Saturday, August 03, 2013

Is the 206 billion deficit the core issue in our Australian elections?

My politics are "agnostic" - I think the political system and policies of Labor and Liberal are both good.... however I am not cool with lies and deceit!

The Australian's article this morning ht a chord with me


"THE era of Kevin, interrupted by the Julia interlude, has been a roller-coaster ride. Having promised fiscal conservatism, the excuse of the global financial crisis unleashed a period of rapid growth in government spending, successive budget deficits and mounting public debt under Kevin Rudd's guidance.

Now, with Rudd's return, Labor has launched a charm offensive that seeks to whitewash the past: it is as if aliens from Mars, fortunately departed, had been in charge. But the damage of that era cannot be wiped out so easily.
Will the electorate forget Rudd's past as he seems to have done?"

... so here it goes!!

Before Australia can continue to go forward economically, we need to identify what the problem is before we can fix it...

What is that problem?

Is it Bad fiscal management?

"The Commonwealth's balance sheet has shifted from $44.8bn in net assets when Rudd took office to $161.6bn in net debt this year..... a $206b turnaround!

a shift from a budget cash surplus, averaging 0.9 per cent of gross domestic product during the Howard years to a cash deficit that exceeded 4 per cent of GDP in 2010. "

This in itself might not be a bad thing.....has the money been used for good purpose. It is interesting to provide a score of 1 - 10 on the following questions (KPI's)
  • Has that debt resulted in an increased asset base for our country, that will lead us to sustainable growth for the future?
  • Stave off the negative effects of a worldwide GFC
  • Are the people happier, better off, worse off?
  • Has our infrastructure improved?
  • Roads, trains, bridges, education, healthcare, security, leisure time, etc?
  • Sustained benefit for the community - such as healthcare, edcation , security
  • If they spent to facilitate commercial enterprise and SMEs
    • export, 
    • r and d, 
    • innovation,
    •  infrastructure, 
    • workplace education, 
    • leadership programmes, 
If the blowout was to support something that is beneficial for the shareholders (the people) that generates revenue and sustained benefit instead of trying to kill business, they would have lots of revenue and could spend what they have.
But they seem to  just keep going back for another piece of the beheaded Golden Goose and seem to spend it on unsustainable 

 Joe Hockey's comment  "We don't have a Revenue problem, we have a spending problem." should be finished by .... "on things that are not sustainable or beneficial to the public!"

The past decade from mining has resulted in a massive revenue windfall
Increase demand of resources to china and India and massive increase in the price of steele ($30 to $130 per tonne).
What are the things we can do to make this revenue sustainable?

What did we do with this revenue? 
Did we spend it on infrastructure that would increase productivity?
 Or
Did we blow it all on tax cuts and subsidies to inefficient private services, wasteful programmes (batts, school rorts) ,public bureaucracy (increased politician wages), badly managed programmes (blowout of NBN)

What if we took  the wasteful spending out of the picture... Imagine it was never spent...however, continue to support stimulus in a sustained way.....where do you figure the budget would have been today?
Surplus or Deficit

2. Is it Bad Leadership - 
The government needs to be responsible governors and leaders

Living within your means shouldnt just apply to consumers and business... It should apply to government!

Spending capital and debt is a good thing, which can create wealth for individuals, corporates and countries.
however
The debt has to be good debt!
Debt that is used for sustained growth and benefit for the future of the country.

But they just keep going back for another slice of the beheaded Golden Goose !!

It's ok to spend from capital or debt, as long as their is a reason or a plan that this spend will ensure growth and sustained surplus where more money will come in than go out!

Core values
If management
  • stuff up
  • lie
  • don't perform
they need to be held accountable and  fired..... I have never seen a CEO that has been fired for incompetency bad management and bad leadership be returned by the board!

It seems ok to the Electorate (the shareholders) for our leaders to lie and cheat and backstab.... Just because "that's what politicians do"

This is an inditement to ourselves, the people!!  The shareholders should call a meeting to replace the board  and the returned CEO!

HERE'S THE THING!!!

Shit happens, budgets blow out, business turns around, ventures fail.... That's OK, and can be rocks that seem to be in the way, that can act as stepping stones later on! (thanks Paul :))

But if the core values and ethos is where lies and deceit and mismanagement is OK, the end of prosperity is near .....

And that is what the real issue is!

The credibility of this government is questionable. They do not have the moral authority to remain in government, nor can we vote them in based on competent leadership and governance....

Whether it was a Liberal or a Labor government.... My comment above would be the same!

THE OPPORTUNITY
Australia has the opportunity to be the shining light to the world.
We have it all
Resources, Beauty, Peace, Multiculturism, Racial and Religious tolerance,, Good people, Free press, Great Climate, Good Education, Innovative People, Strong International Relationships and a strong Moral Compass

(Just remember Kevin, we were all immigrants, many of us refugees)

Let’s use these assets to build an awesome nation with a sustainable future for ourselves, our children and our future generations...,

Let’s leave our kids an amazing legacy....

We need great leadership based on core values of truth not lies!



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