Tag Archives: budget

It Has Begun – Labor Steals Liberal’s Idea To Steal Your Super

27 Sep

Ever heard of the ATO’s “Small Business Superannuation Clearing House”?

You have now.

It’s new.

And it is a title that should make the hairs on the back of your neck stand up.

Because what it is, is the beginning of the end of your chances of ever seeing all of your super.

Or possibly … worst case scenario, but ever the more likely the younger you are … the beginning of the end of your chances of ever seeing any of it.

Exactly as predicted and forewarned by this very blog for months now.

Your humble blogger found a very interesting letter in his In tray on arriving at work yesterday.

From the Australian Tax Office (ATO).

It is proof positive of what I have been repeatedly warning readers is coming, in our near future.

Our government … both “sides” … are planning to steal our super.

There is something particularly interesting about this letter (copy below) from the Australian Tax Office to my own small business.  It proves that the Green-Labor government are now going to steal your super by means of a policy idea that they have stolen from the Liberal Party.

Yes, that’s right.

The lazy incompetent useless public-trough-swilling bastards presently “running” our country (into the ground) can’t even come up with an original way to thieve and pillage your retirement savings – so they’ve resorted to stealing a Liberal Party plan instead.

That story was broken right here on barnabyisright.com on June 7th, just 4 days after the Liberal Party quietly announced it as their policy – “Liberal Party’s Sneaky Plan To Steal Your Super To Pay Labor’s Debt”.

I strongly urge you to first read the article linked above.

And for a full background of a world in which governments across the globe – including the USA, UK, France, Ireland, and many more – are all sneakily stealing their citizens’ super, please read “Stealing Our Super – I DARE You To Ignore This Now”.

It will help you to be properly prepared for today’s shock news.

Finished? You now understand what is happening in the big bad world of superannuation theft, and what the Liberal Party’s sneaky plan is?

Good.

Read on, dear reader, for clear evidence of why you simply cannot trust either “side” of politics in this country:

(Click to enlarge)

Get the picture?

The government’s new Small Business Superannuation Clearing House is an ATO department. The government plans to have your employer send your superannuation directly to their ATO “Clearing House” … not directly to your super fund, as it is now.

It’s all so well-intentioned, you know. Really. It’s all so very innocent … a “helpful” “reform”, only intended to save your boss time and hassle, of course.

And this is unquestionably a Liberal Party policy.

The only difference, is that the ALP’s version of this policy to steal your super is … surprise surprise … less efficient than the Liberal’s version.

Because the Liberal’s version planned to encourage employers to send your super to the ATO, along with their quarterly GST (BAS) payment. Your super, and their GST.  All in one easy payment … to the ATO. That’s Liberal Party efficiency for you.

By using the deceitful disguise of a great “helpful” “reform” to “cut red tape” for small business, the Liberal’s policy sneaks under the radar with the attractive appeal of killing two birds with one stone … saving the employer even more time and hassle.

And both sides of politics present their sneaky scheme scam to steal your super using exactly the same kind of warm and fuzzy, butter-wouldn’t-melt-in-our-mouths and you-can-trust-us-we-wouldn’t-harm-a-fly language style.

Check out the Orwellian language of the ALP’s letter from the ATO announcing this wonderful new scheme:

Are you a small business or organisation with fewer than twenty employees?

If so, you are eligible to use the Small Business Superannuation Clearing House (Clearing House).

This service offers a number of benefits to small businesses as:

  • it is free
  • it is simple to use
  • it reduces the time and paper work involved in making multiple payments to different superannuation funds and
  • it helps you meet your superannuation guarantee obligations.

Arrrrrrgggghhh! Am I in the presence of one of those pathetic spruikers standing outside a low-rent retail shop wearing a gaudy suit and brandishing a microphone whilst annoying the passersby? I think I’m drowning in snake oil!

This is pure propaganda – the doublespeak language of perception management. It is remarkably akin to that used in those patheticly transparent Readers Digest-style junk mail scams – “Congratulations, you are eligible to win a mansion on the Gold Coast … just send your money here.”

I’m “eligible” to use this wonderful new service of the ATO?  Wow! I feel so blessed, so honoured, to be a chosen one.

Now compare to the Orwellian language of the Liberal Party’s policy announcement back on June 3rd … starting with the Orwellian title –

Further relief for small businesses

For small business men and women, less paperwork means higher profits, boosted sales and more time with the family.

If we want stronger and more cohesive communities, we need stronger and more prosperous businesses: …

Oh wow! Yes please Mr Abbott! I want relief from the terrible burden of conscientiously looking after the best interests of my wonderful, hard-working, loyal employees, who are really more like family … I really really do!

How could we employers not all leap and dance with exultant rejoicing about that!

All that terribly challenging and time consuming “red tape” work … of clicking “print” and printing off several different envelope address labels to different super funds (or sacre bleu! hand writing each one!!) … once every 3 months … saved!

Now, all thanks to our wise and caring government, we employers can just print one envelope every 3 months. Make one electronic funds transfer.

And send all your super, dear employed reader, straight to the ATO.

Naturally, we can all completely trust the ATO to pass it all on immediately to your super fund.

And not, perchance, happen to sit on those tens of billions per quarter for (let’s say) a few weeks, and thus siphon off some short-term money-market interest for themselves first.

Yes, oh yes, dear reader … of course we can trust the ATO to do the right thing with your super.

Just like we can trust Green-Labor and the Liberals not to cast their greedy eyes over Australia’s existing $1.3 Trillion pool of citizens’ superannuation, and concoct oh so reasonable-sounding, “helpful” “reforms” that just happen to steer your retirement savings into their own coffers.

To pay down the debts they have accrued.

To fund their lavish, all-expenses-paid, high flyer lifestyles.

And … to finance their index-linked, high 6-figure retirement in the lap of luxury, after they’re done ruining the country for all the “little people”.

The new ATO “Small Business Superannuation Clearing House.

Oh, yes. It’ll be “clearing” out your super all right.

Don’t you worry about that.

Here’s roughly how it will go, dear reader.

Mark my words.

Stage 1 – it’s already here … a “helpful” option, just for small business (who employ 60% of all Australian workers).

Stage 2 – this “helpful” option extended to include larger businesses.

Stage 3 – the option is no longer an option.

Stage 4 – a financial crisis or other plausible-sounding excuse is used to justify compulsory acquisition of some (or all) of your super. Exactly like what has already happened in the USA, UK, Ireland, France et al. Once again, it will be touted loudly by our political overlords as a “helpful” “reform” … perhaps to “preserve” what is left of your super after another market crash, via putting your super into a (compulsory) “government-guaranteed” “safe” “investment”.

Drip drip drip drip.

Fabian socialist tactics at their finest.

And most obvious.

WAKE UP AUSTRALIA.

It’s long past time for real change in our political system.

Beginning with … bringing to an end the entrenched “Two Major Party” political system.

A perverse system that is ably supported and sustained by its lifeblood – our wholly undemocratic compulsory voting system.

(Achtung! You vill vote in our vonderful “free” and “open” democracy, dear reader … yes, you vill. ‘Coz if you do not vote for one of de useless self-serving cretins that our taxpayer-financed party machines offer you as “choice” in your electorate, then ve vill fine your miserable arse … and ve vill throw you in der cooler if you don’t pay!)

There is a way to change the system, dear reader.

And your humble blogger will have more news on how you can get involved in making it happen … soon.

Still Pointing To The IMF’s Opinion Now, Wayne?

24 Jul

Remember when Treasurer Swan repeatedly pointed to cherry-picked comments by the IMF, as though they should somehow be construed as proof of Labor’s economic management throught the GFC?

In light of his government’s/the Treasury’s “truly extraordinary” assumptions underlying the “stratospheric” growth forecasts in the May budget, any bets that Wayne won’t be pointing out what the IMF is saying now, about China’s darkening economic prospects?

From Dow Jones Newswires via the Australian (emphasis added):

China’s manufacturing sector shrinks, HSBC’s preliminary PMI survey signals

HSBC’S preliminary survey of China’s factories indicated manufacturing activity in the world’s second-biggest economy in July declined from last month, the first such contraction in a year.

The survey comes at a time when various economic indicators in China are pointing in different directions, leaving market participants unsure if they should be more concerned about slowing growth or high inflation.

The International Monetary Fund released its annual review of China today, warning that inflation, real-estate bubbles and weak monetary controls pose “significant risks to financial and macroeconomic stability” in the world’s second-biggest economy.

“Significant risks” to the financial and economic stability of the nation whose massive, regional “shadow-banking” credit-fuelled “stimulus” in the GFC was almost solely responsible for our not following after the USA, UK, and Europe.

I think that I can safely guarantee that you won’t be hearing Wayne trumpet that comment from the IMF.

Swan: We Created Every Single New Job In The Entire Nation Since We Came To Office … And 10,000 More, That Don’t Even Exist

22 Jun

Goose talking "jobs jobs jobs"

Do you remember Wayne’s pre-budget mantra?

That big red herring about jobs – the one that the entire Australian media corps swallowed hook, line, and sinker?

We created 750,000 jobs since we came to office when other nations shed millions of jobs…

Back in early May, we first debunked Wayne’s Big Lie ( “Behold, Wayne’s Große Lüge” ), simply by comparing his own Final Budget Outcome 2009-10 to the Final Budget Outcome for 2007-08, the year that Labor came to office.

Of course, that simple comparison using government budget documents did not take into account a number of factors. Including what may have happened in the employment trends between the end of financial year 2010, and Wayne’s grand claim in May 2011.

So now, dear reader, we present for your enjoyment the definitive proof. The Australian Bureau of Statistics (ABS) Labour Force data from November 2007 (the month that Rudd won the election) through to May 2011 (the month in which Wayne was frantically waving his “jobs jobs jobs” red herring, to distract from his upcoming record-high budget deficit announcement).

First, here is a chart for Full-time employed persons:

Click to enlarge

That’s a grand total of (8.0271 million – 7.6689 million) 358,200 more Full-time employed persons now, than in November 2007.

Second, here is a chart for Part-time employed persons:

Click to enlarge

That’s a grand total of (3.4135 million – 3.0317 million) 381,800 more Part-time employed persons now, than in November 2007.

For a grand total of … 740,000 more employed persons than in November 2007.

In a nation where the population increased by 1.237 million from September 2007 to September 2010 (the latest data), including a natural increase of 0.5 million (births minus deaths):

Click to enlarge

Now, what was that you said, Wayne?

We created 750,000 jobs since we came to office when other nations shed millions of jobs…

Let’s take a moment to enter an imaginary parallel universe.  A fantasy world where the Australian private sector – that’s every non-government business in the nation – did not create a single new job – full or part-time – in the past 3.5 years. 

Not one.

According to the official ABS data, even if the entire private sector did not create a single new job, and instead, we swallow the patently absurd notion that Labor alone was responsible for creating every single new full-time and part-time job in the entire country over the past 3.5 years, Wayne’s claim would still fall short long.  By 10,000 jobs.

Now, perhaps you are one of the eagle-eyed readers who has spotted the big 80,000 fall in full-time employed persons in April-May.  An ominous collapse, only one-tenth less than the GFC-triggered f/t employed persons plunge in Feb-Mar 2009.

And perhaps you are also quick-witted enough to be thinking, “Hey wait on there mate, Wayne couldn’t have known the May figures in early May, could he?”

And you would be right on both counts.

Doesn’t help our Wayne’s claim though.

Because if you calculate November 2007 through April 2011 instead, you get a grand total of … (380,200 F/t + 352,000 P/t) 732,200 employed persons.

Meaning, his lie was even bigger than you thought.

Be-holed, Wayne’s Große Lüge.

If you are going to lie, make it a Big Lie.

And repeat it often.

If you haven’t dug your fork in to check if this goose is fully cooked yet, then you might also enjoy our debunking of Wayne’s “But wait … there’s more!” free steak knives claim.

That the government “will create half a million more” jobs in the next two years.

A ridiculous lie that is clearly betrayed by the evidence buried in the fine print of his own May Budget documents –

Economic parameter variations are forecast to reduce expenses in 2011‑12 and over the forward estimates … Partly offsetting these reductions … an upwards revision in the estimated number of unemployment benefit recipients is expected to increase expenses in 2011‑12 compared to MYEFO, although this is partly unwound by a reduction in the forecast of the number of unemployment benefit recipients in 2012‑13.

Budget 2011-12 | Budget Paper No. 1, Statement 6, Table 2

Dig your fork in here – “Half A Million Jobs” – Wayne’s Big Lie (Reprise)

Today's Special - Roast Goose

Future Fund Boss’ Debt Warning: Barnaby Is Right

21 Jun

From The Australian:

Future Fund chairman David Murray has urged governments to heed the lessons of the European and US sovereign debt crises as growing state and federal borrowing pushes their financial liabilities past half a trillion dollars in the new financial year.

Analysis by The Australian finds the states are forecasting their net-debt levels will surge from almost $102 billion this year to $135bn next year to help fund upgrades to rundown electricity, water and other infrastructure.

This will help push their net financial liabilities – a figure that includes liabilities for pension benefit schemes – to a record $285bn next year.

On top of this, the federal government’s net debt levels will rise from $82bn this year to $107bn next year – largely to fund the budget deficit – helping to drive their liabilities from $200bn to $227bn.

The surge in debt prompted Mr Murray to warn that this could force the private sector to compete for funds as the resources sector booms.

All of which is exactly what Barnaby Joyce warned of 18 months ago, and repeatedly since.

It’s also worth noting that this is the boss – though not for much longer – of the Future Fund.

Barnaby Joyce has warned at least twice this year, that the government plans to steal our super to pay down debt – starting with public servants’ superannuation in the Future Fund:

In response to a question I put in Senate estimates, Treasury revealed that $64 billion of the difference between our gross debt and our net debt is made up of the cash and non-equity investments of the Future Fund. The Future Fund is there to cover the otherwise unfunded costs of public servants’ superannuation.

That is a little fact that the people of Canberra might be interested in. When Wayne mentions net debt translate that to, I am going to pay his debt off with my retirement savings.

And more recently, straight after the May budget, Barnaby spelled out his warning even more clearly:

On Tuesday night’s budget, Labor sneaked in an Amendment of the Commonwealth Inscribed Stock Act 1911. Here is the most telling statement for where our nation is going under this Green-Labor-Independent Alliance. Under Part 5 Section 18 subsection 1 “omitting ‘$75’ and substituting ‘250’ ”.

Now that is in billions ladies and gentlemen and it is real money that really has to be paid back. If we have all this money stashed away under the lower net debt figure that is always quoted by Labor, then why not use some of this mystery money to pay off what we owe to the Chinese and others who we are hocked up to the eyeballs to.

The reason why we can’t is at least $70 billion that makes up ‘net’ debt is tied up in the Future Fund and student loans.

Of course, the public servants will not be happy when we use their retirement savings, put aside in the Future Fund, to pay off some of Labor’s massive debt.

Pinching public servants’ superannuation will only be the beginning. We know this simply by looking at what is happening abroad.

Learn all about the wave of government confiscations of private superannuation savings that is quietly sweeping the Western world, and how both major parties in Australia already have policies to do the same, in “No Super For You!!”.

Barnaby is right.

Barnaby’s E-Newsletter – June 2011

21 Jun

Download it here (right click and “save as” … pdf).

A couple of highlights:

At a time when Australian families are facing severe cost of living pressures, Labor’s Budget has cut support for families and hit them with new and higher taxes.

The Budget strips $2 billion from families by freezing for three years the indexation of key family tax payments and income thresholds.

Headline budget results

• The budget deficit this financial year is $7.9 billion worse ($49.4 billion)

• The budget deficit next financial year is $10.3 billion worse ($22.6 billion)

• The result is net debt will grow to over $100 billion next year and stay over $100 billion for the rest of the forward estimates.

• This will be record levels of debt. Over $10 billion more than the debt Keating left the Howard Government in 1996.

It’s YOUR debt

In the three and a half years, the Commonwealth Government has increased debt by $150 billion. This is not the Government’s debt. It is your debt. One day current and future Australians will have the burden of
paying this borrowed money back.

There are 12.3 million taxpayers in Australia. Every taxpayer owes an extra $12,314 now that Labor has put $150 billion on the nation’s credit card.

The cost of living just keeps going up

When governments borrow they compete for money with private individuals and companies who want to borrow for a new home or to invest in a business. This pushes up interest rates, the price of money.

Over the last 30 years, interest rates have averaged 11.6% under Labor governments and 8% under Coalition governments. This difference would add an extra $770 to the monthly mortgage payments on the average
Australian home loan.

Already since Labor came to power, electricity prices have gone up 51 per cent, water prices 46 per cent and gas prices 30 per cent.

And living costs are set to go up even further. A carbon tax will add another $300 to average annual electricity costs, petrol prices will go up by another 6.5 cents a litre and the cost of building a new home will go up by over $6,000.

All of these costs will be on top of the need for the average taxpayer to pay their $12,314 share of Labor’s debt. How many more years of this Green‐Labor‐Independent government can you afford?

WHAT IS A CARBON TAX … AND WHO WILL PAY IT?

Carbon is present in all forms of life and most fuels. When fuels are consumed to produce energy, the carbon is emitted as carbon dioxide. A carbon tax is a tax that is levied on carbon dioxide emissions.

So any practice that creates emissions—whether it’s turning on a light, driving a car or manufacturing food and other goods—will incur a carbon tax.

Under the government’s plan, the carbon tax will be imposed directly on companies and indirectly on everybody else as those companies increase their prices to recover the tax. For families and small businesses, that will mean either spending more—or consuming less.

What prices will rise?

Prices for most goods and services will go up. A key target of the carbon tax will be electricity generators. Because electricity is used in making and delivering virtually all goods and services, the cost of the carbon tax to the electricity companies will be passed on to the consumers and small business.

When the carbon tax is applied to petrol, those prices will go up for the same reason.

At the family level, the biggest direct impact will be more expensive power, petrol and grocery bills, but many more consumer items will increase in price as well because of increased manufacturing and transport costs.

How much will it cost?

That depends on the level of the tax and how widely it is applied. It will likely start at between $20 and $40 per tonne of carbon emissions and rise from there.

If it’s applied to petrol, prices will increase by 2.5 cents per litre for every $10 of carbon tax. So a carbon tax starting at $25 per tonne will result in an initial increase in petrol prices by 6.5 cents per litre.

At that carbon price, electricity bills would rise by about $300 a year for most families. For instance, a $40 per tonne carbon tax would increase petrol prices by about 10 cents per litre.

Regardless, the Gillard government’s chief climate adviser Professor Ross Garnaut has admitted that “Australian households will ultimately bear the full cost of a carbon price.”

The carbon tax will have a cascading effect on the economy because it will hit every stage of the supply chain, ever‐increasing the cost to you along the way.

Here’s Barnaby speaking against the carbon dioxide tax at the Port Macquarie No Carbon Tax rally:

Macquarie Bank Shreds Labor’s “Truly Extraordinary” Budget Growth Forecasts

17 Jun

Not wanting to recap the insult to intelligence that was the May Budget. But when one comes across a critique from Macquarie Economic Research that so comprehensively rips to shreds the Government’s all-important economic growth forecasts, one feels strangely compelled to share it.

You can read the entire paper here, but following are the choicest morsels (emphasis added):

Could Australia’s policymakers be too optimistic on our growth forecasts?

Upbeat growth forecasts from the Treasury and the Reserve Bank of Australia (RBA) are based on very optimistic forecasts for private sector business investment. But, if the RBA’s investment forecasts are too optimistic, not only will investment be weaker, but so too will consumption and housing, as weaker growth results in less income growth and declining confidence. This would not only mean that tighter policy was not required, but even that current policy settings could be too restrictive.

But hang on … wasn’t it only a couple of days ago that our blithering idiot RBA Governor was out spruiking the case for hiking interest rates even more?

The RBA and Treasury forecasts for business investment over the next couple of years are truly extraordinary. Treasury expects non-residential construction to double by mid 2013, while the RBA forecasts are predicated on mining investment doing the same thing.

To put this in perspective, the expected lift in mining investment is equivalent to doubling new housing construction from 150,000 units per year, to 300,000 dwellings in the next two years. Another way to look at this is that the value of mining investment in the next two years is expected to be the same as all the mining investment that took place between 1989 and 2006.

Seven years worth of all-time record high mining investment … in just two years?  Perhaps we should give them credit for positive thinking.

But is it realistic thinking?

In our opinion, achieving such stratospheric growth would be extremely difficult.

We’ll take that as a polite “No”.

For example, during the largest mining investment boom in Australia’s history, investment increased from about one per cent of GDP to three per cent of GDP. That is, it took five years for mining investment to increase by two percentage points of GDP. Now, the RBA and Treasury expect mining investment to rise by three percentage points of GDP over a couple of years.

Has anyone mentioned to the #JAFA‘s in the RBA and Treasury, that the economist who gained most fame from predicting the GFC has now predicted a “perfect storm” for the world economy “by 2013 at the latest”? And said that he expects China’s economy to have a “hard landing”?

By putting all their eggs in the mining investment basket, policymakers appear to have no Plan B for what will support the economy if investment disappoints. And this note provides three clear reasons why one should be cautious about counting those mining investment chickens before they are hatched.

Pretty much exactly what Senator Barnaby Joyce has been saying  from Day 1.

That we can’t rely solely on selling “red and black rocks” at record-high prices forever; that we need to become “more self-reliant”; and that we need a “contingency plan” against economic dangers from abroad.

So Wayne, about that “forecast” for a single year of budget surplus in 2013?

~ crickets ~

You’ve had your lackeys in Treasury cobble together a budget chock full of utterly unrealistic growth assumptions, hoping to keep the media and the great unwashed masses docile and con-fident in your economic management, right?

And then, when you make a pigs breakfast of it again, you’ll just fake up the actual growth numbers down the track, right?

Just like before … right? (see “Labor Fakes GDP By 4.5%” )

This economic forecasting game is too easy.

So before you dispose of those pig entrails … can anyone play?

Labor Dodges Scrutiny To Lift Debt To $250 Billion

12 Jun

We covered this topic a month ago ( “Swan Raises Govt Borrowing Limit By Another $50Bn – And Don’t Ask Questions” ) – immediately after the budget, in fact.  But still, it’s nice to see the Liberal Party formally commenting on it:

The Gillard Government is pressing ahead with its plan to ramp up the Commonwealth debt limit to $250 billion while avoiding proper parliamentary scrutiny.

“Today Labor arrogantly opposed an amendment I moved to give the parliament the opportunity to consider separately and vote on the proposed increase in the borrowing limit,” Shadow Minister for Finance Andrew Robb said.

“Just two years ago the government raised the debt limit from $75 billion to $200 billion citing ‘special circumstances’ post GFC. They did this through a standalone proposal which was rightly considered by the parliament.

“This time they want to lift the debt ceiling to $250 billion and have buried the proposal – which includes the repeal of the ‘special circumstances’ clause – under the primary budget bill in a secondary Appropriation Bill.

“This tricky move denies the parliament the opportunity to debate the proposal in detail, to amend it, support it or oppose it,” Mr Robb said.

“The Gillard government should be embarrassed, that despite all their talk about fiscal consolidation, they clearly have no control over the nation’s finances hence the need to borrow yet another $50 billion.

“They are trying to slip this through on the sly to fund their extraordinary $135 million-day-borrowing habit. The budget papers show that the face value of government debt is expected to be $192 billion at 30 June, so they are on the verge of running out of money under the current limit.

“When the Rudd-Gillard government came to office it inherited a budget which was not only debt free, but had $70 billion in reserves. To go from this situation to approaching $250 billion in debt in less than four years is simply extraordinary and highlights the true extent of Labor’s reckless and wasteful spending.

“Considering the vulnerability of the economy, to external shocks, as demonstrated by the first quarter of negative growth in more than two years, I would urge the government to split its budget bills before a final vote and allow proper scrutiny of its plan to saddle taxpayers with yet another $50 billion in debt,” Mr Robb said.

Barnaby was on to this – in a very public op-ed article – the day after the budget in which it was (quietly, sneakily) announced.

And that was also when he pointed out the emperor’s clothes once again.

To wit, the fact that Labor’s ever-rising debt means that our government will, like the rest of the West, in the end, steal our super to pay down debt.

He’s proven himself to be the only one who is truly on the ball.

Liberal Party’s Sneaky Plan To Steal Your Super To Pay Labor’s Debt

7 Jun

From the Liberal Party’s website, Latest News, 3 June 2011:

The Coalition will relieve the red tape burden from Australia’s small businesses by giving them the option to remit the compulsory superannuation payments made on behalf of workers, directly to the ATO.

Small business will be given the option to remit superannuation payments to the ATO at the same time as they remit their PAYG payments.

This will require only one payment to one agency – rather than multiple cheques to multiple superannuation funds. The ATO will be responsible for sending the money to superannuation funds directly.

Senator Barnaby Joyce writing for The Punch, 13 May 2011:

On Tuesday night’s budget, Labor sneaked in an Amendment of the Commonwealth Inscribed Stock Act 1911. Here is the most telling statement for where our nation is going under this Green-Labor-Independent Alliance. Under Part 5 Section 18 subsection 1 “omitting ‘$75’ and substituting ‘250’ ”.

Now that is in billions ladies and gentlemen and it is real money that really has to be paid back. If we have all this money stashed away under the lower net debt figure that is always quoted by Labor, then why not use some of this mystery money to pay off what we owe to the Chinese and others who we are hocked up to the eyeballs to.

The reason why we can’t is at least $70 billion that makes up ‘net’ debt is tied up in the Future Fund and student loans.

Of course, the public servants will not be happy when we use their retirement savings, put aside in the Future Fund, to pay off some of Labor’s massive debt.

So you won’t vote for the Coalition then?

There’s no salvation on the Left.

Labor has already introduced legislation in the 2011-12 Budget that aims to grab your super too.

In fact, Labor’s Minister for Financial Services and Superannuation, Bill Shorten, published an op-ed a month ago stating that he views your super as “our sovereign wealth fund”.

There is a wave of government confiscations of private retirement savings rolling around the Western world right now.  The first ripples have quietly rolled onto our shores already.

Your super savings are not safe.

From either party.

Learn the full story, in “No Super For You!!”

No Super For You!!

6 Jun

* Extended update of original article published 18 May 2011. Includes details of a disturbing new Liberal Party policy, announced Friday 3 June.


What will you do when they take away your super?

From the Washington Post, 17 May 2011:

Treasury to tap pensions to help fund government

The Obama administration will begin to tap federal retiree programs to help fund operations after the government lost its ability Monday to borrow more money from the public, adding urgency to efforts in Washington to fashion a compromise over the debt.

Treasury Secretary Timothy F. Geithner has warned for months that the government would soon hit the $14.3 trillion debt ceiling — a legal limit on how much it can borrow. With that limit reached Monday, Geithner is undertaking special measures in an effort to postpone the day when he will no longer have enough funds to pay all of the government’s bills.

Geithner, who has already suspended a program that helps state and local government manage their finances, will begin to borrow from retirement funds for federal workers.

The USA is taking public servants’ pension funds, to pay government bills.

Note that well.

Because just over 3 weeks ago – and 4 days before that Washington Post story hit the wires – our own Senator Barnaby Joyce made a very disturbing revelation (below).

Think it could only happen in America?

From Reuters, 21 October 2008:

Argentina’s center-left President Cristina Fernandez on Tuesday signed a bill for a government takeover of the $30 billion private pension system in a daring and unexpected move that rocked domestic markets.

From Bloomberg, 26 November 2010:

Hungary is giving its citizens an ultimatum: move your private-pension fund assets to the state or lose your state pension.

Economy Minister Gyorgy Matolcsy announced the policy yesterday, escalating a government drive to bring 3 trillion forint ($14.6 billion) of privately managed pension assets under state control to reduce the budget deficit and public debt. Workers who opt against returning to the state system stand to lose 70 percent of their pension claim.

“This is effectively a nationalization of private pension funds,” David Nemeth, an economist at ING Groep NV in Budapest, said in a phone interview. “It’s the nightmare scenario.”

But Argentina and Hungary are not like us, right? That couldn’t ever happen in a Western economy like ours, could it?

From eFinancialNews, 29 November 2010:

France seizes €36bn of pension assets

Asset managers will have the chance to get billions of euros in mandates in the next few months for the €36bn Fonds de Réserve pour les Retraites (FRR), the French reserve pension fund, after the French parliament last week passed a law to use its assets to pay off the debts of France’s welfare system.

Oh, but that’s France. They’ve got hangover problems from the Global Financial Crisis, right? That couldn’t happen in a really strong economy like ours, one that sailed through the GFC without even having a recession … right?

Wrong.

Poland was the only economy in the European Union to achieve economic growth through the GFC. It then doubled economic growth in 2010. It is the sixth largest economy in the EU, and is considered “Europe’s new economic superstar“.

Despite this apparent success, Poland too has just passed new laws to steal more of its citizens’ private retirement savings.

From Warsaw Business Journal, 9 May 2011:

The government’s controversial pension reform plan, which slashes the percentage of workers’ salaries going to private pension funds (OFEs) from 7.3 to 2.3 percent, became law on May 1. OFEs will start receiving the reduced amounts from June.

The changes mean that the state-controlled social security and pension fund, ZUS, will now receive 17.22 percent of workers’ salaries…

Critics have said the changes were nothing more than some creative accounting by the government to shore up its budget deficit

And from Global Pensions, 6 May 2011:

It appears moving backwards on pension reforms has become the thing to do on both sides of the Atlantic.

Hungary last year moved much of its private pension assets to the state. Last month, new rules came into effect in Poland diverting 5% of the 7.3% of salary going to private pension funds to the state.

another recent reversal we’ve seen has come from Latin America. In the 1990s, Bolivia’s decision to move its pension assets from the state to private managers placed it among the most advanced pension systems in the region. However, the current government has decided to nationalise the assets once more claiming it is creating a pension system that is equal for all.

Oh yes, but Poland is really just a Central European economy, not long removed from communism. Something like that couldn’t ever happen in a mid-level, “advanced Western economy” like ours … right?

From Business Insider, 10 May 2011:

Irish Bombshell: Government Raids PRIVATE Pensions To Pay For Spending

“The various tax reduction and additional expenditure measures which I am announcing today will be funded by way of a temporary levy on funded pension schemes and personal pension plans.”

But the Irish had a really big housing bubble, didn’t they? No way anything like that could happen here … right?

From the Sydney Morning Herald, 4 March 2011:

Australian house prices remain the most overvalued in the world, according to the latest quarterly ranking of global house prices by The Economist magazine.

But our housing market could never fall. Not like it did for Ireland … or the USA … or the UK … or Spain … right?

From AAP, 29 April 2011:

Capital city home prices have posted their biggest quarterly fall in at least 12 years, as more stock in the housing market allows prospective buyers to wait for bargains, a survey shows.

Capital city dwelling values fell by a seasonally adjusted 2.1 per cent in the first quarter of the year, according to the latest RP Data-Rismark Home Value Index.

The quarterly change was the steepest since the index series began in June 1999, RP Data research director Tim Lawless said.

And from the Sydney Morning Herald, 17 May 2011:

Real estate slump will leave banks in pain too

Australian real estate, long the subject of global concern, bears all the symptoms of a market that simply has run out of puff.

Ever since America’s housing bubble burst in 2007, setting off a chain reaction in Britain and across Europe – which then infected the global financial system – international pundits have been warning of a similar catastrophe here.

Do you remember what our government did the last time our real estate market began to fall sharply?

It was during the 3-month peak of the GFC, in late 2008 / early 2009:

Steve Keen's Debtwatch

The Labor Government guaranteed to use taxpayers’ future earnings to underwrite our banks’ trillions in foreign liabilities. Poured $20 billion in borrowed money into Residential Mortgage-Backed Securities (RMBS). And borrowed billions more to prop up the housing market. How? By bribing thousands of young people into massive debt, thanks to the government’s double-trouble First Home Owners Grant.

About that $20 billion in RMBS that Wayne Swan purchased.  With borrowed money. Just how safe is that $20 billion “investment” looking?

From the Sydney Morning Herald, 26 May 2011:

Arrears on mortgage repayments spiked to a record high in the first three months of 2011, as more Australians struggle with rising costs, Fitch ratings agency says.

Arrears on prime residential mortgage-backed securities (RMBS) of 30 days or more hit a record high of 1.79 per cent in the first quarter, from 1.37 in the final quarter of 2010, the group said, as Christmas spending and the Queensland floods forced more Australians to struggle in repaying their mortgages.

RMBS are home loans which are bundled together and sold to institutional investors by banks and mortgage lenders. Misrated RMBS were at the heart of the subprime crisis in the US which lingers to today.

It only gets worse though:

The increase in arrears for the most fragile band of mortgage borrowers, low-doc loans, with payment delays of 30 days or more hit 6.74 per cent in the first quarter, up from 5.7 per cent in the final quarter of 2010, a higher level than December 2008 quarter, when the financial crisis hit and the Reserve Bank began rapidly lowering rates.

Low-doc mortgages are written for riskier borrowers than prime mortgages, which are written for customers who have a reasonably safe ability to borrow.

Delinquencies of three months or more on conforming low-doc mortgages, which are used by people who are self-employed for example, soared past 5 per cent in the March quarter, from about 3 per cent the December 2010 quarter.

Would our Wayne have “invested” any of that borrowed $20 billion in low-doc RMBS?  Or, did he stick with prime RMBS?

From the Australian Office Of Financial Management website:

Purchase of RMBS – Program Update

Minimum Eligibility Requirements

* Low documentation loans, that is loans underwritten using alternative income verification procedures, may be included in mortgage pools.

Well done Wayne.

$20 billion worth of RMBS. With low-doc loans included. A brilliant government “investment” in keeping our property bubble inflated. And now that investment too, is failing, with record-high arrears on the mortgages backing those “securities”.

But there’s nothing really to worry about, because we’ve got the “strongest banking system in the world”, right? Even if the property bubble does pop, our government would never need to go looking for even more money, to bail out our banks … right?

On 17 May 2011, leading credit rating agency Fitch’s downgraded 54 ‘tranches’ of Australian Residential Mortgage-Backed Securities, indicating that “cash-strapped borrowers and tight-fisted mortgage insurers are a greater threat to Australian banks than previously thought.

The next day, another leading credit rating agency Moody’s downgraded our Big Four banks.

From the Sydney Morning Herald, 18 May 2011:

Moody’s Investors Service has downgraded the long-term debt ratings of Australia’s big four banks to Aa2 from Aa1, citing their relatively high reliance on overseas funds rather than local deposits.

Moody’s explanatory paper effectively stated that our banks are Too Big Too Fail.  That the Big Four’s liabilities must continue to be supported by the Australian Government Guarantee For Large Deposits And Wholesale Funding that Labor “decisively” introduced (like Ireland) in response to the GFC. And if the guarantee is removed, Moody’s indicated that the Big Four’s long-term debt ratings will be downgraded by at least two further ‘notches’.

Meaning?

Moody’s has just placed our government on notice.  Australian taxpayers are now effectively on the hook – permanently – to bail out our banks when our housing bubble bursts.

Exactly the same thing that happened in the USA, UK, Ireland, Spain et al.

Don’t believe that we have a housing bubble?  Think the nightmare housing-driven bank collapse scenario that is throttling the rest of the Western world won’t ever happen here?

Fine.

If the housing-collapse trigger event is not enough to bother you, then take a moment to think about derivatives.

Those “exotic” financial instruments that were at the heart of the Global Financial Crisis. The ones that famously prudent investor Warren Buffet referred to as “a mega-catastrophic risk”, “financial weapons of mass destruction”, and a “time bomb”, way back in 2003.

The same kind of exotic instruments that lauded economist Saul Eslake also referred to just a few days ago, in an argument with me on my blog over my criticism of his public lobbying for a carbon dioxide “pricing” scheme (emphasis added):

“And while it is true that banks might make money from an emissions trading scheme, they could just as likely lose (as many banks have done from trading other ‘derivatives’”.

Do our banks have much exposure to derivatives now – even before an emissions trading scheme is introduced?

Sure do.

Prepare to be shocked.

According to RBA statistics at December 2010, Australia’s banking system has $15 Trillion in Off-Balance Sheet “Business”, versus a mere $2.66 Trillion in On-Balance Sheet “Assets”.

And exactly what kind of “business” makes up 92.3% of that “Off-Balance Sheet” $15 Trillion – more than 10 times our nation’s annual GDP?

You guessed it. Derivatives.  Those “financial weapons of mass destruction” which so nearly blew up the whole world in 2008-09.

Finding it a bit difficult to get your head around these huge numbers?  Pictures often help.

Take a look at this simple chart comparing our “safe as houses” banks’ On-Balance Sheet “Assets” (blue line) – which are 66% loans – versus their Off-Balance Sheet “Business”, 92.3% of which is derivatives (click to enlarge):

$2.66 Trillion in "Assets" versus $15 Trillion in Off-Balance Sheet "Business"

Still feeling confident about our banking system?

There’s more.

Australia’s banking system only just dodged a bullet in 2008-09, thanks almost entirely to the government (taxpayer) guarantee which is still in place today.

“Almost” entirely thanks to the government guarantee, you say?

That’s right. Something else helped save our banking system too.

The Australian public remains blissfully unaware that during the GFC, two of our Big Four banks, and our very own central bank, the RBA, all obtained secret emergency loans from the US Federal Reserve – which is simply printing new money, Zimbabwe-style.

From Business Spectator, 3 December 2010:

National Australia Bank Ltd, Westpac Banking Corp Ltd and the Reserve Bank of Australia (RBA) were all recipients of emergency funds from the US Federal Reserve during the global financial crisis, according to media reports.

Data released by the Fed shows the RBA borrowed $US53 billion in 10 separate transactions during the financial crisis… according to a report in The Australian Financial Review.

NAB borrowed $US4.5 billion, and a New York-based entity owned by Westpac borrowed $US1 billion, according to The Age.

If you think “it could never happen here”, if you think that our government would never take away your super to pay for its massively wasteful spending, its crappy “investments”, or to bail out our Too Big Too Fail, very recently downgraded, multi-Trillion derivatives-laden banking system, then it’s time for you to think again.

Were you one of the many who ridiculed Barnaby Joyce’s warnings in late 2009, about the possibility of a US debt default (“Barnaby Warns Of Bigger GFC“)?

That’s coming to pass right now. Trying desperately to avoid a default is the reason why the US Treasury has now resorted to stealing federal workers’ retirement savings, to pay government bills.

So pay close heed to another prescient warning from Barnaby, given on 13 May 2011:

On Tuesday night’s budget, Labor sneaked in an Amendment of the Commonwealth Inscribed Stock Act 1911. Here is the most telling statement for where our nation is going under this Green-Labor-Independent Alliance. Under Part 5 Section 18 subsection 1 “omitting ‘$75’ and substituting ‘250’ ”.

Now that is in billions ladies and gentlemen and it is real money that really has to be paid back. If we have all this money stashed away under the lower net debt figure that is always quoted by Labor, then why not use some of this mystery money to pay off what we owe to the Chinese and others who we are hocked up to the eyeballs to.

The reason why we can’t is at least $70 billion that makes up ‘net’ debt is tied up in the Future Fund and student loans.

Of course, the public servants will not be happy when we use their retirement savings, put aside in the Future Fund, to pay off some of Labor’s massive debt.

!??!

That is exactly what is happening in America. Right now.

And Barnaby is warning that it could happen here too.

The first steps in that direction have already begun.

From Global Custodian (Australia edition), 11 May 2011:

The Gillard government’s 2011-12 budget has proposed a raft of initiatives aimed at encouraging superannuation fund and private investment in infrastructure projects.

In light of the botched “school halls” program, and the stalled white elephant NBN – which so far has only achieved a 12% takeup rate, versus their predicted 58% – would you really trust this government to wisely and prudently invest your super in Government infrastructure projects?

Others have their doubts.

From The Australian, 12 May 2011:

The government’s plan to use tax incentives to encourage superannuation funds to invest in new infrastructure could be thwarted by inadequate returns on projects and a reluctance by the states to take on project risk, experts say.

First, a little “encouragement” for super funds to invest in government spending programs.

Then, when the costs blow out, or when the government debt becomes unmanageable … or when the banks need bailing?

“No super for you!”

Barnaby is the only one on the ball.

And, he is the only politician in Australia with the honesty, decency, and courage, to (once again) try to forewarn the public about the risks of debt, and where this debt train is taking us.

Still not convinced there’s anything to worry about?

Then consider the words of Labor’s PM-in-waiting, the Minister for Financial Services and Superannuation, Bill Shorten. He already thinks of your super as a “significant national asset” … a kind of “sovereign wealth fund”.

From Shorten’s op-ed published in The Australian, 4 May 2011:

Superannuation is our sovereign wealth fund

This week marks 12 months exactly since the government announced plans to take compulsory superannuation from 9 per cent to 12 per cent.

… our superannuation savings place Australia fourth in the world. Its $1.3 trillion in funds under management through superannuation significantly boosts national savings and provides greater retirement security for millions of Australians. Superannuation is also a significant national asset because it strengthens our financial sector.

Superannuation “strengthens our financial sector”? Can you see where this is going?

Shorten and his cohorts already have their eyes on our $1.3 Trillion in super savings. In Labor’s view, your retirement savings are “our sovereign wealth fund”.

When our Too Big Too Fail, derivative-laden banks inevitably run into trouble again – as indeed they are right now with a falling housing market – you should have no doubt that our government will follow the lead of the USA, France, Ireland, Poland, and all the rest, and simply take your super to prop up our “financial sector”.

After all, they have “guaranteed” our banks.  Your future taxes … and if necessary, your super … are the collateral for those guarantees.

But if the Coalition wins government everything will be fine, right?  They’re far better economic managers, right?  We can all trust the Liberal Party not to put their hands on our super, to pay down Labor-incurred debts … right?

Wrong.

Just this past Friday 3 June 2011, the Liberal Party announced a new policy that they will take to the next election. Loaded with weasel words, it is yet another harbinger of the super theft to come, sneakily disguised as a helpful “reform”.

From the Liberal Party website:

Further relief for small business

The Coalition will relieve the red tape burden from Australia’s small businesses by giving them the option to remit the compulsory superannuation payments made on behalf of workers, directly to the ATO.

Small business will be given the option to remit superannuation payments to the ATO at the same time as they remit their PAYG payments.

This will require only one payment to one agency – rather than multiple cheques to multiple superannuation funds. The ATO will be responsible for sending the money to superannuation funds directly.

Can you see the cunning plan here?

Billions and billions of dollars in compulsory superannuation payments, going directly from our employers’ bank accounts to the government’s tax department , every 3 months. And we have to simply trust the government of the day, that every cent of it will immediately be passed on to our private super funds. Not siphoned off into special “investments”, or government accounts.  Or simply “sat on” for a month or so, in order to prop up the government’s weekly cashflow needs.

Oh, but not to worry … it will just be an “option” for “small” businesses to do this, of course.

Right. If you believe that, then I’ve got an air-backed derivative called a “carbon permit” to sell you. Ever heard the old saying, “It’s the thin end of the wedge”?

A final thought.

Our government is presently considering the Garnaut proposal for introduction of a carbon dioxide “pricing mechanism”. A key part of this proposal that has (surprise surprise) drawn strong public support from economists employed by the banking sector, is the suggestion that the billions of dollars raised should be administered by an “independent” Carbon Bank. One that …

…could be allowed to borrow money to invest in renewable energy projects against the future revenue of Labor’s proposed carbon tax and emissions trading scheme.

In other words, a Carbon Bank run by unelected, unaccountable parasites – chosen from the banking sector, no doubt – with the government … meaning taxpayers … acting as the final guarantor for any losses made on their “green” “investments”.

Does that prospect concern you?

Can you see where this is all heading?

We have a government that has already racked up nearly $200 billion in gross debt.

Is running a “forecast” $50 billion annual budget deficit.

Is presently borrowing at a rate of over $2 billion per week.

And – like an America’s “Mini-me” – has now moved to raise our debt ceiling by another $50 billion (ie, a 25% increase), to a new record quarter of a Trillion dollars.

This is the same government of completely unqualified economic incompetents behind a string of costly disasters – killer ceiling insulation, overpriced school halls, “green scheme” rorts, subsidised Toyota hybrids (that noone except government is buying), the problem-plagued Nation Bankrupting Network … and their latest rort-ridden debacle, “free” set-top boxes.

Do you honestly believe that this government would not end up burying taxpayers with even bigger losses from their carbon dioxide “air tax” scheme too?

Do you honestly believe that this government would never follow the lead of Argentina, Hungary, Bolivia, France, Poland, Ireland, and now the superpower USA … and steal your super to pay for massive debts that they have racked up?

These are just some of the many sound reasons why Senator Joyce has persistently tried to raise public awareness of the real and grave peril of ever-increasing government debt and deficit, in a (supposedly) post-GFC world.

Your retirement savings depend upon your taking notice of his warnings.

Barnaby is right.

If like me you are under 50 years old – indeed, if you are under 60 years old – then I’m willing to bet you all of my super that you will never see all of yours.

And unlike our bank(st)ers and government … I never bet.

Our New Treasury Secretary Is America’s Mini-Me

5 Jun

America’s Treasury Secretary, Tim Geithner – the former IMF bankster who Paul Keating rightly called a “gigantic fool” – now  has his very own Mini-me right here in Australia.

New Treasury Secretary Martin Parkinson. Former student of money-printing madman, US Federal Reserve Governor “Helicopter Ben” Bernanke.

What do Tim and Martin share in common?

An insistence on raising our respective nations’ debt ceilings.

The only difference between these two #JAFA lunatics, and the public (taxpayer) debt levels over which they preside … is one of scale.

Consider.

Recently we have seen the USA run into its $14.3 Trillion debt ceiling. And giga-fool Geithner has been loudly proclaiming the dire consequences if the US Congress refuses to raise it even higher.  In another ominous warning of where Australia too is heading, Geithner has started stealing federal employees pensions to keep the government running until August 2, when America will default on its current massive debt unless the #JAFA’s in their Treasury department can get “permission” to borrow-and-spend the American people even deeper into oblivion.

And in Australia?

On Wednesday in Senate Estimates, our Mini-me Martin Parkinson was challenged by Senator Barnaby Joyce over this utterly incompetent and reckless Labor/Green government’s decision, just before the Budget, to sneak in new legislation to raise our debt ceiling too.  By $50 Billion – a 25% increase. To a new all-time record debt level of $250 Billion.

Just like America. The only difference is the scale.

And what did Mini-me Parkinson have to say?

Nationals senator Barnaby Joyce wanted to know what would happen if the government was prevented from lifting its gross debt ceiling by a further $50 billion to $250 billion, as proposed in the budget.

“I couldn’t imagine that parliament would be so foolish,” Parkinson replied.

It would have “serious ramifications” for the operation of government.

It gets worse.

According to Mini-me Parkinson, he is simply not concerned about our ever-rising, all-time record high national debt. And, it seems he would only begin to view our national finances from a position of “concern”, if our national debt level was the highest in the world:

During a budget estimates hearing, Nationals Senate Leader Barnaby Joyce asked the Treasury secretary if increasing government debt concerns him.

But Dr Martin Parkinson says it does not.

“If you were to say to me that Australia had the highest level of public debt in the world… if you were to say that to me, then I would start from a position of much greater concern,” he said.

Brilliant.

Our nation is held hostage to the “genius” of yet another ivory-towered, disconnected-from-reality,”theory”-obsessed, white-collared, smarmy idiot.

A #JAFA.

This former head of the Department of Climate Change, no less, is now the new “Sir Frank Gordon” responsible for advising the Goose, Wayne Swan, about how to (mis)use the billions of dollars that this Government is borrowing every week from China, et al:

Given the abundantly clear evidence that America is rapidly swirling its way down the financial toilet bowl, the last thing we need is a Mini-me of Timmy, and a former student of money-printing madman, “Helicopter Ben”.

Another useless #JAFA – just like Senator Joyce’s previous nemesis at the Treasury department, the green cargo-cult member, Ken Henry – one whose towering, commonsenseless intellect insists that the government be permitted to keep borrowing-and-spending our nation into oblivion too.

Martin Mini-me Parkinson.

Remember the name.

So you know who (else) to blame, when we all get flushed down the green-tinted economic toilet bowl.

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