Sprigs of hope in the Gillard gloom

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Only another 129 days to go; I hope for the sake of the small business sector in this country, they can hang on. Where I live in NQ, things are becoming very grim with little forward orders or work for a lot of business. Staff are being retrenched everywhere. Bligh has sent Qld broke, now Gillard is consigning Oz to the same pain & suffering; it is to be hoped that the Coalition can hit the ground running with some intelligent major infrastructure projects ready to roll on day 1, otherwise I fear even worse for the economy in 18 months time !

Employment - tick
Productivity - tick
Debt low - tick
Future productivity thanks to Gonski - tick
Future productivity AND immediate spending rise thanks to NDIS - tick
Damn I wish we had a better govt

Dear Daniel
Not sure what you are going to do when you are retrenched from Gillard's 2000 strong taxpayer funded Media Unit when she loses power . Do not bother applying to any SME as you do not live in the real world.

Forgot to say
Sense of entitlement that everyone should buy from my overpriced underserviced shop

Hope springs eternal Robert.. There is a cup.. And it's half full..

Whilst I admire the sentiment, I don't hold as much optimism that the factors you have highlighted, will turn out as you suggest.

China is in big trouble...

We must have a local project of size ready to roll. That means one already going but badly done. The NBN roll out comes to mind.

Robert. The latest episode of Gillard 's Madness is to incorporate councils, those tin gods that look after our local roads, foot paths and collect our garbage, in the Australian Constitution.

As it is we are over governed, thus our economic woes and heading for a Zero interest future. I hope your Sprigs of hope flourish .

As Whitlam once said "IT"S TIME"....... to put the other megalomaniac out of economic harms way.

Vasso, wouldn't it be terrific if the LNP were to roll out the "It's Time" jingle as part of their election campaign this year. How bloody ironic.

You have to be kidding. The rise in share market prices that began in mid 2005, stalled briefly in 2006, and then continued into late 2007 resulted in the mother of all crashes in late 2007, which became the GFC in 2008.

Since then we have had a very slow genuine rise, with one minor peak after another being followed by dead cat bounces. Those who have made money have in general not been long term investors, but gamblers playing the price oscillations, and who have managed - largely through pure luck, to get out in time during an upswing. What you are looking at is a roulette wheel that statistically will sometimes produce what appears to be a run of good luck. As in Monte Carlo, casinos never advertise losers - except to call them “unwise persons playing beyond their means”.

I cannot see what real substance there is in any of this. Australian manufacturing has been shipped overseas so many shares are in companies with little more than administrative offices here. Changes in legislation overseas would reduce these companies to being offices with management staff doing nothing, office juniors with no orders to follow, and the cleaners. America is no better.

What’s left? - the myth that an incoming Right Wing Government would have such shock-jock rallied support from the workforce that they would be willing to carry on living on credit cards to pay for food and rent, and for the action of arriving at uneconomic jobs. Or is it the belief that an upsurge in discontent could be illegalised by legislation and repressed by police, and if necessary the use of troops. History says that such policing action is made popular through the creation of a scapegoat, generally immigrants and the adherents to minority religions.

I think the mythology that Australian media has allowed and even encouraged is dangerous. Occasionally a little reality is allowed to seep through - currently in the suggestion that Abbott will not last long as Prime Minister, but to me you are playing with fire. You seem to forget that the expectations you are creating in the richer elements of society are as nothing compared with what expectations are being fired up by the self-same propaganda in the workforce. And there are more of them.

It seems what you are really proposing is an antagonistic society in which the rich and powerful has the upper hand. But if you succeed what will be the result other than the need for the rich to live in security compounds? - as has happened in countries like Italy. And if you fail, what then? - the de facto social contract will have been broken and the forces in control then would have no reason to protect the excessive wealth that sought to crucify them

Robert - I think your recovery is nonsense - a figment of the Wagnerian imaginations of the desperate. You seem to be pressing for the unleashing of what you regard as “competition” as if it were a constructive rather than a destructive force in Australia’s present situation.

I think we need co-operation and consensus. That is an offer that is on the table - Think twice before you sweep it away. Think perhaps of what generally happens to the scapegoat when it all goes horribly wrong.

Excellent commentary Phil. One that steps away from the Blue Team Red Team bias and focuses on reality and the bigger picture for Australia.

We need to focus on what is best for all Australians not just the 1%. If you have less than a hundred million dollars, this is you.

The short term media cycle and opinion pieces masquerading as news has to change. I would like to see more hard hitting questions from journalists to BOTH sides of politics.

I think you are right here Phil...the RBA interest cut [ insiders like Bill Evans saying it will go down to 2% in 12 months] shows that a small country like ours owing a lot of money overseas has very little control over its destiny in a world wide depression.
Same thing during the Great Depression...we had to fall in line and do as we were told by the large economies.
For retirees the RBA cash rate going from 4.75% to 2.75% in the last 2 years...this is a 42% cut in income.
It would be different at the other end : from 10.75% to 8.75%..it would only be an 18.6% cut in income.
And if Bill Evans is right [he's been very right so far] and the RBA cash rate goes to 2%,then the fall from 4.75% to 2% is a 58% drop in income.
Even the well-off with $1,000,000 would have earnt $57,500 two years ago,which is about $37,500
now and $30,000 by next year.As a couple,that would be less than the old age pension.
The boomers are a large cohort and will be in austerity mode...unable to help the economy...all drawing on the old age pension.

Mr Gottliebsen seems to have missed reading the Victorian budget. Infrastructure spree my fat clacker.
In addition, The Gottlieb's nod to a low interest rate environment is negated when Governments use PPP's to fund infrastructure building. The fact that state governments like Victoria can borrow at around 3% is meaningless when they channel funding through PPP's, with their marvellous Cost of Capital gouge. Low interest rates mean Jack when you don't borrow at that rate. The Desal plant in Victoria is still carrying around a 14% CofC in its charges to Victoria. If the Vic Govt had any financial sense, at all, they would exercise the contractual option available and buy back the Desal plant, using funds borrowed against the state's credit rating. That move alone would return NPV of $12B to Victoria's asset base.
If the state doesn't capitalise on the low rate environment, and chooses to hand the financial gain to the "Private" bit of PPP's, then we'll build high cost infrastructure and pass the cost on the users. And, we'll build a lot less of it. "Spree"? You're kidding.
This entire article is a sham. More puff from the puffed meisters. Go and read the Victorian budget, Mr Gottliebsen and write something realistic that doesn't stink of the proprieter's agenda.

David - agree with you about the travesty of PPPs. They are a lazy government's solution to infrastructure development that transfers wealth, but not risk, to the big banksters and costs the public a fortune in the end. The biggest problem is that the Victorian Labour governments have embraced them as fully as the Liberals, leaving nobody to vote for on this issue.

A Brabet I too would like to see less media bias particularly from the ABC which we all pay to produce never ending left leaning panels and rabid anti coalition commentators like John Faine.

Robert -- if you know of a better 'ole, go and find it! The 'Gillard Gloom' is a manufactured item designed and delivered by Mr Murdoch and his business acolytes, as in America, to whip up the conservative prejudices of a population made poorer by the previous financial antics of the speculators. After all this time the pot continues to call the kettle black even though the promised economic disaster has failed to materialise in either nation. Still, the vicious anti-progressive propaganda has failed to dislodge Barack Obama despite his being lumbered with a stonewalling Congress, and Ms Gillard seems to be made of even sterner stuff, having been assailed from within as well as by the Opposition. Both leaders have made valuable policy contributions in safeguarding most of their people -- and a government must act to protect the majority! -- from the worst effects of their reckless predecessors' caressing of the minority business sector. The voters here may prove as discriminating as their peers in the USA when it comes to seeing through all this cynical special pleading.

To O'Leary - I sincerely hope you are right. I am voting for ALP. They have looked after the economy pretty darn well and I cannot abide the Libs' idea of austerity and teaparty like ambitions.

Susan, the economy is likely to be in trouble during the next few years regardless of who is in power. We're basically a quarry that also dabbles in selling each other houses as a hobby.

When China slows down - note the when, not if - we're in big trouble. I don't have faith that any of the government options really have much of a plan apart from the usual populist rubbish.

Sadly plenty of truth in that!

Robert, your credibility sinks lower with every piece you write now. You seem to have fallen into the trap that because you're well known, a player, you don't have to worry about journalism anymore and can get away with politically leaning thought bubbles. If this commentary is genuine, then you really need to start thinking about retirement. Do you really think Abbot's magic fairy dust will suddenly open peoples wallets and fix the global economic malaise? It's true your not alone, I know many people in SME's that believe Gillard is the source of all their woe's and that a change in goverment will fix everything, but rather than feeding this fantasy, maybe you should try to focus on reality. The good ole days of a asset bubble, credit binge is not coming back for awhile, no matter how much we hope a change if government might change this. Retail businesses in particular, have to accept the new norm and either adapt or die, that is the way of the market. If you're sitting on your hands waiting for a change of government your business is already doomed.

I think you are a bit optimistic Rob, personally at this stage, though there is still plenty of time till Spetembre, I WONT BE VOTING FOR TONY ABBOTT, unless Mathias Cormann comes out of his silence with something on the age pension and progressive retirement that we can believe rather than previous comments from the coaliton when it was in government or just after indicating there would rather get rid of the age pension, and favour more super for the rich, few can afford to take advantage from.

For policies infrastructures development I think it's more like Costello, with the budget the end game and selling the silver, no vision no skills, just empty slogans, if he is as good for the economy as plans for seniors we should get worried.

Despite all this, ONE THING COULD CHANGE MY MIND, a liberal for WA party would attract my vote, given WA supplies $41b to the Commonwealth coffers with only $9b of Grants for Health Education Roads etc...in return compared to its own State receipts collection of $16b and given the MRRT insulting attitude of Canberrists regarding WA royalties or developing infrastructures in WA, the State with real growth that's keeping the Australian economy growing.

Hank & Pratico
And there are no extreme left wing views and articles in this forum, try reading the Kouk and you will see what I mean. As for having items deleted, I had the temerity to have a go at the Kouk yesterday and mine was certainly removed. Geoff Croker replied to it when it first went on but alas deleted. We live in a democracy and it is good to see both sides. Deal with it.

Firstly, extreme left wing would be support for the Greens and the Kouk does not fit into that category. Is it too much to ask for the bar to be lifted? A well researched and argued article shouldn't be left or right, it should just be factual. Propaganda from both sides hurts the national debate.

I had a comment deleted on Monday because I repeated something spectator sk said on inside business on Sunday.


not sure why you're being so unfair and blaming Gillard for the sorry state of the gas market in NSW.

I'd argue BOFa has much more to do with that via his arbitrary 2KM veto of any CSG exploration and production.

Both Libs and ALP probably need to take equal share of the blame for allowing so much of our gas resources to be siphone doff overseas when we desperately need them to remain competitive.

Shooting the messenger with Gobbledygook for stating the obvious is astounding. I reread the article and can't find a bone of contention.

Vasso the first point is a no no
"And so my first optimistic sprig comes from the decision of the Gillard government to drop the proposed tax cuts and lift the medical levy. I can’t remember a government going into an election that has ever taken such actions."
Increasing taxes without growing the cake first is a no no in our current situation, the exact poison that kills Europe economies, one need to have a brick in the head not to see that.
NO MORE TAXES, on business, households, income, STOP ...
.Instead look for resource all development("real") with real jobs.

Francois , really low interest rates is already a tax on retirees and savers.

Yes and the real rate of return is negative too.

Europe economy is like feeding vitamins to a prisoner dragging a 50kg chain attached to its feet in the hope it can walk faster but it just can't walk anymore, so time to remove part of the weight not to increase it.

Francois I would have thought that the first sprig is pessimistic for Gillard, in that dropping the tax cuts will deter voting for Gillard and instead vote for abbott and thus optimistic for Abbott, in line with the gist of Robert's article.

OK he may have intended that, but it just did not work that way, I like Rob articles, he often has some genious findings such as Bernanke and the mortgage purchase, or the two speeds economy we often mention in the West albeit about all of us getting in the slow speed, why we try to have growth in the West.
In the case mentioned above we are talking of virtual things one one side and real increase in tax take of the worst kind on the other, Gillard should have been crucified for daring such a thing given all this NDIS cost increase was already budgeted a long time ago(see budget 2009 papers link below), just a matter of shifting spendings from one side of government to another side.
Anyone increasing any tax in our current circumstances, and that includes the coalition should be crucified and portrayed besides a Europe Tax Monster lying on the ground with little chance of recovery, another point mentioned by Rob, I was there people get poorer and poorer, Europe will suffer a long time more because of its high level of taxes we are aiming for, it will have to reinvent itself or die slowly with the cash in hand.


Well, Humbug, you do yourself a disservice by grouping all the Euro economies in the same basket. Simple fact of the matter is those Euro economies with the highest tax rates are the ones doing best. It is the ones with poor public revenue systems and easy rorts and transfers that are being hammered. While many might like to dream of tarring all of Europe with the same brush, it just ain't so.
Uncomfortable as it may be, the constant destruction of public finances is what destroys sovereign economies (e,g, tax havens). Extraction economies fail the great mass of their people.
As for us being a high tax jurisdiction, well, the facts just don't support the premise. What we are is a transfer economy, with a swag of distortions in the tax system which slant investment away from the wondrous free markets, so enthusiastically spouted by all who fell in love with Milton Friedman's nonsense (which was hegemony dressed up as economic liberalism, nothing more).
If the last 30+ years of massive wealth and income gaps being continually widened is still being defended relatively successfully by the plutocrats and their brethren, then any intellectual gravitas has been cast on the 4 winds of short term political influence of the likes of the owner of this previously august publication.
Adam Smith continues to churn in his grave at the fundamental dishonesty and bastardisation of his, essentially, sound thinking. Even Lincoln heralded the demise of his nation off the back of corporate influence.
Liars and thieves are in ascendancy and no amount of gobbledegook about taxes can camouflage the trend. Democracy is dying.

Think you should look at France, and wake up from your dreams, at 58% of Receipts to GDP France Socialism can only create Subsidise temporary/ casual jobs, the UK with a debt it can't repay, or Ireland with its long queues like France looking for work, apart from Germany nothing much is left standing in Europe.
The Centre Right plutocrats, Giscard, Schmidt and Barre filled up the coffers and produce with State Entreprise, the Airbus, the HST, Renault Mack Jeep now partly sold, and many infrastructures and higher living standards without accumulating debt or any privatisation, just worth thinking, they were great economists, not marxists or Tax101 legalmentarians.

Another points about the Plutocrats, if we can call them by this name because their families happen to have larger businesses or banking connections, have supported the participation plans and supply of shares to workers may have profit from.

Airbus is also Airbus industries University, Renault and its F1 Engines have 3% shares owned by employees and about twice as much in public shares own by management or former management, My father run a medium size business with 80% of its staff made of seniors and I develop software and application helping several hundred people with disabilities, but it was for a Scandinavian company with Scandinavian unions, t means just a different worldview, specialy strategic planning I learn also in part from a Scandinavian Organisation and from the Harvard Business Program.

You need business and lateral thinking to create Jobs, the State does not create them from the Budget rank and file, profit and P/E is not apocryphal.

Regardless of whom wins government Australia is headed for tricky time. The problem is that Australians have it so good for so long that any little trip and they whinhe and whine, the business sector is the perect example of this, their constant greed for more and more is spell bounding.

Get used to it folks everyone has been living beyond their means all on borrowed money and now is the time for rebalancing. Learn to adjust and live or perish but I certainly won't be giving a dam what happens.

The Liberals are not going to abolish the carbon price, or so they say. They have recently been saying that they will replace the incoming cap and trade ETS with a baseline and credit scheme. This is still a carbon price, and one that also requires a fair bit of bureaucratic support. There is no way of avoiding costs of emissions reductions - (and even doing nothing will cost us). The question is how to do it most efficiently and cost effectively.