Monday, November 17, 2008

Stimulating the economy - in the right places?

Now a bit of a crack at the federal Labor Government - I can understand them wanting to stimulate the economy - in tough times that makes sense [you can even argue that is the obligation of government - see articles below], but I question the way it is being done.

1) firstly, there's a A$10bn handout to old people and low income earners - nice idea, but there is an argument that a lot of that money will be spent on paying off credit cards, not giving the economy an immediate boost, which is the plan - I guess the jury's out on this one.

2) Then there's the payment of roughly $6bn to subsidise the inefficient car industry - presumably in the name of saving jobs. I would have liked to see a little more analysis of where that $6 bn could be better invested [especially in terms of the number of jobs generated vs the $ amount per job]. And secondly, are there not better uses for the money - especially when independent industry experts estimate that much of the $6bn will be sent offshore to the US parent companies, which are in dire straits themselves?

For example, the health sector is crying out for increased funding - the various medical associations estimate that they need $3bn urgently - why not invest part or all of that $6bn in health? Has anyone estimated the benefit to employment, not to mention the benefit to the community, of spending that money on the health system, instead of an ailing, inefficient car industry?

3) Lastly, there were news reports in the papers this morning that the Government is planning to help car dealerships next - generally not seen as the most socially responsible contributors to society - you've got to be joking! I have a small publishing business, and am too small to take on employees - why not help me out? With $500k I promise to take on at least two employees, seriously!

Sadly, I am already beginning to have my doubts about this government.

-A

Labels: ,

Friday, November 14, 2008

Interview critique [addendum to previous budget post]

The only other point to add to the [admittedly rather lengthy] post below, was the disappointing performance of Quentin Dempster, the interviewer on ABC's Stateline.

While Roozendaal was trotting out his inanely stupid PR line 'a tough budget for tough times', Dempster singularly failed to correct him on the crux of the whole argument - namely that when there are tough times, it is a government's job to post a stimulatory budget - ie they are supposed to act in a counter-cyclical manner, to correct the market failing ie in a recession, they should increase, not reduce spending - this is economics 101, and unfortunately Dempster didn't have the interviewing where-with-all to pick Roozendaal up on it.

Very disappointing all round!

-A

Labels: , ,

NSW state mini-budget - Nov 08

I want to publish this for two reasons: firstly to demonstrate that I'm not politically biased, and secondly because I have just witnessed the most mind-numbingly stupid performance by a Minister of the Crown [even if a State Govt minister] that I have ever witnessed.

The reference point for this, is that the [Labor] State Government of NSW has just issued a mini-budget, but it was the interview with Eric Roozendaal, the NSW Treasurer on ABC TV ['Stateline' Friday November 14th] that prompted this post.

By way of context [& because it was written so well] I'm going to cut-and-paste from the Sydney Morning Herald from November 13, 2008:

"THE fundamental flaw in this week's state mini-budget is that it will dampen spending at precisely the time the Federal Government is increasing it. Yesterday, Ken Henry, Secretary to the Federal Treasury, said the NSW budget was so harsh it may slow the national economy and require Canberra to spend even more than the $10.4 billion already announced to kick-start the economy. The incompetent mini-budget is one of the most potentially damaging attacks on the public good we have ever seen from an Australian government. It seems almost unfair to single out one aspect for special criticism, but we are drawn to transport because of the quantum of idiocy, and even malice, involved.
The introduction this week of congestion charges for the Harbour Bridge and the Harbour Tunnel, which will mainly affect voters in safe Liberal seats, is both unfair and (because the extra charge is too low to influence many people's behaviour) ineffective. But it should not blind us to the fact that congestion charging is in principle a good idea for Sydney, as it has proved to be for London, which has experienced a fall in congestion, and an increase in average vehicle speeds, while the money collected has been put into expanding public transport. We need more of it, not less, but it has to be applied intelligently.
In June, the Herald reported on congestion charge modelling from Sydney University's Institute of Transport and Logistics Studies. Its director, David Hensher, calculated that a charge averaging 10 cents a kilometre would decrease Sydney's congestion by 8 per cent during peak periods. The price paid by drivers could be varied according to the level of congestion on the road, the time of day and the environmental impact of the vehicle used. In theory, such a system would encourage people to move to public transport - although, given the city's many missing railways, that would remain a theoretical proposition for many Sydneysiders for some time.
The then roads minister, Eric Roozendaal, described the institute's proposal as "armchair advice from academics in ivory towers". This week we saw what he regards as superior public policy.
Given the sheer incompetence of the mini-budget, many people will be wondering if anything can be done to cut short the State Government's term. Those asking this question might well include the Prime Minister, Kevin Rudd, who will go to the polls by late 2010 with the country's largest state still run by this lame-dog crew, perhaps still in a recession deepened by their failings.
Under the four-year fixed term introduced in 1995, Nathan Rees or an ALP replacement will be premier until elections on March 26, 2011, unless the Labor caucus in the Legislative Assembly splits and some members vote with the Opposition in a no-confidence vote. But, barring an unsuspected burst of altruism above self- and state party-interest, why would they?
Some have placed blame for our predicament on the four-year fixed term, which blocks the capacity for premiers to call a snap election to capitalise on good news or get in ahead of bad. But the previous system, with a non-fixed three-year term, would have made no difference (assuming Mr Rees postponed an election for as long as possible), apart from reducing our misery by one year. The real problem is the absence of workable recall mechanisms, such as exist in the constitutions of 18 American states. In California, the required 12 per cent of voters signed a petition in 2003 for a recall of the Democrat state governor, Gray Davis, over disarray in state finances and electricity blackouts. Gray was duly voted out and replaced by the Republican Arnold Schwarzenegger. It would not be too hard to get to 12 per cent of our voters - about 473,000 - to sign a recall petition right now. Alas, no Terminator looms for this dysfunctional government.
If, after this week, Mr Rudd is still brave enough to try to bail out NSW with new infrastructure spending, he should insist on federal administrators riding shotgun on how the funds are used.
As the state's governance acquires the air of a Monty Python film, we must not despair. We need to remind ourselves of this: many of Sydney's problems do have solutions, even if they remain ungrasped by the practitioners of Roozenomics."

Couldn't have said it better myself - which is obviously why I quoted their piece... I guess the only point is that in the interview, instead of coming up with any sensible justification for what was such a seemingly stupid piece of policy in the Stateline interview, this dip-shit Roozendaal confirmed all the worst assumptions. Worse still, he kept quoting phrases of spin such as 'this is a tough budget for tough times' - and ended the interview with a self-satisfied smirk, as if he had passed the TV interview 'spin test'. But the reality is that it is the voters of NSW will have to live with the consequences of the amazingly inept pronouncements from this inanely stupid individual.

This Labor State Government is just so appallingly bad, it's unbelievable!

-A

Labels: ,