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Thursday, 10 March


GST hike is a solution in search of a problem Peter Martin

Of all the daft analogies. Scott Morrison says fixing tax is like turning back boats.

"I have had a bit of experience with this," he told a Canberra press conference this week. "I remember before the 2013 election, turnbacks actually had lower levels of support in the Australian community. It's important that when you believe that something's right for the country, that you remain focused on that."

Here's what's different about tax. When you turn back boats, you know what you are trying to achieve. When you attempt to change the tax system, you are without a clear goal unless you set one first. A 15 per cent GST might well be the answer. But it's impossible to know without knowing the question.

The question was muddled from the start. Here's how Tony Abbott put it during the 2013 election campaign: "Well within three years, a tax white paper will have canvassed how we can have lower, simpler, fairer taxes for higher economic growth and better and more sustained services."

That's five points, a bit like the arrow-covered pointless man in the Harry Nilsson film who concedes that "a point in every direction is the same as no point at all".

No matter. Over time the objectives were to be sharpened in a discussion paper, then a green paper setting out options, and finally a white paper detailing the preferred option. We were to be given something to measure the final proposal against.

Except that the Abbott government fell apart. The treasury had the discussion paper ready to go at the start of December 2014. Abbott sat on it for four full months as he dealt with a s...


The neo-liberal class warfare on the poor and the rest of us Bill Mitchell – billy blog

I read a report just released yesterday (March 9, 2016) – The uneven impact of welfare reformby the Centre for Regional Economic and Social Research, which is located at the Sheffield Hallam University in Britain. It showed that the British Government is successfully prosecuting a class war against the disadvantaged and, increasingly, against segments of ‘middle’ Britain. It confirms the view I formed in 2010 when the Conservative government was elected and announced its first fiscal statement in June of that year that it was intent on pursuing some unfinished business – to wit, entrenching the attacks on workers and income support recipients and redistributing national income in favour of capital. These attacks were somewhat interrupted by the urgency to deal with the meltdown associated with the GFC. Leopards don’t change their spots and the Conservatives are intent on finishing off the agenda that began back in the 1970s with the attacks on unions and public services. I was thinking about the report as I was reflecting on a radio program I heard the other day about how the Australian National Library is being forced to make severe cuts to its archival services among other things in response to federal government austerity plans. Mindless is the first word that came into my head when I was listening to the program. In the case of Britain, the attacks are being dressed up as ‘welfare reform’. In the case of Australia, the spending cuts are being dressed up as ‘efficiency dividends’. The neo-liberal nomenclature is an attempt to obscure what is really going on – a massive attack on society, its disadvantaged, and its cultural institutions. Neo-liberals hate society and anything that provides inclusive access to all in the benefits that society can deliver....


Turnbull's wrong, the future isn't what it used to be Peter Martin

What would you rather do without: the internet, or airconditioning?

Here's another one. What would you rather give up: smartphones, or plumbing?

They're questions that go to the heart of the myth at the centre of Malcolm Turnbull's Australia Day speech – that we live in "the most exciting time in human history".

According to our technologically-savvy Prime Minister "there has never been such rapid change".

Really? Try telling that to your great-grandparents.

In the late 1800s families bathed in tubs in the kitchen, often the only heated room in the house, after carrying in buckets of cold water and heating it by an open fire. They washed once a week if they were lucky, and in some cases once a month. Yet within decades, by 1940, they had running water and heating in every room. So says US economist Robert J. Gordon in an impressive, and somewhat depressing, new tome entitled The Rise and Fall of American Growth.

Gordon says not a single urban home was wired for electricity in 1880, but by 1940 nearly 100 per cent had mains power. By 1940 94 per cent had clean piped water, 80 per cent had flush toilets, 73 percent had gas for cooking and 56 per cent had refrigerators.

Houses went from being isolated to being networked, "most having the five connections of electricity, gas, telephone, water, and sewer".

Compare that to the changes we are living through now, the ones spruiked by our Prime Minister.

Gordon says until 1970 progress was...


Why state governments are about to hike taxes Peter Martin

Victoria, NSW, and every other Australian state have been mugged.

Here's how it happened. The Coalition came to office in 2013 promising to continue to properly fund state hospitals and schools. It left the impression the commitment had no expiry date. Then in its first budget it abandoned funding some state programs (encouraging the states to continue them "at their expense") and announced that from 2017-18 it would lift hospital and school funding only in line with population growth and inflation.

Think about that. Population growth is 1.7 per cent in Victoria and 1.4 per cent in NSW. Inflation is 1.7 per cent. Combined, they are about 3 per cent. But the costs of running hospitals are soaring. In the past decade they've jumped 7.2 per cent a year.

What are the states supposed to do? Not pay those costs? Limit spending growth to population plus inflation, even though the cost of wages and medical technology is growing much faster? Or are they supposed to find more money.

In the days immediately following the budget, then treasurer Joe Hockey seemed to have an answer, or at least a wink and a nod. Asked whether the states should raise more tax, he replied: "Well, that is a matter for them because they do run the schools and hospitals."

He had made his budget better by making theirs worse, and...


Negative Gearing. It's turning us into landlords and serfs Peter Martin

Once we talked about the great Australian dream. Now it's something meaner: "getting ahead".

The great Australian dream meant owning your own home. "Getting ahead" means getting ahead of someone else. It's how Treasurer Scott Morrison sees the Australian dream.

"I think it is great in this country that people want to aspire to do better and provide for their kids, so I don't judge people for actually wanting to get ahead," the treasurer told radio host Neil Mitchell a few weeks back. "That's what this country is about."

It's certainly what negative gearing is about. "The vast bulk of Australians who use negative gearing are just trying to get ahead and trying to get their family in a better position," Morrison says. But negative gearing only gets them ahead if prices climb. The more that people negatively gear in order to get ahead, the more prices climb. The further they climb, the harder houses become to buy. And the harder they become to buy, the more the Australian dream recedes.

This is what has happened. Back before the explosion of negative gearing around the turn of the century, 52 per cent of Australians aged in their mid-20s to mid-30s actually owned their home. At the most recent census in 2011 it was 47 per cent. Before the turn of the century, 70 per cent of Australians aged in their mid-30s to mid-40s owned their own home. It's now 64 per cent.

The negative gearing-driven explosion has made it harder for Australians to buy houses to live in. Here's how Luci Ellis, head of the Reserve Bank's financial stability department, puts it: "It's a truism that...


Knitting Nannas are now in Tamworth! Sustainable Living Armidale

[ Friday, 11 Mar; 9:30 am to 11:30 am. ] With great success we held our first Tamworth Knit-in on Friday March 4th. We are doing it again tomorrow and we'd love to see you there. We have a meeting with Mayor Col Murray in early April to voice our concerns. Are those opposed to more mining in New England North West really the vocal minority? Please [...] full article »


Member registration closes this Friday — 5 reasons not to miss next week’s Climate Assembly Sustainable Living Armidale

[ Thursday, 17 Mar to Friday, 18 Mar. ] Sustainable Living Armidale is a member of Climate Action Network Australia, so if you are a paid member of SLA you can attend this. Member registration closes this Friday 11 March, so get in quick if you've not yet registered. Here's 5 reasons you'll not want to miss the event: 1. Inspiring & entertaining session on collective action: when and [...] full article »


Please sign — Get Polluters out of Politics Sustainable Living Armidale

Dear Friends – I’m Robin Gunning from Tamworth and I’m the coordinator of our Pollution Free Politics campaign in New England. I’m a climate campaigner. New England is a big electorate and our MP Barnaby Joyce is one of the worst climate deniers in Parliament so, we have a big job to hold him accountable. Can you help spread [...] full article »


German retail power rate stable as share of renewables increases Renew Economy

Over the past four years, the share of renewable power grew by nearly a third, so why did retail rates remain stable from 2013-2016?


What we’re reading: Windsor targets Barnaby on renewables and climate Renew Economy

Tony Windsor targets Barnaby Joyce on renewables, climate; Obama and Trudeau prepare climate pact; Trump or fossil-fuelled Cruz?


If planners know it’s cool to green cities, what’s stopping them? Renew Economy

It seems like a “no brainer” to green cities, but international research shows planners are not always comfortable with the idea.


E.ON and RWE report losses in fossil power generation as they turn to renewables Renew Economy

E.ON is expecting that future profit, dividends and cash flows will continue to decline further due to the worsening conditions of the power sector.


South Australia’s energy price hikes: Blame inflated bills, not renewables Renew Economy

Mainstream media is focusing on soaring energy bills for South Australia businesses, blaming wind and solar. Maybe they should wonder why those businesses agree to be taken to the cleaners when there are cheaper alternatives.


Scientists want rapid renewables deployment – temps could be rising faster than thought Renew Economy

New research model factoring in energy use per person warns world could have less time than expected to limit dangerous global warming, and must transition rapidly to renewables.


India’s growing coal glut stalls mines Renew Economy

Growing mountains of coal stockpiles in India has led to several mines temporarily halting production, with major implications for Australian projects.


Victoria looks to accelerate rooftop solar by cutting red tape Renew Economy

State govt acts to make it quicker and easier for Victorian households, small businesses to install rooftop solar, potentially reducing connection delay by 55 days.


Tasmania energy plan a missed opportunity for renewables Renew Economy

The cost of meeting Tasmania's energy shortfall with gas and diesel will be very high, but minister's energy plan leaves us poorer and no wiser on energy security.


US solar market to more than double in 2016 to reach 16GW Renew Economy

The US solar market is set to grow a staggering 119% this year as the US nears it's millionth solar installation.


US elections and the TPP explained AFTINET

9 March 2016

If you’ve been keeping an eye on the US elections you have probably heard that all the leading candidates are opposed to the TPP (albeit for very different reasons).

Hilary Clinton is the most likely Democratic Party candidate and while she did support the TPP negotiations as Secretary of State, after the text was released she said it didn’t meet her standards and she could not support it.

"I want to make sure that I can look into the eyes of any middle-class American and say, 'this will help raise your wages.' And I concluded I could not,” she said.

Bernie Sanders is even more strongly opposed, and has a record of having opposed previous agreements like the North American Free Trade Agreement (NAFTA). 

For his part Republican frontrunner Donald Trump has said the TPP is a “disaster” negotiated by “incompetent people.”

The TPP has to be rat...

Wednesday, 09 March


The Monetarism Trap snares the second Wilson Labour Government Bill Mitchell – billy blog

This blog provides another excerpt in the unfolding story about Britain and the IMF. As I noted in this blog – The British Monetarist infestation – I am currently working to pin down the historical turning points, which allowed neo-liberalism to take a dominant position in the policy debate. In doing so, I want to demonstrate why the ‘Social Democrat’ or ‘Left’ political parties, who still have pretensions to representing the progressive position (but have, in fact, become ‘austerity-lite’ merchants), were wrong to surrender to the neo-liberal macroeconomic Groupthink. This is a further instalment of my next book on globalisation and the capacities of the nation-state, which I am working on with Italian journalist Thomas Fazi. We expect to finalise the manuscript in May 2016. In the last instalment, I traced back and demonstrated that Britain was engulfed in Monetarist thinking long before Margaret Thatcher took over. She really just put the ‘(rancid) cream on the top of the (inedible) cake’. I showed that the British Labour Party were infested with the Monetarist virus in the late 1960s and James Callaghan’s famous 1976 Black Speech to tge Labour Party Conference was just a formal recognition of that disease. It really just consolidated what had been happening over the prior decade. This historical journey also helps us understand that it was not the OPEC oil crisis in the early 1970s that provided the open door for governments to reject Keynesian policy. In Britain, the Treasury and Bank of England had fallen prey to Monetarist ideas following the elevation of Milton Friedman onto the world stage. These subsequent events just helped keep the insurgency moving until total dominance in the contest of ideas was won. Today, we start with the Bank of England’s...

IndyWatch Australian Economic News Feed Archiver

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