Just recently I had a go at George Megalogenis for being a labor luvvie.
Simon
Thu 05 Mar 09 (02:54pm)
“Jesus George Don’t you ever get sick of apologising for the Rudd Government. Or are you lining up a safe seat? How about a piece on the reduction of debt, and Rudd’s capacity to pay it all off, after the recession. Maybe you could do some research circa post Keating.”
Much to Georges credit he has posted an article to attempt to explain the debt position, but I don't think he got my point.
Now, I really like Georges writings and have a great respect for his opinion, so don't read animosity in this reply. I'm just simply frustrated that the MSM are not being focused on the impacts that are looming on our horizon.
My Reply to Georges article below (as posted on his blog);
Hey George,
Thanks for the post. Sorry I couldn't reply until today, I was on the road.
If you would indulge me, I don't believe you've addressed my question, my question was "How will the Labor Party repay the debt?". Not how did it occur and who was to blame. We know that already.
The reason I asked this is because it forces some examination of ALP decisions and Policies. Follys that have just been made, or looming like imminent festering sores on the Australian economy. I can guess at the effects of these monsters but I would rather hear your thoughts;
1. The ETS, leaving the AGW theology aside, as far as I can see this is just another Taxation method for the Government. But a Tax system that targets Energy, Energy up = Production Costs up = Prices up = less consumption = less revenue = less growth = less jobs. Or like any sensible Corporate, you take your Production to the place that is of least cost (away from Australia). There is a Hit to our GDP and capacity to pay off debt.
2. Fair work. Unions and the ALP as the watchdogs of the workplaces. Never worked before, wont work now. Hard to measure the impact, but the smart businesses wont be placing any workforce into such an environment. There is a Hit to our GDP and capacity to pay off debt.
3. ALP States borrowings guarantee. Well kiss our National AAA rating good bye. Queensland unrepentantly lost theirs, NSW is under close watch, and SA have indicated they wont protect theirs. Yeah, lets give them a blank cheque!! Lets just assume, for the sake of the argument, that we loose our AAA rating. Our interest rates rocket on a huge pile of debt. What percent do you think our very reduced budget in may 2010-11 will be swallowed by debt repayment? Have a stab.
4. Bank Guarantees - your colleague, David Uren, nearly gave me a heart attack when he exposed Australia's current debt exposure;
http://blogs.theaustralian.news.com.au/currentaccount/index.php/theaustralian/comments/counting_the_cost_of_a_guarantee/
The banks are lending cash, that if defaulted in such a way that would impact on the savings invested in that bank, the government becomes liable for that default (because it guarantees the savings) and at the moment there is a potential $102.2 Billion in debt that could go wrong. Of course this is just so much worse now we guarantee states borrowing.
5. Selling the farm to China. Hopefully I'm wrong on this, but I think the Chinalco deal will proceed (ACCC gave its green light). Now call me simple but if we "give" our mineral wealth to China, how do we make a recovery on the back of mineral exports. Do we really think a Chinese Government owned company will act with our best interests at heart?? Nope we will see prices moved to suit the Chinese. Go to Barnaby Joyce's website to learn more. Sign the Petition.
6. Our own Sub-prime housing crisis is looming. I don't think Australia is yet suffering the unemployment levels it will reach. Many, many, young people will loose jobs as business contracts, stimulus's run out, and this government has been running a first home buyers scheme to place these people in a disgustingly vulnerable situation. With calls to continue it. I know you mentioned household debt as a key factor... So why not mention the scheme that saddles a young couple with a grossly over-inflated asset. I didn't like the scheme under the good times of Howard... It is sheer madness today.
There you have just six factors that will massively impact on the fiscal position of Australia, we know there are more, get a focus on them, give us some insight on the impact of these things and how should be handled, what risks are we facing due to them, and in this instance how will they impact on our capability to retire debt.
But mostly old bean, your article outlines the real problem. No Australian mainstream journos are speaking out over the idiotic policies of Saint Kevin and the catastrophic impact they will have on our very vulnerable situation. I haven't watched insiders yet (I'll check it on-line later today), but so long as its only the bloke in the far right chair that has a go at Rudd and Co's policies, while everyone else makes excuses for the position our country lands in, we are doing our kids a disservice
As usual I will probably get very cranky. :-P
Forget analyzing how we got the $200 billion+ Debt burden, sadly its a done deal, and this nonsense of Howard / Rudd blames is crap too...
Start focusing on how this, and any other government, will retire the debt for our kids. And for gods sake, get stuck in if they don't even try.