JC Political Thread - For All Things Political Part 2

[Calaber]

...stuff like that should have been done under Howard in the good years. What did we see though? Cutting of services, neglect of infrastructure, and handouts before elections saying he was "just returning your money"(not a JH quote just how I remember it) after being the highest taxing gov we've had. I bet you believe LNP's past claims, that we don't see now interestingly, claiming they'll keep interest rates low and Labor's will be high?

Whilst I am a supporter of the conservative side of politics, I have to agree that Howard's years saw little improvement in national infrastructure. The state of our highways, railways etc, is an indictment of many years of Government neglect from both sides of politics, but Howard definitely had the opportunity and the finances to have done something substantial. It is my biggest gripe with his term in office. My concern now will be that after the Coalition wins the September election, the national bank balance will be so bereft of money, we will re-enter a period of stagnation where nothing will progress beyond what is already under way. Abbott's commitment to fund major road improvements in Sydney only comes in around 1.5 billion but I wouldn't hold my breath waiting for the cash.

 

[yxyx64]

coz a deficit can be either be funded from reducing existing capital, or from taking on new debt. If funded from new debt then it had better be to pay for something important........otherwise just be happy with what you have......coz it is already paid for .

Can anybody tell me what the new govt borrowings will be used to buy for Australia?

hey Calaber...did you get a captive due to seat height?

 

[vr94ss]

Whilst I am a supporter of the conservative side of politics, I have to agree that Howard's years saw little improvement in national infrastructure. The state of our highways, railways etc, is an indictment of many years of Government neglect from both sides of politics, but Howard definitely had the opportunity and the finances to have done something substantial. It is my biggest gripe with his term in office. My concern now will be that after the Coalition wins the September election, the national bank balance will be so bereft of money, we will re-enter a period of stagnation where nothing will progress beyond what is already under way. Abbott's commitment to fund major road improvements in Sydney only comes in around 1.5 billion but I wouldn't hold my breath waiting for the cash.

If we take these numbers, because you can never believe the oppositions numbers, conflict of interests Australian governments have blown mining boom cash, say economists | News.com.au edit: It doesn't let the profligate Howard off either.

Most economists are tipping Labor's fifth budget will reveal a budget still deep in deficit - by as much as $10 billion in 2013-14 - as revenues continue to disappoint.

By as much as 10 billion. That's not a big deficit, other numbers put it at 3% of gdp. Considering what was bought with it I can easily live with that. If/when the LNP take over they will blame the previous gov whether it's warranted or not, both sides do that. Then the cutting and sell offs will start, the drawing back on public spending, NBN, education etc. Then considering NBN does not come out of revenue but bonds sold to investors I don't see it as a bad economic decision. Considering GFC is not really over yet, just the worst, hopefully.

Reasonable deficits are not the problem, putting people to work, encouraging more participation, creating tax payers is the key. No matter how much you cut, if you don't create the means to bring in taxes you are rooted, it's a spiral down. NBN for example is creating an industry, is paid for by private money(bonds), and would put Au on par with other developed Asian nations.

Bit pissed tonight, hope that reads as I intended.

 

[yxyx64]

again, deficit means you spent more than you made. It is a loss. You must fund a deficit either from capital reserves or from borrowing money.

Please someone tell me what the deficit is paying for that is so important to Australia that we need to borrow money to pay for it ......and pay interest on those borrowings that becomes money we cannot then spend on education or health.

 

[Calaber]

hey Calaber...did you get a captive due to seat height?

Off topic, but yes, that was a major reason. There were other issues which were equally important.

Now, back on topic.

 

[c2105026]

an issue with cutting back is that it can affect economic growth. Word is Abbott will not make any promises for further spending at the next election; he will bring in austerity measures.

if governments fund projects, it boosts overall economic activity. fund a highway reconstruction you will boost the construction industry. with NBN, you boost the IT/communications industry. If you strip the public sector by 200,000 people thats 200,000 people not spending money in their local communities, on cars, houses....we all suffer.

 

[monkeys437]

an issue with cutting back is that it can affect economic growth. Word is Abbott will not make any promises for further spending at the next election; he will bring in austerity measures.

if governments fund projects, it boosts overall economic activity. fund a highway reconstruction you will boost the construction industry. with NBN, you boost the IT/communications industry. If you strip the public sector by 200,000 people thats 200,000 people not spending money in their local communities, on cars, houses....we all suffer.

What do you think is the biggest threat to our economy between Austerity and Increasing our debt every year? I'm not disagreeing with you, I honestly can't pick which is the lesser of the two evils. Sure the government has done some good things (NBN) but I'm concerned that we're not getting value for money from our ever increasing budget deficit.

At what point does our level of debt get out of control and we have to start paying it back?

The way I see it, eventually one of two things has to happen. Less spending which has the drawbacks which you outlined. Either that or increased revenue through taxation which removes money from he pockets of business and workers which they would have otherwise contributed to the economy. No easy answer

 

[Calaber]

On TV today, Graham Richardson expressed the opinion that the GST must be increased to around 15% to enable governments, both Federal and State, to have adequate operating budgets to meet future needs. Obviously, this would be an extremely unpopular move nationally and is not likely to get up unless all States agree.

If the GST remains at 10%, Richardson says that income and corporate taxation must increase. Whichever option the Government takes, it will be unpopular, but would be the sort of action a new Government would take early in its term rather than closer to the next election. For obvious reasons, Gillard can't take taxation increases to an election because they won't get up, but will ensure she is consigned to the political dust-bin (if she isn't already checking it out for space). But Abbott, who is likely to win with a significant majority, could approach the problem within his first twelve to eighteen months, knowing that he is likely to serve at least two full terms before the cycle starts to swing back towards Labor. I can see significant cutbacks in expenditure, reductions in Public Service numbers AND taxation increases, all being part of a Coalition policy, simply because there will be no other option. To bring the budget back into balance within the first term by using cost-cutting only would mean that virtually nothing would be done as departments would be trying to operate within minuscule budgets. Services have to be maintained so they will be cut back less than other programs. Unfortunately, the infrastructure projects would be likely to get the chop very early in the first term and not be likely to be re-invigorated until the fifth or sixth year of a Coalition government, and then perhaps only on a limited basis. Projects such as a second Sydney airport, estimated around 10 billion, would just be consigned to the never-never again.

 

[DAKSTER]

I am not a Graham Richardson fan, but in this case he is right. The government needs to get income from somewhere and a broad based consumption tax is easily the fairest kind of tax. I would be wholly in favour of a higher GST as a revenue source.

The thing that bothers me though is that as you say, somewhere in the leadup to the end of a second term, assuming there is a second term, they will announce major spending. What they will do of course is announce they are spending $XX billion dollars over the next 10 years on some project, knowing they have a reasonable chance of losing anyway, just because thats what people tend to do in this country. So then, they will look good making all these promises, and not have to invest a huge amount of cash in the short term. That will leave them either winning the election, then scaling back the investment, or losing and leaving the next government holding the baby as usual.

Not being party political with that statement either, of course labour would do much the same thing.

I am being party political however in saying that labour would probably not interfere with an inherited project that has already begun and has had a major investment already made in it, provided it was something worthwhile.
Abbot on the other hand has already stated that the NBN will get major changes made to it, crippling it as a national resource and wasting the huge amount of money already spent on it, just to make a point.

I can also see such stuff as a return to school of chaplains and religious studies as part of a national curriculum under Abbott. That concerns me deeply.

 

[minux]

if governments fund projects, it boosts overall economic activity. fund a highway reconstruction you will boost the construction industry
with NBN, you boost the IT/communications industry. If you strip the public sector by 200,000 people that's 200,000 people not spending money in their local communities, on cars, houses....we all suffer.

The problem with the public service is that it is creating jobs that were never there for the sake of creating jobs. There are so many people employed in the public service that are simply a waste of money. There is no issue with government spending borrowed money on worthwhile projects but there has not been one worthwhile project by this government that has been costed accurately and not simply "jobs for the boys".

If any government can even think about stripping 200k of jobs int he public service sector then we seriously have a problem not in that all these people will lose jobs but the fact so many jobs have been created that are seemingly not needed!