Just How Bad Is It For Tony Abbott?
Pleiades sent in a couple of Crikey articles, one by Alan Austin and another by Guy Rundle.
The Coalition that promised in 2012 to reduce Australia’s debt by $30 billion delivered in 2014 an increase of more than $60 billion. Clearly Prime Minister Tony Abbott and
Treasurer Joe Hockey have failed spectacularly to reduce Labor’s “skyrocketing debt”.
Outcomes for the full calendar year 2014 are now online at the Finance Department’s website. Commonwealth monthly financial statements show year-to-date net debt and the projection for the full financial year. Hence it is simple to calculate the debt incurred — or repaid — each month.
Australia’s net government debt — that is, money borrowed minus money loaned out — was $239.16 billion at the end of December. This was a hefty increase over the level a month earlier of $224.35 billion. In just one month, the debt rose almost $15 billion, or 6.6%. Compounded, that rate would double the debt in less than a year. Fortunately, the December rise was abnormal.
So what was the full-year increase through 2014?
At the end of 2013, the actual net debt was $177.74 billion. Hence the increase over the full year was $61.42 billion ($239.16 - $177.74). That’s a rise of 34.6%.
A timely reminder that not only does this government actively break promises, it also allows circumstance to passively break their promises. The likely outcome of an Abbott 'austerity' was credited by many (and has contributed greatly) to the current low interest rates. It's almost like a report card that the cuts are too hard when the RBA cuts interest rates to record lows. Governments usually like to take credit when interest rates are low, but in this instance it can be firmly placed upon the heads of this government as another example of how they are mismanaging the economy. Yes, in the olden days of the 90s, the Liberal Party could get away with painting the ALP as the party of high interest rates which hurt borrowers. If we are to hoist them by their own petard - because we can - this is a government that has allowed the economy to sink so low that everybody has been forced to speculate on borrowed money. They have not really contributed greatly to the economy which is drifting through a post-GFC global context.
All of which is to say, this is a woeful government that is under-performing the even lowered expectations given to a government led by a man who has a very tenuous grip on reality. Worse still, whoever takes over has got a major chore on their hands because Tony Abbott has already removed revenue generators such as the Mining Rents Resource Tax and the price on Carbon.
The Rundle article goes through the woes of Tony Abbott himself, and describes just how big the gap is, that exists between Tony Abbott and reality. It's a cool article and hidden behind a pay wall, but I want to quote this interesting bit here:
But the gold stamp goes to Nick Cater, Saul/Paul of Essex University, the lost sociology grad and BBC lifer, who found his purpose in the lucky culture, his wholly imaginary projection of a pious religious-imperial society onto contemporary Australia. Cater’s task is difficult. He wants to blame Abbott’s problems on the “Abbott-haters”, tweeting with their elite thumbs, for the bad press. Sadly, he has to deal with two lost elections, polls underwater, the collapse of Abbott’s personal approval rating, Coalition MPs moving motions against Abbott’s own laws. How does he do it? Psychology. It’s not Abbott who is so deranged as to be dysfunctional, it’s the public. They have fallen prey to, and I quote, “confirmation bias”, “the ostrich effect”, “reactive devaluation” and “availability cascade”. Jesus. Once a redbrick university sociology 2:2, always a redbrick university sociology 2:2. You have to be impressed by someone trying to prove that the entire voting public, the “kamikaze Right” — including the 2IC of the Howard government, apparently — and the Abbott-haters on the Left are all delusional because they disagree with a man who knighted Sir Prince Philip.
Well, this is a moment, ain’t it? The Right has abandoned the crappy faux-populism of “anti-elitism” and played to its strengths, which is a hatred of the demos. This is clearly connected with the fact that the demos is going Left, from Syriza to Spain’s Podemos to, however, fainter a splash, Victoria and Queensland
Indeed, it is a moment.
The indication today, as the turmoil keeps roiling the Coalition Government, is that Tony Abbott simply must go - which is not a surprising conclusion to arrive at if you've watched the man for any amount of time. Pleiades rang me up to tell me that even loyal Abbott supporters are saying on air that Abbott needs to go. My guess is that he doesn't have the month.
Infrastructure And Privatisation
One of the frustrating things about any discussion to do with privatisation in this country is that the government usually sells off an asset that then turns into a monopoly or a doubly which price fixes to maximise profits from something that used to be a government service. It's no wonder that the electorate no longer buys the narrative that privatisation is good. The track record on privatisation is very mixed, and if electricity prices are any gauge, it's like handing the keys to a bunch of greedy operators so they can gouge people senseless.
And so, we come to this debate that if the government doesn't sell assets, it can't raise money to build more infrastructure.
I would be in favour of privatisation if the money raised was going to be used to build actually useful infrastructure like a metro system or high speed rail. A bunch of tollways seems like eminently the wrong thing for which to be aiming. All the same, when Tony Abbott says he wants to be an Infrastructure PM, well, he means tollways and lots of them. And this is the same guy who is putting an axe to the original NBN. How screwed up can you get?
So I think the narrative that the voters are revolting against privatisation is probably faulty. They're revolting against the utter lack of consultation by governments that ram through more tollways with minimal community consultation. Quite simply, these are not the infrastructure projects we need. Ignoring that problem deservedly turns into voter revolt.
It can't be that hard to understand.
The indication today, as the turmoil keeps roiling the Coalition Government, is that Tony Abbott simply must go - which is not a surprising conclusion to arrive at if you've watched the man for any amount of time. Pleiades rang me up to tell me that even loyal Abbott supporters are saying on air that Abbott needs to go. My guess is that he doesn't have the month.
Infrastructure And Privatisation
One of the frustrating things about any discussion to do with privatisation in this country is that the government usually sells off an asset that then turns into a monopoly or a doubly which price fixes to maximise profits from something that used to be a government service. It's no wonder that the electorate no longer buys the narrative that privatisation is good. The track record on privatisation is very mixed, and if electricity prices are any gauge, it's like handing the keys to a bunch of greedy operators so they can gouge people senseless.
And so, we come to this debate that if the government doesn't sell assets, it can't raise money to build more infrastructure.
According to reports in The Age by state political reporter Josh Gordon, the Victorian Government has signalled that it is prepared to legislate to rub out the contract if a compromise on the break fee cannot be reached. Such a move would have profound ramifications for sovereign risk. As one industry executive said, "If they went down this path, they would need upper house approval, which is unlikely given the long-term impact and the reputation damage as Victoria would be seen as no better than an African country by the private sector for years to come."
The clock is ticking for Australia. With an infrastructure backlog and big budget deficits, we can build the infrastructure we need only by selling assets and attracting private capital.This is disconcerting. If the point of privatisation is to raise money to build the next bunch of infrastructure, we would want there to be a better debate than has existed for things like WestConnex. Those bits of infrastructure are implicitly tied up with general construction companies seeking rents at the expense of genuine alternatives.
I would be in favour of privatisation if the money raised was going to be used to build actually useful infrastructure like a metro system or high speed rail. A bunch of tollways seems like eminently the wrong thing for which to be aiming. All the same, when Tony Abbott says he wants to be an Infrastructure PM, well, he means tollways and lots of them. And this is the same guy who is putting an axe to the original NBN. How screwed up can you get?
So I think the narrative that the voters are revolting against privatisation is probably faulty. They're revolting against the utter lack of consultation by governments that ram through more tollways with minimal community consultation. Quite simply, these are not the infrastructure projects we need. Ignoring that problem deservedly turns into voter revolt.
It can't be that hard to understand.
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