Tag Archives: martin parkinson

Barnaby: Labor Downplays Debt Like It’s Only A Little Melanoma

18 Nov

Good for his word. That’s Senator Joyce.

He pledged to never relent in reminding Australians that “if you do not manage debt, debt manages you” (Feb 2010).

Check out his latest and greatest attack on Labor’s melanoma-like growth in debt, in the Canberra Times (my emphasis added):

Forever in debt and Labor still ignores cost cuts

The Labor Party did something remarkable last week: it actually paid back some money after borrowing $11billion over the six weeks before. Our gross debt is now at $215billion. Unfortunately, Labor will probably borrow more again this week.

Recent statements by Penny Wong about cost-cutting and by the secretary of the Treasury, Dr Martin Parkinson, seem to accord with my fears of two years ago that we were taking on too much debt.

On October 21 , 2009, Australia’s gross debt accelerated through $100billion. This was before my unfortunately spectacular and brief tenure as Australia’s shadow finance minister. I was deeply concerned about the trajectory of our debt but it was very hard to find somebody else in government or the fourth estate that held similar concerns.

I remember the date well as I put out a media release at the time which concluded, ‘‘There are lots of ways you can try to pay debt but closing your eyes tightly and crossing your fingers has proven lately to be completely ineffective.’’

Leading the caravan of opprobrium against me was Treasury, acting as an arm of government. Repeatedly, it said Australia had no problems. It avoided that it was not the size that was the concern, it was the rate of growth, a very small active melanoma. We fell into trap of saying we are in a better position than others because our melanoma is tiny compared with theirs.

In a speech last week, Parkinson said ‘‘efforts to reduce government net debt should be the immediate focus’’. I’ll give him a tip, it would have been easier to control back in 2009. It has taken a couple of years, but now Parkinson and I appear to be on the same page.

You can see Australia’s gross debt grow almost every week, like a Chia Pet, by visiting the front page of the Australian Office of Financial Management website. I imagine it is there because the people we borrow from want a fully transparent view of exactly how much we have borrowed. If you start hiding it they get very, very suspicious.

Everything is moving into unfortunate focus as we approach at a rapid rate our third debt ceiling under this Government’s watch, and Europe and America come to the realisation that the problem is debt.

To understand debt ceilings you must understand gross debt. On March 10, 2009, Treasurer Wayne Swan increased our debt limit from $75billion to a ‘‘temporary’’ level of $200billion. According to Swan, we needed this increase because China and India were going to ‘‘slow markedly’’ and the mining boom was ‘‘unwinding’’.

The mining boom didn’t, but we not only hit our new debt ceiling but it is now at $215 billion, or over $17,000 for every Australian taxpayer. Our next ceiling is at a quarter of a trillion dollars. This debt does not include state government debt (heading towards $250billion), the debt of fully owned government entities, such as the National Broadband Network, or the debt of local governments.

To make a budget based on blue, sunny days is not only fraught with danger, it is naive. It is the old adage of keeping money aside for a rainy day. School halls and ceiling insulation are not the only reasons we now have so much debt, it is generally just poor day-to-day cost management. Labor talks of budget cuts now but why did they ignore people such as Productivity Commission chairman Gary Banks and former Reserve Bank board member Dr Warwick McKibbin, who both said Labor should have been cutting spending two years ago?

Those with the purse strings either don’t have the strength, or don’t have the competency, to remain within our means. Labor’s cabinet is lacking the real business experience where what you bill or sell is what you earn, and the cheques you write over the long term better be less than that.

What happened to the $11billion that Labor borrowed in six weeks? Are there new aircraft carriers in Sydney Harbour with the Australian ensign fluttering? Is there a big new freeway somewhere that I am not aware of? Are there big new dams in Northern Australia delivering water to vast new agricultural areas to feed the world?

If you were to go searching for this money, the place I would humbly suggest you start looking is Canberra. Not the people of Gungahlin, but generally to the ministers who are in charge of departments that are just not controlling costs.

Barnaby is right:

Commonwealth Government Securities Outstanding | Source: Australian Office of Financial Management (AOFM)

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Keating Was Right – US Treasury Secretary A “Gigantic Fool”

6 Aug

US Treasury Secretary Tim Geithner, in April 2011:

Interviewer (1st question): Is there a risk that the United States could lose its AAA credit rating? Yes or no?

Geithner: No risk of that.

Interviewer: No risk?

Geithner: No risk.

This is the chap who our own Paul Keating aptly described as a “gigantic fool” over his bungling of the Asian Crisis in the late 90’s in his then role as Treasury line officer at the genocidal bankster racketeers, the International Monetary Fund.

The same IMF that our Wayne likes to selectively quote … but only when what they say fits with his latest line of BS.

‘Nuff said about the competence of Geithner.

Who is our Treasury secretary, dear reader?

Be afraid.

Be very afraid.

Learn all about our new Treasury secretary, Martin Parkinson, here –

Our New Treasury Secretary Is America’s Mini-Me

By the way.

Keating’s no dummy.

Read what he predicted back in March 2010.

He was absolutely bang on the money –

Global Turmoil Looms: Keating

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Why Would Any Sane Person Believe Treasury’s Carbon Tax Modelling When Its Budget Forecasting Record Is This Bad?

12 Jul

Adoration of the Golden Calf - Nicolas Poussin, 1629

The Treasury department is – like many false idols – placed up on a pedestal and revered as some kind of infallible authority.

An economic god.

And when it comes to our Green-Labor-Independent minority dictatorship’s newly finalised “carbon pricing mechanism”, the infinite wisdom of the Treasury department will once again be held up as the final Word.

We are talking, of course, about a government department long headed by well known green cargo cult members. True believers in the warmist cult, such as former Treasury secretary Ken Henry. And the latest appointee from among the green faithful, Martin “Mini-me” Parkinson. Previously the head of the government’s new Climate Change department.

So today, I’d like to indulge in a little “Moses” reenactment.

You know … the old Bible story.

The one where Moses smashed in pieces the golden calf that the people had taken to worshipping.

The Treasury department is our modern equivalent.  It has become a sacred cow.

I think it is high time we ritually slaughtered this sacred cow.  In much the same way as our minority dictatorship has slaughtered Aussie farmers’ cattle export industry.

It seems that we are all expected to (once again) bow and scrape to the Treasury sacred cow, when our dictators tell us that the economic modelling for their new “carbon pricing mechanism” all stacks up.

Yes indeed, we are all expected to accept in blind faith, that the Treasury department’s forecasts and predictions of the financial effects of this great new economic reform bankers’ money-go-round, are solid and sound.

Hmmmm.

Perhaps if Treasury’s forecasts and predictions as prophesied in past budgets can be shown as having been accurate, then we might have some basis, some reason, for placing our faith in them regarding this new carbon dioxide mega-scheme … right?

Well, let’s take a look at them, shall we.

And let’s keep it really simple.

Let’s not slice and dice every line item in their past Budget forecasts. Let’s just see how accurate they were with the two (2) basic, headline Totals.

1. Revenue (ie, income), and

2. Expenses.

Let’s look at the original Budget forecasts that our Treasury gods made in 2007-’08.  And especially, let’s note their “forward estimates” made back then, for the following 3 years.

After all, the Government’s “carbon pricing mechanism” plan has an initial 3 year “fixed price period”.

So, if we can see that Treasury got their Budget forecast reasonably accurate for the three years from 2007-’08, then maybe … just maybe … we can have a little confidence in their abilities, and their forecasting accuracy.

Note too, that the 2007-’08 Budget forecasts – prepared by the Ken Henry-led Treasury department – were for the Howard-Costello Government. So we are talking here, about the Treasury sacred cow’s forecasting effort for the so-called “World’s Greatest Treasurer” Peter Costello’s final budget.

Let’s get into it, shall we?

Here’s the original 2007-’08 Budget document, showing “estimates” and “projections” for Revenue:

2007-'08 Budget Paper No. 1, Statement No. 5

Ok.

So, in the May 2007-’08 Budget, Treasury “estimated” Revenue of $246.8 billion for the year 2007-’08.

And they “projected” Revenue of $260.7 billion for the year 2008-’09, and $274.6 billion for 2009-’10.

(Unfortunately, we cannot compare the forecast versus actual Revenue and Expenses for the 4th year (2010-11) of the 2007-’08 forward estimates, because the Final Budget Outcome for that year will not be released until September 2011.)

How well did our Treasury gods do on those “estimates” and “projections” for Revenue?

Let’s take a look.

Here’s the Treasury’s Final Budget Outcome for Revenue in 2007-’08:

2007-'08 Final Budget Outcome - Revenue - Part 1, Table 2

Hmmm. $303.7 billion in actual Revenue, versus the $246.8 billion they “estimated” just 1 year earlier.

An error factor of 23%.

Here’s the Treasury’s Final Budget Outcome for Revenue in 2008-’09:

2008-'09 Final Budget Outcome - Revenue - Part 1, Table 1

Hmmm. $298.9 billion in actual Revenue, versus the $260.7 billion they “projected” just 2 years earlier.

An error factor of 14.6%.

And finally (for Revenue), here’s the Treasury’s Final Budget Outcome for Revenue in 2009-’10:

2009-'10 Final Budget Outcome - Revenue - Part 1, Table 1

Hmmm. $292.8 billion in actual Revenue, versus the $274.6 billion they “projected” just 3 years earlier.

An error factor of 6.6%.

Summary – Revenue.

Treasury’s 2007-’08 Budget “estimates” and “projections” for Revenue in the following 3 years, were wrong by a factor of +23%, +14.6%, and +6.6% respectively.

Or to put it another way, in the 2007-’08 Budget the Ken Henry-led Treasury department underestimated future government revenue by a grand total of $113.3 billion over the first 3 years of their “forward estimates”.

Incredible. They actually received $113.3 billion more than they originally forecast through to EoFY 2010. And yet, these Treasury gods and their Rudd-Gillard-Goose muppets have still managed to plunge Australia into $194 billion in gross debt by mid-2011.

That probably has something to do with their out-of-control spending, right?

Indeed.

Let’s move on to Expenses.

Here’s the original 2007-’08 Budget document, showing “estimated” and “projected” Expenses:

2007-'08 - Budget Paper No. 1, Statement No. 6

Ok.

So, in the May 2007-’08 Budget, Treasury “estimated” Total Expenses of $235.6 billion for the year 2007-’08.

And they “projected” Total Expenses of $247.5 billion for the year 2008-’09, and $259.7 billion for 2009-’10.

How well did our Treasury gods do on those “estimates” and “projections” for Expenses?

Let’s take a look.

Here’s the Treasury’s Final Budget Outcome for Expenses in 2007-’08:

2007-'08 Final Budget Outcome - Expenses - Part 1, Table 3

Oops. $280.1 billion in actual Expenses, versus the $235.6 billion they “estimated” just 1 year earlier.

An error factor of 18.9%.

And don’t forget, ladies and gentlemen … the GFC had not even hit yet! That came 4 months later, in September 2008. Our new PM Kevin07 evidently got off to a treasury-emptying head start, even without a GFC as the excuse.

Here’s the Treasury’s Final Budget Outcome for 2008-’09. This is the year that included the GFC panic, from September ’08 through early 2009:

2008-'09 Final Budget Outcome - Expenses - Part 1, Table 1

Oops. $324.6 billion in actual Expenses, versus the $247.5 billion they “projected” just 2 years earlier.

An error factor of … gulp … 31.1%.

And finally (for Expenses), here’s the Treasury’s Final Budget Outcome for Expenses in 2009-’10:

2009-'10 Final Budget Outcome - Expenses - Part 1, Table 1

Oops. $339.2 billion in actual Expenses, versus the $259.7 billion they “projected” just 3 years earlier.

An error factor of … gulp … 30.6%.

Summary – Expenses.

Treasury’s 2007-’08 Budget “estimates” and “projections” for Expenses in the following 3 years, were wrong by a factor of +18.9%, +31.1%, and +30.6% respectively.

Or to put it another way, in the 2007-’08 Budget the Ken Henry-led Treasury department underestimated future government expenses (ie, spending) by a grand total of $201.1 billion over the first 3 years of their “forward estimates”.

Incredible. These Treasury gods and their Rudd-Gillard-Goose muppets spent $201.1 billion more than they originally forecast through to EoFY 2010.

Here’s another way of looking at the Treasury department’s forecasting genius.

It’s a chart showing the Treasury’s 2007-’08 Budget forecast for Revenue over the following 3 years (blue line), versus the actual Revenue in the Final Budget Outcome for each of those years (green line):

And here’s another chart, showing the Treasury’s 2007-’08 Budget forecast for Expenses over the following 3 years (blue line), versus the actual Expenses in the Final Budget Outcome for each of those years (green line):

It’s interesting to note that Treasury underestimated both Revenue, and Expenses.

Convenient. Very convenient.

After all, most citizens will take more kindly to a government Budget that “forecasts” a total tax take … and total government spending … that are 20% – 30% less than they eventually turn out to be. And the odds of getting caught out are low – how many citizens (or journalists) ever bother to check how close the Treasury/Government’s final budget results came to their original “forward estimates”?

Now, there will doubtless be those who will cry out, “But wait! What about the GFC?! The Treasury forecasts were wrong because of the GFC!”

Indeed.

Our Treasury gods, with all their degrees and PhD’s … did … not … see … the … GFC … coming.

Think about that.

Why would any sane person believe in Treasury’s economic forecasting abilities now … after they totally failed to see that one coming?

After all, it’s not as though there is any shortage of dire warning signs out there right now, alerting us to an impending GFC 2.

A “bigger Armageddon”.

We have been documenting these warning signs coming from all over the world – and from here in Australia too – right here on this blog.

If the impact of the GFC is your excuse for the Treasury’s abject failure to get within a bull’s roar of predicting the Budget revenue and expenses for 3 years ahead of time … that they only got it so very, very wrong because they did not see that impact on the Budget coming … then I rest my case.

By your own words … and their own data … they stand condemned.

(And by the words of Macquarie Economic Research too. Click here to see what they had to say about the “truly extraordinary” Treasury modelling underpinning the recent May budget)

UPDATE:

A late thought that just occurred to me.

At precisely the time that Peter Costello was handing down the Treasury department’s 2007-’08 Budget “forward estimates” that we have just examined – in early May 2007 – your humble blogger was commanding his superannuation fund manager (contrary to strenuous “expert” financial advice) to put all his super into cash –

Why?

Because thanks to the clear evidences already coming out of America and elsewhere in the world, even I could see that a GFC was bearing down on us.

The overpaid, tea leaf reading numpties led by former Treasury secretary Ken Henry … could not see it.

UPDATE 2:

Feb 7, 2012

Reader and Twitter follower @Ayeshavit asked me to update this post to capture the Final Budget Outcome for 2010-11 … the last year of the 2007-08 “forward estimates” by the Treasury genii.

Recapping – way back in the (Coalition’s last) May 2007-’08 Budget, Treasury “estimated” Revenue of $287.3 billion for the year 2010-’11.

And they “projected” Expenses of $272.7 billion for the year 2010-’11.

Now, from the 2010-11 Final Budget Outcome, here’s what the Labor government actually achieved in 2011-’11:

Final Budget Outcome 2010-11, Part 1, Table 1

Oops.

$302.0 billion in actual Revenue, versus the $287.3 billion they “projected” just 4 years earlier. An error factor of 5.1%.

And ‘Payments’ (ie, Expenses)?

Double Oops.

$346.1 billion in actual Expenses, versus the $272.7 billion they “projected” just 4 years earlier. An error factor of 27%.

Yup. The Labor Government spent more than one-quarter more money in 2010-’11, than Treasury had “projected” in 2007-’08.

Isn’t it interesting how the Treasury department’s “forward estimates” actually turn out?

What a shame for all Australians, that the lamestream financial and economic commentariat never bother to go back and compare what Treasury originally said, versus the reality of what actually happens.

Instead, sheep-like, they lap up and bleat on to the public whatever nonsense “projections” the Treasury puts out on Budget night … as though it has actually happened.

When as you can see, the Treasury’s “forecasts” are not worth the paper they are printed on.

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The Pricing Carbon Choir – Why Should *Any* Sane Person Trust Economists After The GFC?

2 Jul

There’s a little faux furore doing the rounds in the last 24 hours.

Allegedly, that awful Tony Abbott doesn’t trust economists.

In particular, he does not trust their judgement over their “popular” position on the proposed carbon “X”.

From The Australian:

Opposition Leader Tony Abbott defies economists on carbon tax

Tony Abbott today slapped down economists who were backing a price on carbon to deal with climate change, accusing the numbers men of getting it wrong.

The Opposition Leader urged economists vocally calling for a carbon tax or emissions trading scheme to examine their thinking.

Speaking at the The Australian-Melbourne Institute Growth Challenge conference in Melbourne, Mr Abbott said economists should not be taken in by Labor’s use of the term “market-based mechanisms’’.

“It may well be, as you say, that most Australian economists think that the carbon tax or emissions trading scheme is the way to go,’’ he said.

“Maybe that’s a comment on the quality of our economists.’’

Indeed.

Consider.

Not one of these economists who are calling for a carbon “X”, saw the GFC coming.

Not one.

Australians lost billions from their retirement savings.

Our country was plunged, unprepared, into a massive Labor and greenie-Ken Henry-inspired monster debt-a-thon.

Why?

Because NOT ONE of these #JAFA’s saw the GFC coming.

Including the latest #JAFA economist to be given charge over the Australian economy – and your future – the new Treasury Secretary, former student of “Helicopter Ben” Bernanke, Martin Mini-me Parkinson.

Only one (1) Australian economist did see it coming.

Dr Steve Keen –

And only twelve other economists, worldwide, along with him.

Proof?

Here’s a paper referencing the thirteen international economists who all predicted and forewarned of the GFC for years in advance, and propounded cogent analyses as to why a GFC was coming. Including Australia’s own Dr Steve Keen, who won an award voted on by his international economic peers for having done so:

This paper presents evidence that accounting (or flow-of-fund) macroeconomic models helped anticipate the credit crisis and economic recession. Equilibrium models ubiquitous in mainstream policy and research did not.

Note that well.

It was only those rare economists who shun the kind of modelling that is “ubiquitous in mainstream policy”, and instead use “accounting” models, that got it right.

In other words, it was only the few economists worldwide who think like accountants, who were able to see the GFC coming.

Is it any wonder then, that our much-ridiculed accountant in the Parliament, Senator Barnaby Joyce, is always the only one on the ball when it comes to correctly predicting the risks of what is coming?

REMEMBER back in 2009 when Barnaby Joyce pondered aloud the possibility of the US defaulting on its debt?

Just to recap in the concisest way, things went badly for Joyce. We found ourselves pondering this yesterday as we listened to the dulcet tones of the ABC’s Eleanor Hall on The World Today: “. . . the [US] Treasury has warned that Congress has only until August 2 to come up with a compromise to lift the $US14 trillion debt ceiling or risk a default and a default would have drastic consequences, not just for the US but for the global economy”.

Is the time approaching where Joyce must be acknowledged as a clear-eyed prophet?

Strewth found him in a reflective mood.

“Maybe they will retract their pillaging of me and hand back the shadow finance portfolio as the sun is blotted out with the return of the migrating pigs,” Joyce mused.

“Alas, Cassandras are rarely enjoyable company in any party. It was hardly the greatest feat of the prefrontal cortex amygdala [utilised for intuition, he explains] to foresee that one, but politically it had to wait for the economic karaoke to bravely sing all together prompted by the big bouncing cheque.”

Amen.

But wait, dear reader.

There’s another outstanding reason why no sane person should trust the “leading” “mainstream” economists’ opinions about “pricing carbon”.

The majority of these economists you are hearing from on the subject, have a massive conflict-of-interest.

They are owned.

By banks.

Take a look at this little online stoush that I had right here on barnabyisright.com, with “leading” #JAFA economist Saul Eslake.

He objected to my portrayal of his and his fellow dozen economists’ Open Letter in support of “pricing carbon”, as being a Banksters’ Glee Club.

Then under return fire, he foolishly conceded that, as far as he knows, 77% of those economists (including himself) are current and/or former employees of banks.

Mr Eslake himself being former chief economist of the ANZ Bank, and now employed by BHP Billiton (who stand to make a killing from “pricing carbon” – really!), and the Australian Government via the “independent” Grattan Institute.

Quelle surprise!

By Saul’s Own Words They Stand Condemned.

The sector of the economy that stands to benefit the most from “pricing carbon”, is the financial sector.

Banks.

And banksters.

And their many minions.

Including Malcolm Turnbull, whose balls are owned by international carbon-trading-pushers Goldman Sachs, after their “confidential settlement” to keep him out of court in the half a billion dollar lawsuit over the HIH collapse, in which Mr Turnbull was a named defendant.

Tony Abbott – who has an economics degree himself – is actually demonstrating both brains and balls, by defying the “mainstream wisdom” of economists over the carbon “X”.

No sane person should trust economists at all after the GFC.

And especially, no sane person should ever trust those “leading” mainstream economists who are now out there publicly singing for their supper, on behalf of the bankstering industry.

The “Pricing Carbon” Choir.

Blithering Idiots, and Liars all.

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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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