Tuesday, June 26, 2012

Politics before community.

Today I received a flier in the mail from Warren Entsch MP. It is filled with lots of information regarding the local and Federal issues, including several pats on the back for local organisations. Well done Warren for recognising great work within our community.

It confuses me that he is excited about the new State Government initiative to formulate a 10 year plan for the Bruce Highway with him on board as the previous Government had a 20 year plan already done and ready to go. It will now cost more money to get the same result. Still, so long as eventually they start building those roads and fixing the black spots, nobody will care about the extra cost.

Lots of fuzzy stories which always make people feel good about themselves. They may even make people feel good about Warren which appears to be the point of it all. Pictures out and about in the region also give that same impression.

So far, not a bad read really. Until you spot the two glaring oddities.

One is the 'Plan to Grow Australia's Economy'. A fantastic idea but no mention in there on how it can be achieved with the current Government. It's a political ad for the next election and does nobody any favours. Cairns and the greater region can't wait until the next election. They need action now. Putting forward ideas on how that can be achieved while in Opposition, working with the Government, would be a much better indication of how capable he is of doing his job. If you can't be effective in Opposition and still work for the region, truly, what's the point? Essentially warming a seat until the next election rolls around is not what we need at all.

The other is the survey. I love a good survey. Nothing like putting in your two cents worth and feeling like you've had some input in proceedings. Provided of course, your input isn't led in a certain direction. That's not a survey, that's another ad.

For example, he has listed under the header; The Issues, several comments which you are to number in order of importance according to your concerns, from 1 to 4. No problem so far. Listed choices include; Fixing our hospitals, Tackling local crime in our community, Reducing cost of living pressures, Backing small businesses, Protecting the environment and a few others which make it tough to choose a top 4 because they seem equally important to me.

Then you have these offerings; Reducing Australia's debt, Securing Australia's borders, Stopping the Carbon Tax, Support for the NDIS.

Firstly, Australia's Debt . Before the next election there will be a surplus if all goes according to plan. If something comes up that is not accounted for (another flood, cyclone, financial crisis) then we will not make it back to surplus this financial year. We will however, make it back sooner rather than later and current debt at around 10% is not high enough to cause anyone any real concern. Considering how little most people understand the full financial situation, that is a loaded option. Most will look at it (as I admittedly did initially) as a surplus/deficit question, rather than a lasting national debt question and will answer accordingly. Those who do understand the current state of financial obligations, income streams and debt, will answer along political lines. Conservative voters abhor any debt at all, liberal voters (in the true definition of the word) understand that there is such a thing as manageable debt.

Next, securing Australia's borders. With Parliament currently sitting on this issue and discussion well underway, now is not the time to jump in and pretend it's suddenly a priority. It's been a priority for years, some would say too much of a priority, and if both major parties would just do their job properly, a solution they can accept will be reached. I've seen both offerings from both parties and neither are acceptable to my mind. Humanity and the right's of people in crisis loses out on both scores. I fail to see how one is any better than the other and if they combined the two, it would leave me just as peeved as I already am on the issue but would satisfy the criteria of the hysterical to STOP THE BOATS!

Now, Stopping the Carbon Tax is about as politically motivated as it would be possible to get. There is no option to Support the Carbon Tax or anything even close to that. Believe it or not, the Carbon Tax will not be as horrific as it is made to seem. He should be advertising the new hotline where you will be able to report price issues if you believe they are motivated by the Carbon Tax and do not accurately reflect the true cost. Besides anything else, even if by some quirk of fate the Carbon Tax becomes a nightmare of epic proportions, you shouldn't in good conscience give the option on a survey to 'stop it' when it has not yet been implemented and nobody really has any idea of its impact. It astounds me that it could be an issue when it hasn't been given a chance to fail, or succeed.

It has the support of everyone except the Coalition politically, the support of economists and the support of all business which is not highly polluting. The tax will apply to high polluters only, which means the cost rise to all other Australians should only be felt on electricity bills, something we are all being compensated for. Some businesses will pay more for products which create high carbon emissions to produce, so be it. Do you really believe that the country we live in will start looking for alternatives and focusing on less environmentally damaging methods of manufacture if there wasn't any impetus to try?

The NDIS support listed last is one of only two which are positive. Beside 'Backing small business' which should be a priority for everyone, supporting the NDIS is also well worth acknowledging. Placed next to creating jobs and fixing hospitals, it is definitely less likely to come in most households top 4, unless of course they are affected by the current disarray that is our national disability services. The cynic in me says that it has been placed there as an option in an effort to prove it is not as high a priority as the Government is making it and should therefore be scrapped and the money spent on other areas of need.

There is no mention on this form on how the information will be collated or where it can be viewed after all surveys are handed back in. If there was any reason to believe it would be worthwhile I would urge you all to fill it out as you please and get it to him asap but there isn't, so I won't. What I will say is that in my opinion, this is further proof of the current sad state of political affairs, where it is easier and more fruitful to continue perpetrating the myth that the Government, regardless of which party is in power, is always the wrong one.

It's painful to watch and it's helping nobody. The race to the bottom is well underway and there are months of these 'surveys' and polls to wade through and be bombarded with. Thank goodness for the human touch in this flier or it would have had it's trip to the bin much faster than it did.


  1. Gosh Leigh you obviously have no idea about finance with your comment.

    “Firstly, it is my understanding that the debt we currently have is temporary. Before the next election there will be none if all goes according to plan.”

    You don’t seem to understand the difference between an annual operating result, which can be a surplus or a deficit, and the level of debt in your balance sheet!

    The budget papers actually included a request to increase Australia’s Govt debt by $50bln to $300bln!! We may return to a operating surplus next year, if predictions are accurate, but we won’t be debt free for many, many years. The tiny budget surplus will hardly dint our debt! Mainly because it is more than offset by ‘off-budget’ funding for the NBN etc.

  2. You are correct Anonymous that there will remain net debt at the time of the next election albeit this is projected to be stabilised at around net 10% of GDP. This is very modest level of no real concern. Note that it is the level of debt relative to GDP which matters and if the budget is returned to balance this will decline as the economy grows. Appropriate debt can be a positive for the economy when applied for such as infrastructure.

    However you are slightly misguided when it comes to the debt ceiling. The numbers you refer to are gross debt. There was actually a debate almost a decade ago on whether a Commonwealth bond market should be retained as debt was retired. It was determined that a bond market was essential for the financial system so that even if net debt is zero there will always be outstanding gross debt offset by other assets.

    The GFC has confirmed the importance of a Government bond market. I believe the current recommendation is that for adequate liquidity it should be around 12% - 14% of GDP. So in the decades ahead that gross debt ceiling you are worried about will eventually grow further in line with GDP regardless of the net debt position and we will never be 'free' of gross debt.

    Maybe you should consider your own financial lessons?

    1. Dear Kitchen Slut

      What do you mean?
      “Maybe you should consider your own financial lessons?”

      Did I question the need for a bond market? No.
      Did I express concern about the level of debt to GDP? No.
      Did I claim the $300bln was net debt? No.

      I simply pointed out that the blog author appeared to not understand the basic difference between an operating surplus and the level of Govt. debt.
      And that her claim that there will be no debt by the next election is clearly nonsense. Which you obviously agree with by referring to the 10% of GDP figure and acknowledging that it “will eventually grow”.

      Talk about attacking ‘straw men’ and completely ignoring the point I made!
      Suggest you read comments a little closer.

      The only person needing a financial lesson is the blog author

  3. This comment has been removed by the author.

  4. My apologies, you are indeed both correct. I have changed the wording to reflect my intention which was of course, Government surplus. Decreasing Federal debt would be a very difficult task as we continue to grow as a nation, requiring major infrastructure to support that growth. A lesson learned in re-reading posts prior to posting online.

    1. Congratulations Leigh.
      Few blog authors are honest enough to admit their mistakes.

      Wonder if Kitchen Slut will?

    2. Actually, no Anonymous. I stand by my comments which are validated by any sensible understanding of English comprehension! The only sensible interpretation of your own explanation is that you deliberately chose to misrepresent!