Tag Archives: lindsay tanner

A Little Less Conversation

23 Mar

Media Release – Senator Barnaby Joyce, 23 March 2010

The Finance Minister, Lindsay Tanner, today expressed concern that Australia has too many of its export eggs “in one basket.” Senator Barnaby Joyce today responded by noting that this mock concern comes from the same government that continues to borrow $1.5 to $2 billion a fortnight.

“Export industries, other than the mining sector, are being “crowded out” by the government’s reckless and wasteful stimulus spending. This spending puts upward pressure on interest rates, making it harder for exporting firms to access finance. We have seen four interest rate rises in six months.” Senator Joyce said.

“But also when the government is borrowing at this pace, others have to go offshore. This increases our foreign debt and puts upward pressure on our exchange rate. Our exchange rate has increased 30 per cent over the last year. This hurts industries like the tourism sector. Unemployment is 12.4% in Far North Queensland at the moment, where the tourism hub of Cairns once generated a lot of jobs.”

“If Mr Tanner wants to encourage export diversification he needs to engage in less talk and more action.”

Mr Tanner tried to point to the government’s policies to invest in infrastructure and increase productivity as the ways it is helping export industries.

“This is a government that doesn’t do a business plan on a $43 billion broadband network. How does it even know that these investments will increase productivity? And, Mr Tanner is also the Minister for Deregulation, but the COAG Reform Council showed earlier this month that progress on four out of eight competition reforms is stalled. This includes national transport reforms, which are crucial if our export industries can get their products to ports cheaply and quickly.”

More information- Jenny Swan 0438 578402

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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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Labor Fakes GDP By 4.5%

17 Mar

*This post follows on from my recent article, “Labor: Hide The Increase”.  There, I showed that the Rudd Government has fiddled the books to hide their massive increase in borrowing and spending. Please read the article for background to this new article.

In the fine print on the Rudd Government’s Budget 2009-10 MYEFO website, we learned that Rudd Labor made a change in the accounting method that was previously used to calculate Gross Domestic Product (GDP).  This change resulted in a “substantial increase” to the official GDP figures:

* The 2008-09 Annual National Accounts show a substantial increase in the level of GDP over history due to the ABS adopting the new System of National Accounts 2008. Given the degree of increase in the level of nominal GDP, the Government has released updated tables of fiscal aggregates contained within Appendix D of the 2009-10 MYEFO.

So just how much is that “substantial increase”?

4.5%. Or $47bn. In just one year.

Here’s a chart I’ve put together from the official Australian Government Budget data. It shows my reverse calculation* of the value (in $millions) of Rudd Labor’s “revisions” to historic GDP.

That is, it shows just how much the Rudd government has simply tacked on to the previously-reported official GDP figures (click to enlarge):

Rudd Labor "revisions" to past GDP figures

This chart only goes up to 2006-07.  The last year of a Coalition government Budget report.

That is because the Rudd government has gone back and “revised” the figures in the Rudd Labor 2007-08 and 2008-09 Final Budget Outcome documents too.  So I could not find the original reported figures for those years in order to calculate the GDP, and compare to their newly “revised” figures.

Even so, you can easily see that Rudd Labor’s “revisions” to past GDP are indeed, a “substantial increase”.  For the 2006-07 year – the last year that I am able to compare original vs “revised” figures – it appears that they have adjusted GDP upwards by $47 billion (4.49%) over the original figures reported by the Howard Government.

Of course, we can easily perceive just why Rudd Labor would wish to do this….

Continue reading ‘Labor Fakes GDP By 4.5%’

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ECB: Stark Warning of Eurozone Debt Crisis

17 Mar

From BusinessWeek:

European Central Bank Executive Board member Juergen Stark said the euro region may face a sovereign debt crisis unless governments reduce budget deficits.

There is “a clear risk that we will enter a third wave,” which is “a sovereign debt crisis in most advanced economies,” Stark told lawmakers in the European Parliament in Brussels today.

In Australia, our government is continuing to increase our budget deficit, by refusing to withdraw its woefully incompetent and wasteful “stimulus” spending.

Even though we had no recession, and RBA Governor Glenn Stevens recently referred to 2008-09 as “the mildest downturn” we have had since WW2.

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China Warns of Double-Dip Recession

15 Mar

From The Australian today:

China’s Premier, Wen Jiabao, has warned that the world risks sliding back into recession and says his country faces a difficult year trying to maintain economic growth and spur development.

“The unemployment rate of the world’s main economy is still high, some countries’ debt crises are still deepening, and the world’s commodity prices and exchange rates are not stable, which are most likely to become the cause of any setback in the economic recovery,” Mr Wen said yesterday in Beijing’s Great Hall of the People.

China’s and Australia’s economies have become more intertwined in recent years: the country is now our largest trading partner with two-way trade surging to $83 billion in the year ending last June 30, and in December it passed Japan as our largest export market.

Any trouble in China’s economy would quickly resonate in Australia.

Perhaps Treasury Secretary Ken Henry might care to revise his recent declaration that the GFC is ‘over’?

Perhaps Henry, along with RBA Governor Glenn Stevens, and all their many mindless cheerleaders in the media, might pause to reconsider their claims that ‘the risk of serious contraction‘ has passed, and that Australia is now set to enjoy a multi-decade China-fueled mining boom?  One that will fix the massive Rudd hole in the Budget, and provide a “period of unprecedented prosperity” for Australia?

Please… inform yourself.  Understand what is really going on in the financial world. Unlike the lazy, short-sighted economic illiterates who are running this country.

Please browse through the posts on this blog, and follow the links that catch your eye.

You will find references and links to literally dozens of articles from around the world.  You will see that international economists, investors, financiers, world leaders, and many others, have been increasingly warning of the many threats to the global economy. And thus, to Australia’s economy too.

Our Australian economic “authorities” are living in La la land.

Only Barnaby is on the ball.

Rudd Labor, Ken Henry, RBA and friends

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Only Barnaby On the Ball

15 Mar

From the Sydney Morning Herald:

How could our leaders have made changes designed to “better target and strengthen the application of capital gains tax” without seeing they would later allow companies associated with the misleadingly-named Texas Pacific Group to make a billion or so dollars in profit from the sale of Myer capital-gains-tax-free because they were registered not in somewhere like Texas but in the tax havens of Luxembourg and the Cayman Islands?

Barnaby Joyce was one of the very few to point to the emperor’s clothes.

“It is quite clear that not only are we about to pass a piece of legislation that discriminates against Australians but we are doing it at the behest of other people in other corners of the globe,” he told the Senate. “This legislation is going to be sneaked through. Do you know that today we have overseas equity firms that in the United States have put in a bid for Home Depot of $100 billion? They have the ability to remove $100 billion from the share market and the Labor Party is quite happy for that investment to be tax free.”

Both parties were happy about it. They said other countries exempted foreign investors from Capital Gains Tax in the belief that they would pay it in their country of residence.

It seems not to have occurred to them that that country of residence could be somewhere like Luxembourg, without Capital Gains Tax.

It occurred to Barnaby.

“I will give you one place. It is not very far away and people might have heard of it: New Zealand. New Zealand has no capital gains tax, so you can launch from New Zealand, come into Australia, buy up Coles, hold it for a year, sell Coles, put your money in your pocket, take it back to New Zealand and not pay one cent of tax – and that is something you are agreeing to today.”

Barnaby Joyce is the subject of near-universal derision and smearing by Rudd Labor and the mainstream media when it comes to so-called “economic credibility”.

Yet, he is far better qualified than the entire Labor economic team. And he has shown time and again, that he may be the only Australian politician with any basic, practical commonsense.  He is always right on the economic ball.

Quite unlike economic illiterates such as Finance Minister Lindsay Tanner, who does not even bother to keep track of Australia’s public debt position – he recently got it wrong by $6bn in an interview – and claimed that he did not have time to “dot i’s and cross t’s” in the disastrous home insulation debacle.

Barnaby is right.

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Labor’s Debt Legacy

12 Mar

Media Release – Senator Barnaby Joyce, 12 March 2010

Senator Barnaby Joyce says that reports in The Australian today confirm what the Coalition has been saying for months on debt and interest rates. Simply put, the Rudd Government’s excessive and profligate spending is putting upward pressure on interest rates.

It is clear that the RBA have resorted to the fastest increases in interest rates among advanced economies in response to the effects of this spending. So while other countries enjoy modest rises, hard working Australians will be paying the price for Labor’s bad management.

There is still a major portion of the $42 billion Nation Building and Jobs Plan to spend and while the Government has almost $128 billion of debt on issue (almost $16,000 per household), this is less than half its projected peak of $270 billion in 2014-15.

Gross debt has risen from $126.183 billion two weeks ago to $127.982 billion today. In two weeks the debt has risen by $1.8 billion. Easy to throw these figures about, but remember, just this increase is enough to seal 9000 kilometres of 6 metre wide road in country Queensland. This would take us from Sydney to Perth and back again and still have money left over.

It is highly unlikely there will be many left of the current Labor members by the time this debt is repaid. In fact quite a few will have passed away, but the debt will still be with us.

More Information- Jenny Swan 0746 251500

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Tanner Lies About Budget, GFC

11 Mar

Finance Minister Lindsay Tanner has demonstrated yet again that he is a liar and a fraud:

Lindsay Tanner today accused the Opposition of punching a $2 billion hole in the budget after it helped defeat a means test on the private health insurance rebate last night.

“Tony Abbott and the Liberal Party are blocking almost all the government’s major initiatives in the Senate these days,” Mr Tanner told ABC radio.

“We faced a huge budget problem as a result of the global financial crisis. We have to repair the damage to the budget and we have to get the budget back into surplus as quickly as possible.”

“Yet he’s punched a huge hole in our savings initiatives that are designed to get the budget back into surplus quickly.”

In a recent column for the Sydney Morning Herald, ironically and hypocritically titled “Dishonesty in the debt debate”, Lindsay Tanner wrote:

Why are we going into debt?  Because the global financial crisis punched a huge hole in our projected revenues, and forced us to act to support the economy and to sustain jobs.  Had we just sat back and watched, as our opponents seem to suggest, we would have seen unemployment rise dramatically.  That would have reduced tax revenues even further, and thus pushed us into deficit anyway… The Rudd government had no choice but to intervene to protect Australian working people from the ravages of the crisis.  The dishonest campaign about debt being prosecuted by our opponents should be seen for the fraud it is.

Tanner’s claim that the GFC “punched a huge hole” in the government’s projected revenues, is an outright lie. And I will prove it to you, from the government’s own Budget documents.

The real reason that Rudd Labor faces a “huge budget problem” is not a result of the global financial crisis. Instead, it is entirely a result of their panicked, monumentally incompetent response to the idea of a GFC.

The simple fact is this: Contrary to Tanner’s recent claim, and Labor’s shrill proclamations throughout 2009, the GFC barely affected Australian government revenues at all. The “huge budget problem” is entirely of the Rudd Government’s own making. Because their team of uneducated economic illiterates panicked, and went on a massive, unnecessary spending binge. And now they are lying to cover up that fact.

Want proof?

Take a look at the Government’s 2009-10 Budget, Statement 10, released in May 2009.  It shows that Government income (“Receipts”) was estimated to be down by just $7.8bn (2.7%) on the previous year –

Continue reading ‘Tanner Lies About Budget, GFC’

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$127.68 Billion and Rising

6 Mar

From the Australian Office of Financial Management:

Total Commonwealth Government Securities on Issue – $127,682m

*As at 5 March 2010
Updated weekly
Face value amounts rounded to the nearest million

How much further into debt will Rudd Labor take us next week?

Forthcoming AOFM Tenders

Treasury Bonds
On Wednesday, 10 March 2010 a tender for the issue of $700 million of the June 2014 Bond line is planned to be held.

Treasury Notes
A tender for the issue of $600 million of Treasury Notes maturing on 11 June 2010 and $300 million of Treasury Notes maturing on 23 July 2010 is planned to be held on Thursday, 11 March 2010.

That’s right. Another $1.6 Billion in debt, next week alone.

These are the debt numbers that Finance Minister Lindsay Tanner does not trouble himself to know.

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