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Thursday, 24 December

23:16

Support a GST increase? Think about the children first Prosper Australia

By Michael Janda Online business reporter with the ABC. Reposted from The Drum Increasing the GST is widely presented as the logical, perhaps the only, solution to Australia’s revenue shortfall, but it is a deeply flawed tax and there are better alternatives, writes Michael Janda. It is presented as a fait accompli that a GST […]

18:33

What do you do with a problem like Adani ? John Quiggin

Having jumped a number of legal hurdles, Adani is now seeking approvals from the Queensland state government, necessary for the Carmichael coalmine/rail/port project to proceed. This presents the government with a nasty dilemma.

On the one hand, refusing approval would be a PR disaster. Adani, and the government’s opponents, would blame obstructive regulation for the failure of the massive bonanza that has been promised. Adani continues to claim that project will give Queensland $22 billion in royalties and taxes, and up to 10 000 jobs, even though its own expert refuted these claims in court.

On the other hand, everyone (even the International Energy Agency, notably until recently for its stubborn faith in the coal of the future) knows that this project is uneconomic, and unlikely to proceed before 2020, if ever. And while the government has said it won’t subsidise the mine, it appears that it may be forced to spend some money on the Abbot Point upgrade.

So, |irony alert on| I have a simple suggestion to resolve the government’s problem. Just ask for a downpayment of, say, 5 per cent of the promised benefits ($1.1 billion). In the unlikely event that Adani pays up, this will be money for jam. If, as is virtually certain, the money isn’t forthcoming, the government can rightly claim to have protected the interests of the Queensland public.|irony alert off|

Taking the question more seriously, the government should seek evidence from Adani that the project has sufficient finance to proceed before issuing any approval. That will be enough to ensure an indefinite delay.

14:13

Ireland demonstrates that fiscal deficits promote growth Bill Mitchell – billy blog

On December 10, 2015, the Irish Central Statistics Office (CSO) released the – National Accounts, Quarter 3, 2015 – data, which showed that real GDP had increased by 1.4 per cent over the last quarter while real GNP had declined by 0.8 per cent. On an annual basis, real GDP increased by 6.8 per cent in the September-quarter 2015 and real GN increased by 3.2 per cent over the same period. I’ll discuss the difference between GDP in GNP later but is clear that Ireland is in terms of real economic growth leading the Eurozone at present. In narrow terms, it is also clear that over the last two years the nation has recorded consistent growth. A question that is often asked is whether Ireland defies those who claim that austerity is flawed strategy. I get various E-mails along those lines, some polite, some rude. My answer to the polite ones is that it is difficult to hold out Ireland as an example of austerity-led growth. Ireland is, in fact, a rather strange Eurozone Member State, and is more firmly plugged in to the Anglo world than other Eurozone nations. It just happens, that while the Irish government was suppressing domestic demand through austerity from as early as 2009, significant trading partners (such as, Britain, the US and China) were maintaining expansionary fiscal positions, which allowed Ireland to resume growth. Further, a narrow focus on the growth cycle misses significant aspects of national prosperity. Even with two years of economic growth, real earnings growth is flat to negative, the rate of enforced deprivation remains around 30 per cent, and there is a rising proportion of people at risk of poverty. On top of that, net emigration of skilled workers continues, which means that the official unemployment rate is much lower than it would have been if these workers had not left the country.

...

10:13

TPP take action AFTINET

The TPP text of thousands of pages was released on November 5, and it confirms our fears.See our initial assessment  hereThe TPP text will be reviewed by parliamentary committees from February 2016 before Parliament votes on the implementing legislation. AFTINET will be campaigning to block the implementing legislation in the Senate.  

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Wednesday, 23 December

18:39

Finland should exit the euro Bill Mitchell – billy blog

I think the progressive side of politics has a real problem when it is increasingly gazumped in policy insights by politicians and/or commentators from the populist, xenophobic, racist, homophobic, far right-wing. Whether Finland’s Foreign Minister Timo Soini is all of those things or just nationalistic and far right (one of the members of his Finns party wants homosexuals and some foreigners rounded up and sent to some remote Baltic Sea island), he is certainly correct when he told the press yesterday that “Finland should never have signed up to the single currency union” and “could have resorted to devaluations had it not been for its Euro membership” (Source). Earlier this month (December 4, 2015), Statistics Finland published the latest National Accounts data for the third-quarter 2015, which showed that real GDP declined by 0.5 per cent in that quarter and by 0.2 per cent over the previous 12 months. In the past 12 months, both exports and imports declined by 3.4 per cent, the former signalling declining markets and the latter declining domestic income – both bad. Investment spending fell by 3.9 per cent in the year to September, which will further undermine the nation’s potential growth. It is now becoming the basket case of advanced Europe.

After that rather sobering introduction to the basket case of advanced Europe, consider the following third-quarter real GDP results (Source):

In real terms, non-seasonally adjusted Gross Domestic Product (GDP) for the first three quarters of 2015 increased by 4.5% compared with the same period of 2014. Total domestic final ex...

18:10

Friendly Jordies versus Property Speculators Prosper Australia

Referencing our eighth Speculative Vacancies Report, Friendly Jordies breaks it down for the everyday person. When are politicians going to get more proactive on the incredible advantages property speculators enjoy? Resources: Zine – Shareholders of Planet Earth Roots Revolution (1985) Watch one of the top 100 films to change the world, Real Estate 4 Ransom […]

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Tuesday, 22 December

16:48

There was no reason for the US to raise interest rates Bill Mitchell – billy blog

Last week (December 16, 2015), the US Federal Reserve Bank raised its policy interest rate by 25 basis points (1/4 percentage point) for the first time since 2005. In its – Opening Statement – the Federal Reserve chairperson said that the decision reflected the Bank’s judgement that there had been “further improvement toward our objective of maximum employment” and that it “was recently confident that inflation would move back to its 2 per cent objective over the medium term”. They did, however, acknowledge that “some cyclical weakness likely remains” and referred to the significant drop in labour force participation, the rise in underemployment, and the almost non-existent wages growth. Taken together, it was a strange decision to take given that the labour market is still a long way from where it was pre-crisis (unemployment has been replaced by underemployment and non-participation) and that the price level inflation is well below their two per cent target (even taking into account the extraordinary drop in energy prices).

The last time the Federal Funds Target Rate was increased was in June 2006 when it was raised from 5 to 5.25 per cent. In September 2007, the Bank dropped the Rate to 4.75 per cent and then after nine successive cuts it was down to 1 per cent by November 2008.

The Federal Reserve Bank also released its – Economic Projections of Federal Reserve Board members – last week to accompany the decision, which show the “individual assessments of projected appropriate monetary policy” of the Federal Open Market Committee (FOMC).

This document provides a clue to where the FOMC members consider monetary policy is heading (that is, where the feder...

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Tuesday, 01 December

10:15

Competition watchdogs slam TPP AFTINET

November 30: Computerworld and Sydney Morning Herald reports that the Australian Competition and Consumer Commission (ACCC) has criticised monopoly intellectual property provisions in the Trans-Pacific Partnership and called for an independent review before signing, and has also criticised the TPP ISDS provisions which allow foreign corporations to sue governments over changes to domestic law. This follo...

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Wednesday, 11 November

12:05

TPP text:what it means for you AFTINET

The TPP text of 30 chapters and thousands of pages was released on November 5. Read AFTINET's short summary of its impacts on four key areas, and  a separate summary on investor rights.   See our video and  longer analysis on medicine prices national regulation of medicines, the  en...

Wednesday, 28 October

11:31

New study of Australian mining company suing El Salvador AFTINET

October 26, 2011: Read Prof Robin Broad's  study of the  Australian-Canadian OceanaGold mining company use of the ISDS World Bank tribunal to sue the El Salvador Government for $301 million when it refused a mining license because of potential pollution of its main water source.

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