Tag Archives: ALP

More Labor Bad Accounting

20 Mar

Media Release – Senator Barnaby Joyce, 20 March 2010:

The Labor Party has added another $2.1 billion to our debt in the last fortnight which cracks the $130 billion mark. This is slightly less than the Clem 7 tunnel in Brisbane and would build 10,000 kilometres of sealed roads in regional Australia. They know they will never be responsible for paying it back.

Every week we find out more and more of what they have purchased with our credit card. The Building Education Revolution (BER) appears to be a very choice piece of work. Yet another brilliant example of the Labor Party not dotting the ‘i’s and crossing the ‘t’s, as Mr Tanner pointed out with regard to his input into the Ceiling Insulation Program.

The Labor Party cannot control costs. It appears they have never had experience in running a business and have now decided to experiment with the Australian economy as an economic crash test dummy with silly and dangerous ideas.

The cost overruns, inside deals for unions, burning houses and electrocution fatalities are just the start of understanding how the Labor Party manages the economy.

Today, what inspired this media release is that I have just walked out of a K Mart, after a buying a cheap pair of working trousers, and a mother with two children and an older couple were lined up to tell me about money that has been squandered in their district. They were concerned what the effect of going public with their story would have on their local school teacher but the story has grabbed my attention.

$250 000 has just been spent on a school hall in a local village/town. They could identify $110 000 worth of costs but $140 000 was for them “mystery money”. The school raised a complaint with the contractor and has since been refunded in excess of $30 000.This seems to be the story nearly everywhere you go and now is more widely ventilated with what we are reading in the papers.

Mr Tanner, Mr Swan and Mr Rudd are responsible for this. Their whole management critique is farcical. The ceiling insulation program has literally turned into a national crisis; the BER is the Big Education Rip off; the hidden Henry Tax Review; the $43 billion NBN project that was begun without a cost benefit analysis. To top it all off, is the Labor Party’s continued insane desire to re-jig the whole Australian economy based on a colourless, odourless gas that will apparently lead to Australia, single handedly, cooling the planet. On and on it goes, this rolling Greek tragedy, which is Labor Party management.

As an accountant, I have seen this form of management that the Labor Party indulges in.  It reminds me of the new arrival in the family business who is flash as a rat with a gold tooth and is quickly swindling away years of hard work.

They have the whole household on hire purchase, with the new car, the new boat, the new pool, the new stereo, multiple overseas trips to many and varied destinations but they have no new income and the result is a massive debt. You get this sinking feeling that just like they blew in, they are going to blow up then blow out.

More information- Jenny Swan 0438 578402

Next week, the Rudd Government has scheduled to take us another$2.1bn into debt.

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Labor Less ‘Creative’ Than Greece

19 Mar

From the Korea Times:

The Greek crisis is a textbook example of the interconnectedness of the global economy and the foreign policy environment.

For most of the last decade, the Greek economy grew faster than others in the euro area. Yet, the country’s balance sheets worsened.

(Sound familiar?)

So, when the global recession hit, and the Greek economy contracted by 2 percent in 2009, international bond markets panicked, fearing that Athens was going to have trouble meeting its obligations. By mid-February the Greek government was paying three percentage points more to borrow money than the interest rate charged Germany, worsening the mismatch between Greek revenues and expenditures.

Wall Street bears some of the blame for this mess. Goldman Sachs and possibly other American financial institutions reportedly helped Athens understate its true indebtedness through the creation of innovative financial instruments.

The Rudd Government has used a more traditional way to understate our true indebtedness. ‘Creative accounting’. Or ‘cooking the books’.

First, Rudd Labor has made changes to the ‘methodology’ used for reporting Gross Domestic Product (GDP).  And they have applied those changes to all the previously reported Budget numbers too.  The result?  A “substantial increase” in Australia’s GDP.  As much as (eg) 4.5% per annum added to the real, inflation-adjusted GDP that was originally reported in the Howard Government’s 2006-07 Final Budget Outcome.

The benefit to Rudd Labor in making this “substantial increase” to GDP in the historical data, is that their spending (as a percentage of that GDP) looks lower.  Their annual spending growth (as a percentage of GDP) looks lower. Their debt (as a percentage of GDP) looks lower. And, their Interest-on-debt (as a percentage of GDP) looks lower too. This explains why Rudd Labor politicians always love to quote everything in percentages. “As a percentage of GDP”.

Second, Rudd Labor has also changed the ‘methodology’ used to calculate the inflation-adjusted value of ‘real’ spending growth.  This was a sudden decision, for the November 2009 MYEFO budget update. The result? The Rudd Government’s reported ‘real spending growth’ is a whopping 30.1% lower under their new calculation method.

Finally, Rudd Labor lies about the GFC whenever it needs to defend its massive spending spree. They have repeatedly told the public that “the GFC punched a huge hole in our projected revenues”.  But the official Budget documents show that this is a lie.  In the May 2009 Budget, the estimated government “Receipts” were only 2.7% lower than for the previous year.  And by the November MYEFO update, government revenues were expected to be slightly higher than for the previous year.

Please follow those links. View for yourself the actual Budget documents that show how Rudd Labor have ‘cooked the books’.

You will see that, unlike Greece, our Labor Government does not need to hide our true state of indebtness through the use of creative financial instruments.

They use good old-fashioned ‘creative accounting’ instead.

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Hell Freezes Over

18 Mar

Media Release – Senator Barnaby Joyce, 18 March 2010:

Hell Freezes Over: Cameron / Barnaby Agree

For once, Senator Barnaby Joyce agrees with the government. In the Senate today Senator Doug Cameron said, “This government has a good record on tax”.  They have a great record if it is about increasing taxes. Barnaby Joyce says he is glad that they recognise this. The Rudd Government’s ETS is one of the biggest imposts on every aspect of life ever invented.  So it is great that the members of the Senate do recognise that they have a fine record of creating taxes. Remember this is a tax on everything that will achieve nothing. It will not change the weather patterns but it will increase the prices on everything.

Mr Rudd did give us hope that there may be some real efforts on tax reform, but the report is conspicuous by its absence. Perhaps the Henry Tax Report has become a doorstop, a coffee table book or elaborate origami, buried somewhere in Mr Swan’s office?  Without the report, how can the Federal Government expect the states to agree to any change of GST funding for their proposed health plans?

More information- Jenny Swan 0538 578 402

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Labor: Hide The Increase

3 Mar

Australia’s much-heralded “low” debt-to-GDP ratio statistic appears to be a fraud. Deliberately “adjusted” by the Rudd Government, in order to make their massive debt-funded spending binge appear less than it is.

In the 2009-10 Mid-Year Economic and Fiscal Outlook (MYEFO), the government refers to a change in the methodology used to calculate GDP  for the previous 2008-09 year, and for the historical data series.  This change results in a “substantial increase” in the published level of GDP.

The flow-on result from this change is obvious. The government’s spending, as a percentage of that artificially increased GDP figure, will appear lower than if the change had not been made.

And because all of its spending is being done using borrowed money, the debt-to-GDP figure will also appear lower too. Perfect cover for a government that needs to defend itself from Opposition attacks, and smooth over public fears, about rising government debt.

But there’s more.

In the 2009-10 MYEFO, the Rudd Government changed the methodology used to “adjust” government spending for inflation. The result is that the government’s “real” spending growth % figure is artificially reduced… by a whopping 30.1% for 2009-10.

How can we know this?

In the fine print – isn’t it always? – on the Rudd Government’s Budget 2009-10 MYEFO website, we read:

…

Continue reading ‘Labor: Hide The Increase’

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Tanner Lied About Whitlam Debt

1 Mar

Tanner - "We were not in debt under Whitlam"

Finance Minister Lindsay Tanner recently defended the Whitlam legacy on the ABC’s Q&A program, claiming that the Whitlam Government had no debt:

“In the period when the Whitlam government was in office, most people would be surprised by this, Australia had negative net debt,” Mr Tanner told ABC Television on Monday night.

“We were not in debt under the Whitlam government.

Note carefully: that’s not one, but two intriguing claims. That Whitlam had (1) Negative Net debt, and (2) no debt.

I’ve done a little digging in the RBA Statistics archives, to see if Tanner was telling the truth. The results so far suggest that he lied…

Continue reading ‘Tanner Lied About Whitlam Debt’

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Soros: ‘Very Cautious’ On China

27 Feb

International financier George Soros has confirmed concerns expressed by leading international economists on the possibility that the Chinese economy is in a “bubble”:

A hard landing for Chinese markets could come, Soros said, due to a significant increase in supply offset by falling demand. China’s regulatory authorities have managed the situation well thus far, he said, but he’s concerned about how various countries are maneuvering in the face of global imbalances…

“I’m very cautious, until the economy cools off a little“…

“The overheating, the inflation, the harsh policy tightening is happening right now and it will continue to happen until the economy cools off. And with this explosion of credit, there are bound to be non-performing loans in due course. The extent depends on whether it is a hard landing or soft landing…”

Speaking about the global economic recovery, Soros commented:

“The recovery has been anemic; this was to be expected. But now, the increasing concern about rising sovereign debt is working against continued stimulus. And that increases the threat of a double dip. The rising concerns on sovereign debt increases the prospect of a double dip.”

Asked whether he thought that the major economies have taken sufficient action to address fundamental problems of the world economy in the wake of the Global Financial Crisis, such as global imbalances, Soros responded:

No. The global imbalances have continued to increase. Notably, China continues to run a very big current account surplus. That is one reason why an appreciation of the renminbi would be desirable. The task of correcting those imbalances hasn’t yet begun to be addressed.

Meanwhile, in Australia all our economic leaders remain convinced of a China-funded economic miracle, confidently expecting that the Chinese economy will give us up to 4 more decades of “unprecedented prosperity”.

It seems only Barnaby Joyce has his head out of the sand.

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Tanner $6B Out on Debt

25 Feb

Media Release – Senator Barnaby Joyce, 25 Feb 2010

Finance Minister Lindsay Tanner today on Fairfax Media, shows yet again he is a person who doesn’t “dot the i’s and cross the t’s”.

Asked what Australia‘s government gross debt was, he said and I quote, “The most recent actual number is about $120 billion, that’s the gross, I don’t check day on day, week on week”.

Australia‘s gross debt is actually $126.083 billion. It cracked $120 billion back before the 28thJanuary. So is the best we can hope for month on month? But don’t worry, Mr Tanner, it’s only somebody else’s money and I suppose somebody else has to repay it.

Mr Tanner you should be checking day on day, week on week. You should be dotting the” i’s and crossing the t’s”. You should be doing everything in your power to stop the trajectory that this debt is on.

When you are out by $6 billion and you are the Finance Minister, you do not leave a sense of confidence that you are managing the problem.  It appears you are not even closely watching the problem. Mr Tanner you would have got closer to the number if instead of waving my media releases around in the chamber, you actually read them.

So Mr Tanner, if you are not watching our debt, who in the government is?

For more information –
Jenny Swan
Office of Senator Barnaby Joyce,
Leader of the Nationals in the Senate
02 6277 3697
0438 578 402
jenny.swan@aph.gov.au

Note: Unlike Lindsay Tanner –  the responsible Finance minister – Barnaby Joyce is right up-to-the-minute with his knowledge of the debt numbers. Even the Australian Office of Financial Management (AOFM) has not yet updated their home page to reflect the additional $600 million in Commonwealth Treasury Notes that were auctioned off today.

Finance Minister Lindsay Tanner today on Fairfax Media, shows yet again he is a person who doesn’t “dot the i’s and cross the t’s”.

Asked what Australia‘s government gross debt was, he said and I quote, “The most recent actual number is about $120 billion, that’s the gross, I don’t check day on day, week on week”.

Australia‘s gross debt is actually $126.083 billion. It cracked $120 billion back before the 28th January. So is the best we can hope for month on month? But don’t worry, Mr Tanner, it’s only somebody else’s money and I suppose somebody else has to repay it.

Mr Tanner you should be checking day on day, week on week. You should be dotting the” i’s and crossing the t’s”. You should be doing everything in your power to stop the trajectory that this debt is on.

When you are out by $6 billion and you are the Finance Minister, you do not leave a sense of confidence that you are managing the problem.  It appears you are not even closely watching the problem. Mr Tanner you would have got closer to the number if instead of waving my media releases around in the chamber, you actually read them.

So Mr Tanner, if you are not watching our debt, who in the government is?

For more information, Jenny Swan

Office of Senator Barnaby Joyce,

Leader of the Nationals in the Senate

02 6277 3697

0438 578 402

jenny.swan@aph.gov.au

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