Friday, April 20, 2012

Wrong, wrong, wrong: Gillard, Hockey, Robb

What a week.


Her speech on the "economic" arguments for the surplus is not yet on the web. I'll put a link here when it is.

She says: "Friends, let me make this clear once and for all: a budget surplus is not a political target but a potent economic tool."

And then proceeds to elaborate (emphasis added):

"A budget surplus speaks of confidence in Australia’s creditworthiness and good economic management...

"So the best way we can demonstrate to global investors that we are a sound place to invest is by the strength and resilience of our economic institutions and policies.

No signal is more powerful than a strong and disciplined fiscal framework.

A budget surplus when the economy is growing also speaks powerfully to the Australian community about having a government that manages their money prudently.

Okay, okay - it's about public relations, not economics despite what you say. I never believed otherwise anyway.


He seems unaware of just how targeted Australian social spending is. Here, Matt Cowgill enlightens him. This graph tells the story as well as anything else:

Professor Peter Whiteford says “Australia actually has the lowest middle or upper class welfare in the OECD”. And he should know, he used to work in the OECD.

But one of the most targeted social support systems in the world isn't good enough for Mr Hockey, as he explained on LateLine:

TONY JONES: Okay, I'm only going to interrupt you there to allow you to expand on that because you give a very passionate defence in the speech of the system in Hong Kong, for example, where the top rate of personal income tax is 17 per cent, the top corporate rate is 16.5 per cent - the trade off there being that there's no social safety net, so, instead, people take care of their own families.

Would you - do you think that's a model that could be followed in Australia?

JOE HOCKEY: I wouldn't go so far as what Hong Kong is doing, but Hong Kong is our competition, Tony. This is the thing. If we talk about the Asian century in Australia, if the Government talks about the Asian century, then the Asian countries are our competition, our children's competition.

We can no longer compare ourselves with Europe and the United States, which have massive fiscal and structural problems. And I keep alluding to Hong Kong because Hong Kong is our direct competition, as is Singapore, as is Korea in different ways, Vietnam, Indonesia. They're our competition in many ways.

TONY JONES: OK. The logic of what you're saying is that you would quite like to see Australia move part the way in that direction - lower personal income taxes, much lower company taxes as well accompanied by a lowering of entitlements, which is the only way you could afford it really. Is that correct?

JOE HOCKEY: Well, in part. I mean, it's also the case that you've got to drive productivity growth and that's something that we've spent a lot of time talking about.

As I Tweeted during LateLine the following night:

You opposed means testing of the Private Health Insurance Rebate @JoeHockey #LateLine #auspol

You opposed means testing of the baby bonus @JoeHockey #LateLine #auspol

You said families taking in over $150K deserved government support @JoeHockey #LateLine #auspol

It's about as credible as the man who (mis)administered the Access Card coming over as a believer in privacy. Oh, he's done that too.


What compelled him to go on AM and implicitly back the ANZ's rate rise with trusting garbage such as this?

SAMANTHA HAWLEY: So is the ANZ bank justified?

ANDREW ROBB: Well I'd have to look at their books.

You know, they're not stupid and I don't think they would willy nilly put up their margin like this if they weren't - if they weren't suffering a problem with their margins.


ANDREW ROBB: You know, they're not - They are responsible citizens. Their books in the end will be on the table, their profit margins and all the rest, so...

SAMANTHA HAWLEY: The ANZ bank made a pretty decent profit didn't it, last year?

ANDREW ROBB: No, but it's the return on capital and things. I mean look at banks that are heavily part of superannuation funds - millions of Australians depend on the banks performing.

The ANZ's return on equity is 14.88 per cent. Talk about a culture of entitlement.

But Robb trusts them. Oh, and he wants to be Minister for Finance.

What a week.

Related Posts

. Does a surplus make sense? Colebatch has Wong on the ropes.

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

. What the Bankers Association means when it says bank profits are "middle of the road"