jobs and not where they want to be. If they don’t feel good about themselves they might not feel up to playing sport.”

The Bureau also finds that people who play sport feel safer and are more likely to agree that people can be trusted. More than half of the sports players surveyed said they felt safe when when walking alone after dark. Only 33 per cent of non sports players felt safe.

Professor Cummins believes the Bureau has identified a virtuous circle...

“If you don’t trust people, you are unlikely to feel good about playing sport with them; but the more you do it the more your trust will grow and the fitter you’ll become making you more confident about walking after dark.”

The Bureau finds 76 per cent of men and 72 per cent of women play sport regularly. Around 80 per cent of Australians aged 35 to 44 play regularly and 60 per cent of Australians of retirement age and over.

In today's Canberra Times, Sydney Morning Herald

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The ANZ may set its own rates, but we control the overall level - Reserve

The Reserve Bank believes that it, rather than retail banks controls the general level of Australian interest rates, notwithstanding moves by the ANZ and other banks to adjust rates independently.

Addressing a global investment conference in Sydney assistant governor Guy Debelle said the decisions made by his board each month remained “the primary determinant of the funding costs and lending rates of the banking system in Australia”.

While “obviously things like risk premiums and competitive pressures move around,” when the Bank moves its cash rate “the whole structure of funding costs tends to move up or down with it”.

Dr Debelle said it would surprise to people outside Australia to learn that the funding costs of Australian banks made front page news on a fairly frequent basis.

But the Bank takes “account of the fact that competitive pressures and risk premiums move around, and by-and-large tries to offset the movements so we end up with a level of interest rate which is consistent with the desired stance of monetary policy”.

While overseas funding costs climbed in the second half of last year before retreating somewhat early this year, much of the pressure on bank funding costs came from the rates they offered to Australian depositors.

Although the Reserve Bank cut its cash rate 0.50 points since November the banks cut the rates they offered to depositors only 0.25 points.

“In other words, relative to the cash rate the cost of deposit funding has gone up by 0.25 points,” Dr Debelle said... “Since the middle of last year funding costs for the Australian banking system have fallen in absolute terms, but generally unappreciated is that most of the funding pressure has come from the deposit side of things.”

So attractive had banks made deposits that they now accounted for more than 50 per cent of their funding, up from 40 per cent before the global financial crisis. Within that total higher-rate term deposits had climbed from 30 per cent of bank funding to 45 per cent.

Despite this the Reserve Bank still set the overall stance of rates with the link between movements in its cash rate and lending rates “much tighter than in many other countries."

In today's Sydney Morning Herald and Age

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Tuesday, March 27, 2012

Antony Green is on to something. Why we are voting more thoughtfully

Labor would be left with not a single seat in Queensland if the state voted federally the way it did Saturday night.

ABC election analyst Antony Green says the numbers point to a federal wipeout for Labor in Queensland, with no seats remaining - not even those of the deputy prime minister Wayne Swan, the trade minister Craig Emerson or the former leader Kevin Rudd.

But he says there’s no reason to believe Queenslanders will vote the same way.

“You only need to look at 2001 and 2004. In 2004 Labor got smashed in Queensland federally when Mark Latham was leader, absolutely smashed. Yet earlier that year Peter Beattie won the state election for Labor with a massive landslide.”

“The same people who were giving John Howard huge majorities federally were voting for Bob Carr in NSW and Peter Beattie in Queensland.”

Green believes Australians increasingly treat state and federal elections differently, with the federal voting intentions much more stable...

“People still vote on habit, but more and more that’s only evident at federal elections. At state polls you see massive swings.”

“I suspect that’s because state government is about managing things - making sure the trains run on time and roads are built. State governments are rewarded or punished for performance, whereas at the federal level it’s along more ideological lines.”

Macquarie University election specialist Murray Goot agrees but says the importance of the Queensland vote is that it shows Labor is not gaining any votes.

“If one or two Independents lose their seats at the next election Labor will need to gain seats n order to survive. It is now extraordinarily difficult to see that happening,” he says.

Antony Green says if the swing against Labor in Queensland was to be repeated at the federal election Labor would have much more to worry about that Queensland.

“In 2010 labor had a swing against it in NSW that didn’t cost it any seats, it had a swing to it in Victoria. If it did lose another 7 or 8 per cent in Queensland at the next federal election it would lose its remaining eight seats, but it would get slaughtered in NSW where many more are held by thin margins.”

“People keep saying the next election could be lost in Queensland. My view is that if it is lost in Queensland it is not going to be lost in Queensland alone. There’s no point in moving campaigning to Queensland.”

In today's Canberra Times, Sydney Morning Herald


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Monday, March 26, 2012

Technical note: The employment-to-population ratio is sliding

Remember those headlines in January about 2011 being the worst year for jobs growth in two decades? (I wrote some of them.)

Since then all manner of people have said - ah yes, but population growth was low, so looking at the employment-to-population ratio, the growth wasn't that bad.

The ABS appeared to lend weight to that view in a paper published in February.

But the paper never actually made that claim.

An FOI seach (for which the ABS generously did not charge) has unearthed a graph used in the genesis of the ABS paper but not published in the paper.

It shows that on an employment-to-population ratio basis, 2011 was the second-worst year for job creation in two decades.

Not enough to invalidate the headlines.

2011 was a rotten year however you look at it.

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You're better off with your super in equities, right?

That's the conventional wisdom.

Ken Henry and others think it is dangerous.

At macrobusiness Jackson has run a Monte Carlo simulation.

The results:

The median (50th percentile) super fund does better in equites than it would be in fixed interest.

But the 25th percentile fund is worse in equities than it would have been in fixed interest.

As he says:

"The distribution is far more spread for equities, both to the high and low end. If you’re an optimist, it’s all roses in equities. If you’re a pessimist, or just plain unlucky, then maybe you want to bolster your portfolio with something a little less volatile."

There's more. A typical retiree would be better off ignoring the traditional advice about moving from equities to fixed interest in their last decade of work.

Should the Super Industry Invest More in Fixed Interest - Ken Henry

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Abbott will make it a bit harder to foreigners to buy farms

The Coalition will propose a much tougher line against foreign takeovers of Australian farms in a discussion paper to be unveiled within weeks.

Detailing for the approach for first time opposition leader Tony Abbott said the present threshold below which takeovers were waved through was far too high.

“At the moment there’s only consideration of agricultural land or agribusiness purchases over about $240 million,” he told Sky News. “That is a very high threshold. There are a few agribusinesses worth that much, but there is almost no parcel of land worth that much. Effectively agricultural purchases are exempted, as things stand, from Foreign Investment Review Board scrutiny.”

The new stance is a win for the National Party members of parliament who have argued for a threshold as low as $10 million which also takes into account cumulative purchases.

Asked at a Senate hearing in February whether a foreign investor who acquired ten $30 million farms in a year would breach the threshold, Foreign Investment Review Board chairman John Phillips said it would not, adding the exemption as “an anomaly”.

New Zealand restrictions are based on how much land a foreign buyer would end up owning rather the the size of purchase...

Mr Abbott said the scrutiny was needed “not because we want to knock back lots and lots and lots of investments, but because the public needs to be confident that these investments are in fact genuinely in Australia’s national interest”.

The Coalition would also set up a national register of foreign land holdings modelled on Queensland’s.

National senators Barnaby Joyce and Fiona Nash and Liberal senator Bill Heffernan have been pushing for tighter rules while Liberals including South Australia’s Jamie Briggs have been arguing against restricting foreign investment.

Trade minister Craig Emerson has warned the Coalition’s proposed changes put free trade deals at risk. Australia’s agreement with the United States allows US investors to buy land parcels worth up to $1 billion before facing scrutiny.

In today's Sydney Morning Herald and Age

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Friday, March 23, 2012

$275 million buys how many jobs? With Holden we don't know

Okay. Here's what we do know:

Holden will continue to make cars in Australia in return for $275 million, but can promise nothing about jobs.

Standing alongside Prime Minister Julia Gillard after agreeing to launch two new models over the next ten years Holden managing director Mike Devereux said if he knew where the Australian Dollar would be, what his competitors would do and where interest rates would be he might be able to work out how many workers he would need, but if he knew those things he “wouldn't be running a car company”.

Holden will enter into a binding contract with the Australian government to build two new “next generation” cars at its Adelaide plant between now and 2022. It will maintain a design and engineering team, at present employing 900 people at Port Melbourne, but the team will “localise” international designs rather than create Australian designs fromt he ground up.

Mr Devereux would give no guarantee the 900 jobs would remain. The Australian Manufacturing Workers Union said Holden had told it to expect redundancies...

Without the commitment of $215 million from the Commonwealth, $50 million from South Australia and $10 million from Victoria, Holden would have stopped making cars in Australia after 2016.

Ms Gillard told parliament Holden was “part of the Australian identity”. There had been a “real risk” it would go, endangering the futures of all of the 55,500 workers employed making cars in Australia and the more than 200,000 employed in supporting industries.

Premier Ted Baillieu would not confirm Victoria’s payment to Holden, believed to be $10 million, along with another grant of $10 million to a separate fund to develop new markets to automotive suppliers - because it would set a precedent that could be used to lever funds out of the government on future occasions.

He said the government was concerned about the 900 staff at Port Melbourne and also about engine plant employing 400 people which services manufacturers all aroudn the world.

Asked if the Port Melbourne jobs had been guaranteed, Mr Baillieu said he would leave it to Holden “to go into the further detail”.

Ian Jones, national secretary of the AMWU vehicles division, said Holden had begun a study to decide the future of the engine plant. It had recently rebuilt, and its performance was ‘‘outstanding’’.

‘‘I would be surprised if we weren’t able to map a future,” he said.

Coalition industry spokeswoman Sophie Mirabella said she was not "averse" to support for the car industry, but couldn’t support the deal until she knew the details.

Other Coalition members have questioned continued support for the industry and it has an official position of refering questions about future support to the Productivity Commission.

Mr Devereux said “regardless of what you hear” both sides of politics understood the importance of maintaining a car industry.

When signed, the “binding contract” with the Australian government would be hard for either party to get out of.

He did not yet know the type of cars that would be built under the contract.

“Today we are working the V8 Commodore which we will launch in 2013. These other cars won’t be launched until the second half of this decade. Frankly the size, the weight, the feel, hasn’t even been invented,” he said.

Holden would invest than $1 billion as a result of the $275 million pledged by the Australian governments.

Ms Gillard said the pledge was a “co-investment” rather than a handout.

Mr Devereux said said it would create $4 billion of economic activity.

“That’s $4 billion injected just by Holden alone - no multiplier effect, no funny math, just straight economic activity that Holden will drive into this country,” he said.

In addition the multiplier effect would be “unmatched”.

“This is the bedrock of basic manufacturing, being able to make a tool, whether that tool is to make a car or is used in the mining industry, these are the type of cornerstone things that make the auto business a very good investment for the Australian people, he said.

In January the Commonwealth and Victorian governments entered into a $103 co-investment deal with Ford to keep the company's Melbourne plant open until 2016.

In today's Canberra Times and Age


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Wednesday, March 21, 2012

The circular bike track. Our hastily-assembled stimulus program

A bike track that goes round in circles probably isn’t what Bob Brown was thinking of when he levered $40 million out of the government’s stimulus program to be spent on bikeways as part of a “major new investment in public transport”.

Applicants for the funds were meant to demonstrate how the money would create alternative transport options. But the auditor general has found the Department of Employment never assessed applications against that criteria and didn’t always rank them according to employment criteria.

One grant of $179,682 allowed Queensland’s Sunshine Coast council to build an 850 metre long, five metre wide circular track for competition cyclists to do laps. Instead of being funded up to 50 per cent by the Commonwealth in accordance with the guidelines it was 100 per cent funded.

The auditor general finds the department “did not undertake any analysis” of each application’s ability to contribute to the program’s stated objectives and had “no processes in place” to compare claims of jobs created.

Instead it identified projects as either meeting all of the criteria or not and then handed all of them - both those that did meet all the criteria and those that did not - to the then minister Julia Gillard or her assistant minister asking the minister to circle ‘approved’ or ‘not approved,’ “regardless of whether the department had assessed the project as meeting all criteria”...

Although approved by Cabinet in October 2009, many of the projects continued well beyond the global financial crisis. More than 80 per cent missed their due completion dates. The final $2 million of payments was sent out in June 2011.

The auditor general found that while most applications for funds came from Labor electorates, approvals for funds did not disproportionately favour those electorates.

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If you're fed up with paying an obscene amount to use a credit card...

If you’re fed up with preparing to pay for something and then being asked to pay extra when you reach for your credit card, relief is at hand. The Reserve Bank thinks it went too far.

It’s ten years since the Bank allowed retailers open slather to impose whatever surcharge the market could bear. On the whole it is pleased with the results. One third of merchants now charge for using cards and at least another third are considering doing so. Visa and Mastercard have cut what they charge the retailers by 0.60 percentage points as a result, which is what the Bank intended.

But the bank now thinks some of the charges are too high. “There significant anecdotal evidence of some surcharging that is not reasonably related to the cost of acceptance,” assistant governor Malcolm Edey told a cards and payments conference in Sydney yesterday.

The Bank is drawing up a new set of rules that will allow card companies to limit what merchant charges to the costs actually incurred by the merchants.

In the gun will be the 10 per cent charge imposed by Cabcharge... and similar companies for using credit cards to pay taxi fares and the $7.70 charge imposed by Qantas. Reserve Bank data shows the cost to the merchants is typically 0.81 per cent.

“We should not view this change as a panacea that will do away with every consumer complaint,” Dr Edey said. “What it will do is empower the schemes to take action where surcharging is clearly excessive.”

The bank is also concerned about weaknesses in the system of internet transfers between bank accounts. Transfers can take up to a day rather than minutes and a lot of special numbers are needed to make them work.

“I can pay someone with a cheque when all I know about them is their name,” Dr Edey lamented. “But if I want to make an electronic payment, I typically need to know a 6-digit BSB number and a 9-digit account number. People are finding partial workarounds that make use of mobile phone numbers or email addresses, but we are yet to have a truly seamless system.”

Reserve Bank board minutes released yesterday show the Bank unconcerned about the private bank's independent rate hikes in February. “The increases were relatively small, largely confined to housing loan interest rates, and did not materially change the current stance of monetary policy,” the minutes said.

In today's Sydney Morning Herald and Age

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Tuesday, March 20, 2012

It's come to this. Each pension increase is now twice each dole increase.

Happy 20th! you get the extra from today.

You’ll be a bit better off if you’re unemployed from today, doubly better off if you’re on the pension.

The increases - $3.35 per week for the pension but just $1.45 per week for NewStart - reflect a widening in the gap since the once-similar benefits were first indexed differently in 1997.

The pension is now one-third bigger than NewStart and is set to grow bigger still as it increases with average male wages each six months while NewStart climbs with the consumer price index.

“The gap will widen to $132.90 per week with this new round of indexation,” said Australian Council of Social Service chief executive Cassandra Goldie. “ Newstart and the sole parents allowance should be treated like the age, disability and carer pensions. More than 100 organisations and 400 individuals have so far signed a statement supporting more equal treatment.”

In today's Age

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Glenn Stevens is perplexed - he thinks we're doing rather well

Glenn Stevens is perplexed. Australians think less of their country than foreigners; a slight slowdown in China’s hypersonic growth rate has become a “major talking point”.

Addressing an Asian investment conference in Hong Kong the Reserve Bank governor said “viewed from abroad” Australia suffered only a relatively mild downturn in 2008-2009, made up the decline in within months, and continued to expand ever since.

But structural change brought on by the high dollar had fed a “sense of concern in some parts of the Australian community, and the tendency to focus on the difficulties rather than the opportunities”.

“This difference in perceptions between foreigners and locals is quite unusual,” Mr Stevens said. “For most of my career the difference has tended to be in the opposite direction. We always seemed to struggle to get foreign observers and investors to give us credit for performance we thought was pretty reasonable.”

While consumers responded to the higher dollar by heading overseas, some Australian producers found it threatening, correctly seeing it as a “global and ephocal shift”.

“Some sectors of the economy will grow in importance as they invest and employ to take advantage of higher prices. Other sectors will get relatively smaller. Structural adaptation is hard work. Few volunteer for it. But we have little choice but to do it,” the governor said.

While Mr Stevens did not rule out further cuts in interest rates in order to lift an economic growth rate he said was “only moderate”, he did rule out the use of interest rates to lift the maximum possible growth rate.

"Monetary policy cannot raise the economy's trend rate of growth," he said... "That lies in the realm of productivity-increasing behaviour at the enterprise, governmental and inter-governmental levels. This is increasingly being recognised in public discussion, but it is important we do more than just debate it."

Nor could monetary policy “obviate the pressure for the production side of the economy to change”. The exchange rate was “essentially given to us by the world economy” it was “not driven by any policy in Australia.”

Concern about the slowdown in China’s rate of growth was overblown.

“From 10 per cent to a mere 8 per cent! This is a major talking point and some see it as portending a major crash,” he said. “But some slowing was required to reduce inflation and put growth on a more sustainable path.”

“Even at the new growth target of 7.5 per cent, a lower target than in the past five years (all of which were, of course, exceeded) Chinese GDP will equal that of the United States, in purchasing power parity terms, in about a decade. It will exceed that of the euro area within the next few years.”

In today's Sydney Morning Herald and Age


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Monday, March 19, 2012

Monday reading - the tragedy of the Commonwealth public service

Some of our public service is great, top notch. But much of it...

Russell Hill's war on accountability

Markus Mannheim
Canberra Times
Saturday March 17, 2012

I don't know retired major-general John Cantwell; I've neither met him nor heard any notable anecdotes about him, other than that he enjoys motorbikes and plonk. But I suspect he's a pretty funny bloke. He let rip last weekend against two of the defence ministers he served: Joel Fitzgibbon (''an auto-electrician in a suit'') and Stephen Smith (''had no respect for those who chose to serve in uniform for their country''). In doing so, he unleashed a storm that still threatens Smith's career. Yet I'm convinced it's all part of an elaborate joke on Cantwell's part.

The giveaway is that he criticised Fitzgibbon for failing to understand the Defence white paper (Cantwell said he had to re-explain to the minister what ''had already been simplified to the point of banality''). Fancy that: a member of the defence establishment lecturing on the merits on plain English. The hilarity here is that Cantwell is talking about a report, co-written by a massive team over several years, whose meaning remains a mystery to the defence forces themselves. Just ask the three services, each of which has an entirely different understanding of the white paper's priorities.

But comprehension is an optional extra in Russell, and long has been. The military's pay manual (which, like everything else, is referred to unnecessarily by its acronym, PACMAN) has more than 2000 pages, and comes with an extra ''administration and technical explanation'' of more than 500 pages. No one really understands it, which no doubt explains the military's constant pay cock-ups.

Then there was last year's Black review of defence accountability. Among its advice was this beauty: ''Defence can improve its capability outcomes by progressively tightening the boundary conditions around the capability development process, improving top-down incentives for better capability delivery in an environment of capped budgets and extension of the current use of integrated project teams … across the end-to-end capability development process.'' And that gobbledygook was the summarised version. An organisation concerned about accountability would have hurled the report back at the consultant and refused to pay for it until it was at least vaguely intelligible. Instead, Defence is now busily ''implementing'' this nonsense. And because no one can grasp its meaning, no one will be able to accuse the department of failing to ''action'' it.

A senior public servant once described Russell to me as ''a decades-long meeting that hasn't ended, because they're still working on the agenda''...

Read on...

Fear & Loathing In The Public Service
Martin McKenzie-Murray
Feeding the Chooks
March 16, 2012

In my mind, Australia produces far too many mid-level managers—too few people capable of producing anything but petty fiefdoms built with bloody-mindedness and banality. They are not our future leaders, investors, novelists, architects because of idiocy and inanity; sloth and a diseased imagination. But they flourish because the public service naturally rewards pedantry and a waning sense of dignity.

What happens is a self-generating vortex of spin and bromides because the culture of the public service—petty territorialism and covering your arse—means the best gatekeepers are those with the least amount of imagination.

Experience—even an interest in—media and politics is unnecessary. It means that the professional touchstone is caution, not excellence, making it the perfect province for the inane. The mantra becomes “Don’t worry about the outcome, worry about the process” as so the word “process” comes to have an eerie, cultish quality because it’s the fig-leaf which covers the rank inadequacy of so many.

Watching Bob Carr’s first press conference something stirred in me which must have been similar to the pleasant shock of recognition Argos had of his old master and chum Odysseus upon his return. “Ahhh, who is this?” I thought. “A politician speaking with warmth and wit; clarity and comfort.” Laura Tingle tweeted from the presser “I’ve worked out what feels so weird… a minister (almost) who isn’t talking in spin speak”. Mr Carr will considerably raise the communicative standard.

And that’s the point: the bully pulpit is powerful—use it. The influence of a talented, passionate, articulate Minister trumps so much of the dross pumped out from the bowels of departments. And it’s cost effective, for chrissakes. Millions of dollars are spent on the salaries of communications people with no discernible talent, influence or professional worth. It’s a fact. More money is spent on people who literally have nothing to do.

The so-called “efficiency dividend” announced last year caused some consternation in Canberra—the cutting of 1.5% of spending on Federal jobs and services. In truth, the cut could be much larger—but the scalpel taken directly to the communications areas, rather than across the board. See, the cuts weren’t as discriminating as they should have been.

In Senate Estimates a few weeks back, the National Library, National Gallery and the National Film and Sound Archive detailed the losses they’d experienced because of the cuts: reduced retrospective cataloguing, reduced services, reduced staff, reduced public events and an increase in charges for those borrowing between libraries. Similar attrition was felt by the other two organisations.

Let’s move—sensibly—towards surplus. Let’s not, in the memorable words of Doug Cameron, “fetishise” it. But if we want to rush towards surplus, increase the efficiency dividend. Halve the budget of communications teams or, better yet, don’t rely on them. You can do so with absolute assurance that the public good will not be damaged. What’s more, you might be preserving the opportunity for Australians to view the works of people who actually produce things.

Read the full thing...

I hope you enjoyed.

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Friday, March 16, 2012

Jobs. Mining comes into its own, behind health and aged care

And it seems to shift the geographical focus of other jobs


Jobs gained: Year to February

Health and Social Care +48,700
Mining industry +44,600
Public Administration and Safety +34,600
Rent and Real Estate + 23,200
Education and Training + 17,800
Financial and Insurance +13,600
Agriculture, Forestry and Fishing + 7100
Media and Information Technology + 7100
Professional and Scientific Services +1900
Electricity, Gas Water +1800

Jobs lost: Year to February

Construction - 3100
Administration and Support - 5100
Arts and Recreation - 8300
Manufacturing industry - 23,900
Wholesale Trade - 29,900
Retail Trade - 35,100
Transport, Postal and Warehousing - 46,100
Accommodation and Catering - 59,400

ABS 6291.0.55.003

The mining industry has lept into second place as the nation’s biggest provider of new jobs behind only health and aged care.

The industry boosted its numbers 44,600 in the year to February taking the number of Australians it employed from 205,100 to 249,700.

Although two-thirds of the new mining jobs were in Western Australia and Queensland, NSW did well gaining an extra 8700, South Australia gained 3100 and Victoria 2000. The Australian Capital Territory - not often thought of as a mining employer - boosted the number of its workers recorded as being in the industry from 100 to 300 in what the Bureau of Statistics cautions is an unreliable measure.

Although Australia’s biggest employing sector, health and aged care put on more workers than mining, employing an extra 48,700 Australians in the year to February, the extra bodies scarcely moved the total which remains 1.3 million when rounded to one decimal place.

Health and aged care overtook retail as Australia’s biggest employer in 2009. Retail slumped further in the year losing 35,100 workers, most of them in Victoria. The currency-hit accommodation and catering sectors lost 59,400 workers, the transport, postal and warehousing sectors lost 46,100 and the wholesale industry 29,900.

Manufacturing was down 23,900 over the year but rebounded in the second half as 17,900 new positions were created in Western Australia.

The national employment figures confirm a shift west and north in employment... Western Australia gained 54,000 workers and Queensland gained 24,000 in a year in which Victoria lost 34,000 and NSW 30,000.

Even industries without an obvious connection to mining are doing most of their growth in the west and north. Western Australia and Queensland between them took on 45,700 of the 48,700 extra health and aged care workers. Queensland took on 14,000 of the 17,800 extra education workers.

Queensland gained 16,900 finance sector workers as Victoria lost 16,300. Western gained 5300 as NSW held firm.

The figures show part-time jobs growing at the expense of full-time jobs and women gaining jobs at the expense of men.

Australians with jobs appear to be putting in fewer hours. The Bureau of Statistics reports that only 10 per cent of full-time workers worked more than 60 hours a week in the most recent quarter – the lowest level in two decades. The proportion working more than 40 hours a week slipped to 40 per cent, also close to the lowest in two decades.

Separate Reserve Bank research released yesterday found wealth more evenly distributed in 2010 than it was in 2006 as a result of the damage inflicted by the financial crisis on the holdings of the richest Australians.

In today's Sydney Morning Herald and Age

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Our coking coal. India's next - RBA

Australia is in the box seat to take advantage of an explosion in Indian demand for coking coal, Reserve Bank research suggests.

The Bank’s assessment of India’s steel industry came as JP Morgan Chase spoke of a “hard landing” in China and said it had already started.

The research by Markus Hyvonen and Sean Langcake from the Reserve Bank’s economic group finds that India is now the world’s forth-largest steel producer, after having been 10th-largest as recently as 1995. But it says relative to the size of India’s economy its steel consumption remains low.

India has large reserves of relatively high-quality iron ore and is likely to be able to feed its growing steel industry without any need for imports. importing iron. But its reserves of coking coal reserves are “quite small and tend to be of low quality, needing to be blended with higher-grade imported coal”.

India is now the third-largest importer of coking coal and has become the second most important destination for Australian coking coal behind Japan...

Although India’s national steel policy had identified the need to further develop non-coking coal methods of production such as electric arc furnaces, its existing capacity meant coking coal was likely to continue to play a role in the development of the local steel industry and “drive further demand for Australian coking coal in the future”.

China would be demanding less Australian cola because it was already in a “hard landing” JPMorgan Chase & Co.’s chief Asian strategist Adrian Mowat said yesterday.

“If you look at the Chinese data, you should stop debating about a hard landing,” he told a Singapore conference. “Car sales are down, cement production is down, steel production is down, construction stocks are down. It’s not a debate anymore, it’s a fact.”

Chinese premier Wen Jiabao said this week home prices are still far from reasonable levels. His comments fueled concerns the government would maintain restrictions on the property market even if they threatened to slow economic growth.

“One should be concerned about what’s happening in the China property market,” Mr Mowat told the Singapore conference. “People are too complacent.”

Yale University professor Stephen Roach, a former non-executive chairman for Morgan Stanley in Asia, said concerns about a hard landing were “vastly overblown.”

“I don’t think the banking system will collapse and the property bubble will burst,” he told a conference in Shanghai. “These are all exaggerations.”

Greens Senator Christine Milne said yesterday both China and India were openly discussing moving away from coal.

She moved a motion calling on the government to require the Bureau of Resources and Energy Economics to review its modelling “based on the current geopolitics of coal”. It was defeated along party lines.

In today's Sydney Morning Herald and Age

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Thursday, March 15, 2012

"Things are getting worse, but the shoping's good" - confidence survey

It’s hard to credit. We feel bad about our finances but good about shopping.

The latest Westpac Melbourne Institute consumer sentiment survey finds an extraordinary 43 per cent of us believe our family finances have worsened over the past year, way in excess of the 19 per cent who believe they have got better.

But asked whether “now is a good time to buy a major household item” 50 per cent say it is; only 27 per cent disagree. Asked whether now is a good time to buy a car 44 per cent say yes and only 22 per cent no. Asked whether it’s a good time to buy a house 48 per cent say yes and 28 per cent no.

Westpac’s chief economist Bill Evans has an explanation for the paradox.

“When we ask whether now is a good time to buy, people say ‘yes’ because stuff is cheap on account of the high dollar. But that doesn’t mean they’ll do it.”

“We have found actual purchases to be much more closely related to how they feel about their finances, and people are worried"...

The latest retail figures show spending growing at a trend rate of just 0.1 per cent per month, much lower than the rate of inflation. Stores such as Dick Smith and JB Hi Fi whose prices have been held back by the high dollar, report disappointing sales.

Although wages are holding up and unemployment is fairly steady Dr Evans believes falling house and share market prices are making families nervous.

“If you have a lot of debt and your asset is performing well you will be confident, but if you’ve got high debt and your asset is under-performing, you’ll be worried about your finances and less prepared to spend, he says.

The consumer confidence index slid 7.7 per cent to 96.1 in this month’s survey, dipping below the neutral of 100 where optimists balance pessimists.

“The awkward thing for the Reserve Bank is it is now back below where it was before the Bank started cutting rates in November,” said Dr Evans. “Moves by the retail banks and global concerns have offset everything the Bank has done.”

“The weak jobs market is also biting, even though it is not yet showing up in the unemployment rate.”

“Last year was appalling for jobs - the first time since 1992 we failed to expand employment. The only reason unemployment didn’t rise was that men walked away; construction workers and manufacturing workers gave up rather than add to unemployment.”

The survey shows a sharp switch to caution in managing savings. Only 5 per cent of those surveyed now believe the share market is the wisest place for savings, down from 12 per cent a year ago. The proportion believing a bank is the safest place has climbed from 27 to 35 per cent.

In today's Sydney Morning Herald and Age

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Trusts are here to stay (more's the pity) - Treasury

The planned shakeup of the tax treatment of Australia’s 660,000 trusts is now unlikely go ahead of the next election on July 1 2013 as had been promised.

Treasury official Graeme Cuxson told the Tax Institute’s national convention there was a case for delaying the start date and the Treasurer would soon announce an amended timetable.

“If - and I note that it is an if - there is a later start date, it will allow for more time for consultations,” he said.

Treasury wanted to stress that trusts were “a legitimate way to arrange financial affairs”.

“Trusts are here to stay,” Mr Cuxson said.

Asked about an attack on the use of trusts by Labor senator Doug Cameron who raised the use of trusts by the "super rich" including the children of mining magnate Gina Rinehart at this week’s caucus meeting, Mr Coxon said whatever changes came out the review would be broadly revenue neutral.

“This is not about wholesale reform, this is not a crackdown"... he said. “It is about easing compliance costs.” The rules governing the taxation of trusts were decades old failing to take explicit account of the introduction of the capital gains tax in 1985.

Treasury's approach would be to “follow the money”, or more accurately to “follow the economic benefit” - taxing the entities that benefited from trusts rather than trusts themselves. It would not be taxing trusts as companies as was recommended by the Ralph review of business taxation in 1999.

It would release a discussion paper on the taxation of fixed trusts in the next few months.

In today's Sydney Morning Herald and Age

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Wednesday, March 14, 2012

How aging will change things

Me on ABC891, March 14, 2012

11 minutes, play or CLICK THEN CLICK AGAIN to download mp3

I'm on Adelaide's ABC 891 every Wednesday at 10.00 am AEDT, 9.30 am central time.

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What a ship of fools. Leigh on the Coalition's hatred of Treasury

When your numbers don't add up, attack Treasury; when your ideas make no economic sense, attack economics

From parliament yesterday. It's worth printing and reading.

Matter of Public Importance – ‘The urgent need for market-based reforms and strict and transparent budgeting’ Andrew Leigh, March 13 2012

"Today’s matter of public importance is on the need for market based reforms and the need for strict and transparent budgeting. I want to start by talking about market based mechanisms in dealing with environmental challenges. This used to be a pretty controversial area, and in fact the first person to raise it was none other than George HW Bush, who suggested that we might deal with environmental challenges by putting a price on the externality. He faced objections, but the objections at that time came from the Left. It was those on the progressive side of politics who took some time to come around.

But, from the very beginning, as you can see in such important documents as the honours thesis of the member for Flinders, the Right was signed on. The Right understood intuitively that this was a good way of harnessing market based mechanisms, that the choice of market based mechanisms would provide a more effective way of dealing with environmental challenges. That view still holds sway among conservatives in many countries. If you go to the United Kingdom, you will find a conservative party committed to the use of market based mechanisms to deal with climate change. If you go across the ditch to New Zealand, you will see the same thing: conservatives who understand that price mechanisms beat direct action. It was true in Australia when those opposite went to the 2007 election promising to put a price on carbon pollution, and it was true until that famous tipping point in Australian politics, the one vote in the coalition party room that tipped the coalition from good economics into populism.

When it comes to water pricing, the coalition rejects the use of water markets. But, of course, it was not always this way. Moves towards water markets were enhanced when the member for Wentworth was the relevant minister under the Howard government and when he was the Leader of the Opposition he supported carbon pricing as the most efficient way of dealing with climate change. But it is not just in the area of market based reforms that this side of the House are the free marketeers. When it comes to listening to economists it is the Gillard government that takes economic advice when it comes to preparing our budget. And when it is pointed out to the Leader of the Opposition that he cannot find a single economist to back his direct action scheme, he attacks Australian economists. When he finds that he cannot find a single Treasury official who is willing to back his election costings, he goes and attacks Treasury...

Let us go through what happens with the coalition’s 2010 election costings. When they went to the last election the coalition used a private accounting firm, WHK Horwath and the member for North Sydney said at the time that the two accountants from that firm had certified ‘in law that our numbers are accurate’. He told ABC Radio in November 2010:

‘If the fifth-biggest accounting firm in Australia signs off on our numbers it is a brave person to start saying there are accounting tricks.’

And he said:

‘I tell you it is audited. This is an audited statement.’

The member for Goldstein strongly vouched for the costings, saying they were ‘as good as you could get anywhere in the country, including in Treasury’. But, in fact, we now know that that document was a one-page report produced two days out from the election and it was the result of a carefully worded agreement between the accountants and the coalition to produce work that would be primarily not of an audit nature. As Peter Martin pointed out in the Sydney Morning Herald last December, that led to two $5,000 fines plus cost orders for the accountants that had prepared these dodgy costings for the coalition. So you would think that, after all of that, the coalition would take a deep breath and would say, ‘Well, clearly, using private accounting firms didn’t work for us last time and we have the $11 billion black hole.’ For a little while it did actually look as though the coalition were going to learn. A bipartisan parliamentary report on the Parliamentary Budget Office backed it in. It was backed by the member for Higgins and Senator Joyce. But it was only when they realised that they had a hole in their costings—a hole that emerges when you are the kind of opposition leader who says yes to every special interest and no to every tax increase—that the coalition decided they had to back away from a parliamentary budget office. So they backed away from having a parliamentary budget office in what I have to say was one of the most extraordinary late night debates in this place that I have been involved in. The members for Goldstein and Mackellar began attacking the institution of Treasury and Treasury secretary Ken Henry, who, as members know, was appointed by Treasurer Costello to that position. The member for Mackellar said:

‘This Parliamentary Budget Office is something that is simply linked to the coattails of Treasury.’

She went on to say:

‘I made the point that Treasury and the head of Treasury had been rewarded for things that they had done to assist the government.’

The member for Goldstein said very boldly of his costings at the last election:

‘There was no black hole. This was a politicised black hole. This was something fabricated with the use of Treasury officials to give the government a political advantage.’

These were the outrageous attacks on a great Australian, one who has served Australian economic policy making extraordinarily well, and on a great government department, one that has done valuable work in producing good economic policy.

When those opposite are faced with an independent Treasury who finds an $11 billion black hole in their costings, they go and attack Treasury. Those opposite are like a rich kid who, when his maths teacher says, ‘No, I think you’ve got an answer to a question wrong here,’ goes to the principal and says, ‘Can we get the maths teacher sacked, please.’ They are all noblesse oblige. But, of course, these days those opposite are probably wishing they had a black hole as small as $11 billion. Their black hole is now $70 billion. That is the equivalent of stopping the pension for two years or stopping Medicare payments for four years.

It is not just I pointing this out. The opposition leader likes to visit various Canberra based businesses, but when he visited CRT Building Supplies he got a little bit more than he bargained for. Steve Bailey, who I would like to point out is not a member of the Greens Party or the Labor Party, heckled Mr Abbott about his $70 billion black hole. He said:

“I think he doesn’t care for the people on low incomes; he cares about people like Gina Rinehart and Clive Palmer. He’s out for the big boys not the little people like us. It’s a media opportunity for him, it’s a stunt with no substance.”

The Leader of the Opposition is happy to use my constituents as a political backdrop for his media stunts. He is happy to go along to local schools and trash Australia without once mentioning that he voted against the new school buildings that he is probably sitting in at the time.

It is Canberrans who would suffer most if the coalition were to win office. The member for North Sydney likes talking about the 12,000 Canberra public servants whom he would make redundant. Originally he liked to say this was from natural attrition, but he has given up that one lately and he is now talking about getting rid of whole departments. The department of climate change is on the chopping block. As for the department of health, the member for North Sydney says there are 5,000 people there and he does not know what they do. There are two answers to that. The first is he could ask the Leader of the Opposition, who was the minister for health when the Howard government was in office and when the department of health also employed about 5,000 public servants. Otherwise he could actually pay some serious policy interest to the things that the department of health are doing. I am waiting for the member for North Sydney to have his Rick Perry moment: ‘I’d like to get rid of three departments—the department of climate change, the department of health and that other one that I can’t quite remember right now.’ But I am sure the member for North Sydney will think of a third department to get rid of.

It is deeply ironic that the member for North Sydney is out there speaking about job security and about the Australian economy. If he is interested in job security he might want to have a good, hard talk to the 12,000 public servants that he intends to make redundant. But frankly they are still $70 billion short. Even after firing those 12,000 public servants they need to find some other way of getting there. The shadow minister for immigration has suggested a novel way of getting there. He has decided that, when he is going to get costings done, rather than go to accounting firms, he will go to catering firms, because it was catering firms that did the opposition’s costings for Nauru. That is an innovative scheme that might well get the opposition there—McDonald’s may well have some interest in costing the opposition’s health policy. It really does reflect much of what those opposite think of budgets. They think that government is an all-you-can-eat: you can just go out there and have it all. You can eat everything; worry about dieting—worry about where the money is going to come from—tomorrow.

We have also seen in recent days a really troubling development: the abandonment of countercyclical fiscal policy by those opposite. Those opposite have now said that they would not have put the Commonwealth budget into debt during a downturn. It is very clear what that would have meant. A no-debt position means that when your revenue write-downs come—let us not forget that two-thirds of the debt that Australia took on during the global financial crisis was revenue write-downs, not stimulus—you are going to pull the government back. Not only are you going to fail to prop up the private sector, you are going to do exactly what the private sector is doing—you are going to follow them down into the downturn. There is a precedent for that: Herbert Hoover during the Great Depression. This is why the Great Depression didn’t last a year or two, but a full decade. Those opposite are the Herbert Hoovers of economic policy. It is no great surprise, really, because they are led by somebody who, in the words of one of his predecessors, John Hewson, is genuinely innumerate. As John Hewson said, ‘He has no interest in economics and no feeling for it.’ Or as another coalition scion, Peter Costello, said when speaking of the Leader of the Opposition: ‘Never one to be held back by the financial consequence of decisions, he had grandiose plans for public expenditure.’ A former cabinet colleague of the Leader of the Opposition said, ‘He’s just spend, spend, spend.’ Another said, ‘He never really understood the meaning of fiscal conservatism.’

Those opposite are constantly out there with their economically illiterate plans, talking down the economy. The Australian economy now enjoys goldplated AAA credit ratings from the three major agencies. When was the last time that happened? It has never happened before. This is the first time in Australia’s history that we have enjoyed a AAA rating from every major ratings agency. So when you hear those opposite speaking about the state of the Australian economy—trash talking the Australian economy and trying to damage consumer confidence—it is important to remember what they say when they are overseas. When the opposition leader leaves this country, he says, ‘Australia has serious bragging rights. Compared to most developed countries our economic circumstances are enviable.’ That is absolutely true. I only wish that they would say when they are back in Australia.

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