Labor’s Economic Plan: Copy Cyprus And Iceland

19 Jul


Your humble blogger was interested to watch new treasurer Chris Bowen’s speech at the National Press Club yesterday.

Readers may have noticed that resuscitated PM Rudd has immediately distanced his own economic narrative from that of former PM Gillard, and her imbecilic deputy PM and “World’s Greatest Treasurer” Swan. Rather than their mantra-like “Strongest advanced economy / mining boom forever / everything is fine / stop being so negative” tripe, Kevin Rudd has instead begun to offer the teensiest bit of honesty about the problems the economy faces, both now, and in the weeks and months ahead.

So in that vein, I wondered whether our new treasurer might just put a little bit more meat on the bone of Rudd’s rhetoric, by outlining (or even hinting at) just what this “new Labor” under Rudd might have in mind in terms of economic policies. One could be forgiven for expecting so, considering that the title of Bowen’s speech was Labor: Managing The Economic Transition.

Now I grant you, unlike any appearance of Wayne Swan on TV, I was able to quite easily watch all of Bowen’s speech without feeling an immediate boiling of the blood and red mist descending. So that’s something to be said for our erstwhile new treasurer.

Shame then, that nothing good can be said for the content of his speech.

Indeed, it would appear Labor’s grand economic plan is to copy Cyprus and Iceland, by turning Australia into a “financial services centre” (my bold added):

The estimated net contribution of the resource sector to real GDP growth is expected to fall – from contributing to roughly half of Australia’s economic growth over the past two years to around a third by the end of the forecast horizon.

The production phase of the resource boom will also be significantly less labour-intensive than the investment phase.

This brings me to the second transition we face.

That transition is to growth being driven by the non‑resource sectors.

It’s not surprising to see Treasury forecasting that the non-mining economy will make a larger contribution to Australia’s economic growth.

These transitions will occur inevitably.

The question is: will they be smooth or bumpy? Will the Australian economy benefit from them or suffer?

Our challenge is in improving our productivity and competitiveness to assist in this transition.

This is the key economic challenge for the next three years – and lies at the core of Labor’s positive plan to promote competitiveness to spur jobs and investment.

This will mean working with the manufacturing and services sectors to promote investment.

I’m not talking about picking winners or subsidies – I’m talking about breaking down barriers to competitiveness.

What we’re doing in financial services is a good example of what can be done.

Financial services

The financial services sector has seen incredible growth in the last 20 years and it is this growth that we need to harness.

Despite the strength of the local industry, our exports and imports of financial services are low by international standards.

There is a great opportunity for the financial services industry to become more outwardly focused.

Encouraging competition and efficiency would improve the range and choice of financial products available to consumers and promote increased exports of financial services.

Improved economies of scale would reduce the costs of financial products for Australian consumers and businesses.

As our track record shows, only Labor is interested in taking advantage of these opportunities.

In 2009 and 2010, it was pretty unfashionable for Governments around the world to announce that they wanted to promote financial services.

But in January 2010, as Minister for Financial Services and Superannuation, I released the Australian Financial Centre Forum’s report on Australia as a Financial Centre – the Johnson Report as it became known – and four months later, the Government started implementing the key reforms.

Stages 1 and 2 of the signature reform – the Investment Manager Regime – have passed the Parliament.

We have taken steps to create a deep and liquid corporate bond market in Australia. Legislation to simplify corporate bonds issuance has passed the House of Representatives.

The Government has passed legislation to enable the retail trading of Australian Government Bonds.

And the Government recently announced that Australia will be the third major currency in the world to be able to trade directly against with the Chinese Renminbi, after the US dollar and the Japanese Yen, in China’s foreign exchange market.

Why have we done this?

Because Labor knows that increased trade in financial services will increase Australia’s growth prospects and standard of living.

We know positioning Australia as a financial services centre in the region means that we would be able to offer increased job opportunities for a range of skilled workers in the financial sector.

And there is potential to do so much more.

Yes, I can just see all those tradies coming back from the mining construction boom, shedding their Consciences, donning white collared shirts, and learning how to become peddlers of usury products.

Aspiring to be a “financial services centre” is nothing more, and nothing less, than aspiring to copy the economic model of Iceland and Cyprus, both of whom enjoyed an initial “boom” from doing this.

Followed by another one.

If this is what Labor have to offer in terms of “managing the economic transition”, then we really are in deep, deep doo doo.

A final comment.

It is interesting to this blogger to note the complete absence of criticism of Bowen’s speech in the mainstream press, either yesterday or today.

Bowen’s speech contained no indication of Labor having any other new economic policy initiatives. None whatsoever.

A “financial services centre for the region”. That is the great Labor plan, or so it would seem.

After what we have seen happen to other small nations that embarked on this same path, what we should have seen is the media tearing strips off Labor.

Instead, if anything, what we have seen is muted applause.

Methinks the economic commentariat’s left-leaning slip is showing under their skirts.

24 Responses to “Labor’s Economic Plan: Copy Cyprus And Iceland”

  1. mick July 19, 2013 at 1:38 pm #

    It does not matter which side of politics wins the next election as the Cyprus solution appears to be locked in. And just like the federal government’s “right” to confiscate your gold (if it wants to) and give you crap paper money we all need to understand that it may never occur (ha, ha). Well only if conditions occur “beyond expectations”.

    I too am happy to see Swan and Gillard gone. The mining boom blew up in the “glass half full” “world’s best treasurers” face. I told him so but Swan’s own arrogance would not let him face the facts. Of course the issue which should be the most important issue on the agenda (the sale of FREEHOLD agricultural land to foreign governments) does not even get a mention in the so called ‘free press’. Swan himself used the lie of convenience (“foreign investment”) to not do anything about stopping the practice. It is shameful and it will come back to haunt future generations who will curse their forefathers for not stopping it.

    In terms of becoming a financial hub all I can say is I doubt it. If you were sitting in China would you set up your own hub (Hong Kong or Shanghai?) or would you deal with one thousands of kilometres away? Australian governments and their highly paid advisors are little more than wankers and need to employ somebody with a bit of reasoning ability to work out the probabilities so that more good money is not thrown after bad.

    Personally despite the polls I am not all that sure that Labor is going to get over the line. Whilst responsible the legislative changes to leasing vehicles is badly times before an election. This might be sound government but it should have been left until AFTER the election. Likewise ending the welfare system where Australians are able to elect to have an alternative lifestyle should be hit at the same time. Good policies need time to unfold and making the hard calls with 4 years left on the meter is both smart and prudent. Making big calls like the above before an election is dumb and will most likely backfire on Labor. So in the end we will probably get an Abbott led government which will do as Abbott has already stated and transfer a huge amount of wealth into the bank accounts of the rich within the first couple of months. Only then will Australians wake up to what they have done. Too late.

    What we all need to do is look at the bail in changes and find ways of alerting the press to get some editorial going as this is dirty politics done without scrutiny and for the benefit of those who need no help, let alone public money to bail them out when their greed backfires on them.

  2. Kevin Moore July 19, 2013 at 1:54 pm #

    For your financial services job –

    “Integrated solutions and global reach
    Bank of America’s ability to deliver a broad array of integrated solutions, coupled with our unrivaled client access, creates a unique competitive advantage. We ensure the best ideas and execution for our clients by working in teams across industries, regions and asset classes. From mergers and acquisitions to capital raising, lending, trading, risk management, treasury management and research, we impact every aspect of our clients’ businesses.
    Bank of America has key operations in more than 150 locations worldwide. Building on our leading U.S. franchise, our regional experts work seamlessly to deliver the powerful capabilities of Bank of America to help clients succeed in Asia and beyond.”

    • mick July 19, 2013 at 2:36 pm #

      Funny, funny, funny.

      Warren Buffett was been buying in. I was shocked at the share price though. The last time I looked it was $300. Now it is $1200. So what happened to all of the debt? It tells a tale. I should have followed Warren!!

  3. Ross Johnson July 19, 2013 at 7:50 pm #

    It seems some months ago I got you guys in shit. Hence now the title you really don’t represent Barnaby Joyce.Tony Abbott’s minders were not impressed. In fact when they were about to eject me ,one of his security morons was considering punching me out.

    I handed out at least 200 of your blogs info before they cottoned on. Where does Barnaby Joyce stand in this debacle?

    • mick July 19, 2013 at 8:13 pm #

      I thought that Abbott’s crew were economic thugs but never knew they would resort to the physical kind of intimidation. Makes a statement.

      • The Blissful Ignoramus July 19, 2013 at 8:26 pm #

        “Makes a statement”

        No more so than for any other political party. Both “sides” have history in this regard.

        • mick July 19, 2013 at 8:28 pm #


      • Ross Johnson July 19, 2013 at 9:40 pm #

        Mick the really funny part was that they gave me Abbott propaganda to hand out and they took this site’s truth and they did likewise. I sat down and got too ambitious. I started to put the truth on vacant seats that alerted security.Thus I missed my chance to ask Abbott the difficult questions about the banksters.

        The party faithful will never question Abbott ,Rudd or Gillard since they are connected to the teat of their comfort zone and treachery.

        • The Blissful Ignoramus July 19, 2013 at 9:41 pm #

          “The party faithful will never question Abbott ,Rudd or Gillard since they are connected to the teat of their comfort zone and treachery.”

          Too true Ross. Alas.

    • The Blissful Ignoramus July 19, 2013 at 8:16 pm #

      “It seems some months ago I got you guys in shit. Hence now the title you really don’t represent Barnaby Joyce”

      Firstly, “we” have never been “in shit” with anyone.

      Secondly, from Day 1 (Feb 2010) this blog has never “represented” Barnaby Joyce. As anyone who could be bothered to click on the ABOUT page, which is clearly linked at the top, could and should easily have known.

      The reason I decided to add the bold red comment in the masthead some months ago, was because (a) I started blogging again, after a lengthy hiatus; (b) I had noticed elsewhere on the ‘net evidence suggesting that, despite the very clear disclaimer that has always been in the ABOUT page, nevertheless the occasional (intellectually lazy) person was ass-uming there was a connection; and finally (c) I decided to begin writing some blogs on topics that I have little doubt Barnaby Joyce would not wish connected to him, even if only due the stupidity/laziness of some web users.

      I appreciate your spreading the word around re info published here .. thank you. But I’m afraid I cannot have any sympathy for anyone who has drawn any false inferences about the blog’s authorship, etc. There is simply no excuse for anyone to ever have gotten that wrong.

      EDIT: I must admit, I’d be curious to know what, exactly, I have published that (allegedly) riled some Liberal Party minders … I can think of a few topics 😉

      • mick July 19, 2013 at 8:50 pm #

        Strewth Blissful……..I spend my blogging life criticising Abbott and his cohort as I find it morally reprehensible that this side of politics has degenerated into a bunch of lying has bees and intends transferring a huge amount of public money to the those who need it least. And the sting in the tail is that struggling Australians will be financing this reprehensible behaviour.

        Keep up the good work. Its a tough job but those best suited should do it. God knows most of our countrymen will only give a tinkers when the music has stopped and it is all too late.

        • The Blissful Ignoramus July 19, 2013 at 9:00 pm #

          “God knows most of our countrymen will only give a tinkers when the music has stopped and it is all too late.”

          Same as it ever was Mick, all through history.

      • Ross Johnson July 19, 2013 at 9:00 pm #

        Blissful Igoramous you removed from your site tick tick tick aussie banks $15 trillion time bomb.

        I’m puzzled as why Barnaby Joyce who does not endorse your site, allows such a representation who he seemingly,does not approve.

        • The Blissful Ignoramus July 19, 2013 at 9:25 pm #

          “ removed from your site tick tick tick aussie banks $15 trillion time bomb”

          Er .. Ross .. that link, which you provided, it still works mate. The article is still there. It has never been removed.

          I’m somewhat bemused that you are “puzzled”. This site is, and always has been, quite clearly NOT written by Barnaby Joyce. I mean, seriously … would any politician with half a brain write a blog, titled in the third person and proclaiming that “(I) IS RIGHT” … ? That would be rather pretentious, and just begging to be ridiculed, don’t you think? Would any politician then write such a blog frequently referring to themselves (ie, the author) as “your humble blogger”, rather than by their own name? Would any politician put an ABOUT page on the site, with some other bloke’s photo, and a very clear disclaimer that the blog has no connection or association whatsoever with themselves or any other politician or political party?

          Ross, I cannot comment on whether Barnaby Joyce does or does not approve of what I write. Why? Because I simply don’t know. Not a clue. I’ve never heard from him, or his office, informing me of his opinion on its existence, one way or the other.

          Finally, Barnaby Joyce (or any other politician) does not (yet) have the power to prevent a private citizen from writing a blog arguing that they (the politician) “is right” about a particular topic.

          Let us be clear. There is no “representation” here. None. This blog has never made any representation viz. BJ … quite the contrary, in fact (ie, the ABOUT page, the style and tone of writing, etc).

          Anyone who has in the past, or now, wrongly assumed there is any connection, association, or representation, is (to be brutally frank) a fool. Someone too lazy to think “Would BJ really write this?”, and too lazy to think “Where can I look to find out if it is him? .. oh look, there’s an ABOUT page … and, there’s a link in the ‘Blogroll’ section to Barnaby Joyce’s actual website, clearly marked with National Party branding, BJ’s photo, bio, speeches, etc”.

          If any reader feels offended by this comment, I’m sorry, but that’s too bad. People being too superficial, ass-umption-prone, and plain butt-lazy to turn their brains on, and do a few checks before leaping to conclusions, is a very big part of the reason why this country and society is in the state it is in … and the worse state it is going to be in.

          If the shoe fits, dear reader … wear it.

          • Ross Johnson July 19, 2013 at 9:58 pm #

            Err well for a short time it didn’t. However BIG {Blissfulligoramus} BIG is your acronym. I like and endorse your site.

            • The Blissful Ignoramus July 19, 2013 at 10:13 pm #

              Actually, if one takes careful notice, TBI (The Blissful Ignoramus) is the correct acronym for my blogging name.

              And thanks for the endorsement 😉

          • mick July 19, 2013 at 10:02 pm #

            Whilst you are correct you need to remember that not everybody can put hours in. Hence some of us (gulp) occasionally put our foot in it. Such is life. Don’t be too hard on the blagged…………

            • The Blissful Ignoramus July 19, 2013 at 10:21 pm #

              Ummm … it doesn’t take hours. Only about a second or two; first to entertain the obvious thought/question (ie, “Is this really BJ’s own site?”), and then a mere fraction of a second to click on the ABOUT link at the top.

              Anyway mate, fair point (“don’t be too hard on the…”). I trust readers will forgive my occasionally succumbing to a small bout of intolerance.

            • mick July 20, 2013 at 10:08 am #

              Comes with TBI. Welcome to the club.

  4. Kevin Moore July 20, 2013 at 6:13 am #

    At its 1962 Congress in Oslo, Norway, the Socialist International plainly declared:
    The ultimate objective of the parties of the Socialist International is nothing less than world government…. Membership of the United Nations must be made universal.
    The SI has never wavered from that goal, though it has softened its rhetoric, adopting the mushier, less threatening term “global governance” to replace its earlier appeals to “world government.” This is important to keep in mind, since current and former Prime Ministers and Presidents who are members of the SI comprise a large and influential contingent of world leaders who figure prominently at global and regional summits. Currently, the Socialist International boasts 170 political parties and organizations worldwide, including many that are currently in power running national governments.
    Prominent SI member parties include:
    • Britain’s Labour Party (Gordon Brown, Prime Minister),
    • Australia’s Labour Party (Kevin Rudd, Prime Minister),
    • South Africa’s African National Congress (Jacob Zuma, President),
    • Spain’s Socialist Workers’ Party (Jose Zapatero, President),
    • Nicaragua’s Sandinista Liberation Front (Daniel Ortega, President),
    • Namibia’s South West Africa People’s Organization (Hifikepunye Lucas Pohamba, President),
    • Chile’s Socialist Party (Michelle Bachelet, President), and
    • Egypt’s National Democratic Party (Hosni Mubarak, President).
    These and other SI member parties and their leaders have been fairly open in their calls for “global governance” to address what they claim are “global crises” that cannot be addressed (they say) in the current system of sovereign nation states. As The New American has reported, Prime Ministers Gordon Brown and Kevin Rudd have been especially outspoken, with hysterical pronouncements on the supposed need for UN governance to stave off supposed catastrophic global warming. In a speech this past November, Prime Minister Rudd denounced global-warming skeptics — including respected scientists and politicians — as evil “climate-change deniers,” who are “dangerous” and are “holding the world to ransom.”

    • mick July 20, 2013 at 11:29 am #

      This sort of rhetoric is not unexpected from a US based media outlet given that not 2 decades ago you could find yourself in jail or beaten up for siding with a communist regime.

      I had a very quick flick over the article Kevin. Looks more like a beat up with the article referring to climate change for the most part. I don’t think that there is more to it than that. Given the games nations are playing with each other about staving off the inevitable how do you ever get a consensus when the lowest common denominator becomes the benchmark? And whilst temperatures continue to climb the world talks politics. I posted the following link before:

      Interesting reading though.

      • Kevin Moore July 20, 2013 at 3:41 pm #


        The temperatures are falling!
        Forget global warming!? Earth undergoing global COOLING since 2002!
        Growing number of scientists are predicting global cooling: Russia’s Pulkovo Observatory: ‘We could be in for a cooling period that lasts 200-250 years’
        ‘Sun Sleeps’: Danish Solar Scientist Svensmark declares ‘global warming has stopped and a cooling is beginning…enjoy global warming while it lasts’
        Prominent geologist Dr. Don Easterbrook warns ‘global COOLING is almost a slam dunk’ for up to 30 years or more
        Australian Astronomical Society warns of global COOLING as Sun’s activity ‘significantly diminishes’

        We’re All Skeptics Now! The Economist: ‘A COOLING CONSENSUS’: Warns the public may have ‘been systematically deceived by climate alarmists’
        ‘Global warming has slowed. The rate of warming of over the past 15 years has been lower than that of the preceding 20 years. There is now serious doubt that our planet continues to heat, but it has heated less than most climate scientists had predicted. Nate Cohn of the New Republic reports: ‘Since 1998, the warmest year of the twentieth century, temperatures have not kept up with computer models that seemed to project steady warming; they’re perilously close to falling beneath even the lowest projections’

        Roy W. Spencer, PhD
        Earth System Science Center
        The University of Alabama in Huntsville Huntsville, Alabama 35801
        18 July 2013
        1. Introduction
        I would like to thank the Chairman and the Committee for the opportunity to provide my perspective on the subject of global warming and climate change. I have been performing U.S. government-sponsored research for the last twentyeight years, publishing peer reviewed papers on global temperature monitoring with satellites, on the amount of warming we might expect from greenhouse gas emissions, how to monitor hurricane strength from satellites, and quantitatively explaining ocean heat content changes.
        Prior to my current position as a principal research scientist at the University of Alabama in Huntsville, I was Senior Scientist for Climate Studies at NASA’s Marshall Space Flight Center. I am also the U.S. Science Team Leader for the Advanced Microwave Scanning Radiometer-E flying on NASA’s Earth-observation satellite Aqua. I am a recipient of NASA’s Medal for Exceptional Scientific Achievement. In related endeavors I have authored a book on basic economics: (Fundanomics:The Free Market, Simplified) now used in a college-level economics course; and have coauthored an Energy Law Journal article on the use of climate models under the Daubert standard for rules of evidence.
        2. The State of Climate Science
        My overall view of the influence of humans on climate is that we probably are .having some influence, but it is impossible to know with any level of certainty how much influence. The difficulty in determining the human influence on climate arises from several sources: (1) weather and climate vary naturally, and by amounts that are not currently being exceeded;
        (2) global warming theory is just that – based upon theory; and

        (3) there is no unique fingerprint of human caused global warming. My belief that some portion of recent warming is due to humans is based upon my faith in at least some portion of the theory: that the human contribution to atmospheric greenhouse gas concentrations has resulted in an estimated 1% reduction in the Earth’s ability to cool to outer space, and so some level of warming can be expected to occur from that change.
        Exactly how much warming will occur, however, depends upon something we call “climate sensitivity” (Spencer & Braswell, 2010; 2011), and relatively few researchers in
        the world – probably not much more than a dozen – have researched how sensitive today’s climate system is based upon actual measurements. This is why popular surveys of climate scientists and their beliefs regarding global warming have little meaning: very few of them have actually worked on the details involved in determining exactly how much warming might result from anthropogenic greenhouse gas emissions……….”

        Climate Depot [Marc Marano] have an email contact if you would like to argue the issue.

        • mick July 20, 2013 at 7:49 pm #

          Have you had a look at the link:

          A few lines from the abive article:

          “June was one of the hottest such months on record globally, based on newly released data from NASA and the National Oceanic and Atmospheric Administration. The month extended the unbroken string of warmer-than-average months to 340, or a stretch of more than 28 years. That means that no one under the age of 28 has ever experienced a month in which global average temperatures were cooler than average (based on the 20th century average).”

          “June continued the long-term warming trend tied to manmade greenhouse gas pollution as well as natural climate variability. The planet has not recorded a single month with temperatures below the 20th century average since February 1985…”

          “A recent report issued by the World Meteorological Organization found that nine of the 10 years between 2001-2010 were among the 10 warmest years on record for the globe, based on that organization’s rankings, which can differ slightly from NOAA and NASA’s rankings.”

          Your assertion of natural cycles is also discussed in the context of changes in time frames. And you should note that variations will always occur and the the trend will never be linear, but over time the trend will become clear. I believe that the pieces are starting to fall into place.

          Although we do have a few people talking about the next ice age the statistics do not so far support this and one might believe that if this happens it will be nature’s response to a heating planet.

          Sorry Kev but I disagree with your point of view. The data is appears to be against you.

    • mick July 20, 2013 at 4:14 pm #

      Had a bit of a trawl through your link Kev. Check out the following:

      Seems like this site is a bit obsessed with global government. I have never given it a lot of thought but there will be point in time where this would seem logical but how you could ever implement such a system seems light years away. Maybe when societies, through media and assimilation move towards the middle, then it may possibly work. At this stage it is doomed to failure because nations are so different. And then we have to consider the aims of some of the more dangerous religions and world government looks lighr years away.

      Thanks for the link though. It does stimulate the grey matter and is certainly worth throwing into the mix.

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