-
Hey, guest user. Hope you're enjoying NeoGAF! Have you considered registering for an account? Come join us and add your take to the daily discourse.
AusPoliGaf |Early 2016 Election| - the government's term has been... Shortened
- Thread starter Bernbaum
- Start date
- Status
Antiwhippy
the holder of the trombone
We already have Pauline Hanson.
Old people in particular seem super consumed by it. That's anecdotal I realise.
I've usually seen justification for it along the lines of not wanting to saddle future generations with a deficit but for some reason this generational selflessness never seems to translate into doing anything about the climate, about problems in education and healthcare, about housing affordability, about not pissing off our increasingly powerful regional neighbours etc.
Government deficits matter. Size-wise they shouldn't be that large. They can and should exist though.
And really we have a whole heap of savings waiting to be looked at (home not part of the means test, PHI subsidy, negative gearing), it's just that it's politically unpalatable to do so.
The LNP cover her base currently. If they pivot too far back to the centre it might happen though.
bobnowhere
Member
There are homeless veterans on the street and the budget will destroy us all and doom the country forever. Make me feel better about my White Australia racist attitude towards refugees, please?
The analogy I use is buying a house. Basically no-one can buy a house and not be in debt, but it's an investment in the future as it gradually gets paid off. That's an example of *good* debt. There's no harm in the gov't being in debt as long as that money is spent on good things... like solid broadband infrastructure (a la FTTP), education and affordable housing.
Some people just don't fucking get it. If they think of debt as the above and not something like a credit card (do they just assume we accumulate fucktons of interest?) then it'd be a much easier pill for them to swallow.
Ugh :/
PhantomZone
Member
Because it's better to be in surplus than knee deep in debt.
Don't want to be like Greece
Labor will just spend spend spend like they are Scrooge McDuck in Ducktales swimming in a pool of money.
#bringbackAbbott
Tax receipts increase when the economy is booming. Surpluses should be saved for when it isn't. Tax reductions should be considered carefully, but it is far too tempting to assume a boom is a new normal and use tax cuts to make people like you. Baird might be a cunt but I'm glad he has resisted the calls to reduce stamp duty. If only he'd use it to reopen all the women's shelters Fatty O'Barrell closed.
We should also tax childish nicknames for politicians.
Last election Christine Milne came out and basically said that we should analyse whether debt is a good or poor investment on a case-by-case basis. It was the most sensible thing I saw a leader say about debt all campaign.
bobnowhere
Member
This angle from a few days ago made me laugh.
Pretty much. The RBA is crying for investments in infrastructure in the Australian economy.
Aarglefarg
Member
Lighting hasn't been his friend the past few weeks.This angle from a few days ago made me laugh.
Exactly. Libs biggest problem is they've been saying "All debt is bad! Yargh!" for ages, without thinking it might actually be better to consider spending over saving, as long as it was doing both in the right areas.
But somehow negative gearing = good spending, yet Gonski = bad spending. ETS/Carbon tax elimination = good thing, but renewable energy sources = bad thing. Trade union royal commission = good spending, increasing immigrant intake = bad spending.
Interesting how it used to be "Our party keeps interest rates lower so you can accumulate more personal debt!"
Candescence
Member
Yeah, Turnbull has been a massive disappointment in this regard. He went back on his word the moment Labor revealed its negative gearing policy and hasn't gone back.
To be fair he tried a different tact in the debate and it backfired on him. Fact is more people respond to these scare campaigns. Shortens debate strategy was basically just 'say nice things without engaging on policy' and it clearly worked for him.
Politicians just do what works, if people responded differently they'd advertise differently.
Politicians just do what works, if people responded differently they'd advertise differently.
Which I kinda hope why Labor's big target strategy gets rewarded.
LNP have gone for a mix this time as well, which is definitely one up on boats and deficit and whatever else that moron went on about.
Biggest target election since 1993, what an exciting time to be doing poli-sci.
I've been most disappointed with the Greens this election cycle, of all three major parties. I expected better than the small-target populism that's been the hallmark of their campaign this year. I never thought I'd be more disappointed with the Greens than the LNP when it comes to campaigning and election year policies.
roosters93
Member
What a shit show
Seems he got some inspiration from our thread title
lol
more lol
He tries hard I'll give him that
Greece's sovereign debt issue will very unlikely happen to Australia in the same way unless you have literally no idea of why Greek ended up in such a horrible solution.
Fudged financial statistics, no currency flexibility due to adoption of the Euro, debt that was mostly held by private banks, severe systematic issues with regards to economy/work culture, severe issues with tax evasion, enormous government expenditure, etc.
Debt is a very simple way of describing Greece's woes and I'd argue that it's actually not very accurate. Australia may have issues but you're sort of dumb if you think that's going to happen to us because Labor spends money.
bobnowhere
Member
The funny thing is in some cases supply has increased, dramatically so and it has not lead to a decrease but massive inflation in the rush!
Recent 'flood' of released land in Canberra raises inflation questions
So maybe supply isn't the easy answer either. Even if the above is a one off, wouldn't a massive increase in supply lead to lower prices thus depressing already built house prices in a need to become attractive to buyers. Also Tophat Turnbull, I'll pay the tax on that one, claims reinstating the ABCC, anyone remember that (?), would drop construction prices by 30% again depressing all other houses around them.
It's a shame the answer is not as simply as removing NG and CGT or just increasing supply though I suspect the horse has already bolted and wage growth will never catch up or even equalise with house prices unless there is a economy destroying crash.
what was that thing churchill said? the best argument against democracy is a conversation with the average voter? lmao
ah, if only we could bring back benevolent god emperors. let's see how the us experiment pans out tho
Actually, cutting government spending to return to surplus is EXACTLY what Greece did. Its called austerity. And its something the Liberals seemed to be obsessed with.
Cutting government spending so you can pay off debt, in most cases slows the economy down as you are removing money from the economy. It means people are earning less so theres less tax revenue. Less tax revenue makes it harder to finance the debt you have. So not only do you have more debt because you cant finance it but the economy has slowed because youve stopped putting money into it and it can snowball out of control.
Funnily enough, government spending can stimulate the economy, that money put in multiplies itself, and you get growth and higher tax receipts and more money in the budget to pay finance debt. You just have to compare the US to Greece. US spent a lot of money when their economy was about to tank and it helped stimulate the economy back to growth. Greece were forced to stop spending money and their economy tanked completely and they had less money from tax to pay off their debt and the associated costs of a slow economy, like unemployment, welfare, and crime, and their position worsened.
Invest during economic slowdown. Pay off debt during economic growth. Its pretty much what they teach in economics school. Don't believe the scare campaigns.
Government spending and austerity has no impact on short-term AD when the economy is operating above the ZLB. The RBA will just offset it.
It's why Rudd's stimulus was largely unnecessary outside of making sure the public understands the government was willing to step in, making them less likely for panic to butterfly. The best thing he did was back the banks, precluding said financial panic.
Austerity can be expansionary, it depends on the context. Not expansionary during a recession though.
Greece's problem is the Euro. Their exchange rate cant depreciate and make their economy more competitive. The solution is either fix the Eurozone (very difficult) or leave the Euro (very painful. Capital will flee the country. It'll be half a decade of pain at the least). As it is Greece is just going to be slapped around every few years for a long time if things aren't changed.
It's why Rudd's stimulus was largely unnecessary outside of making sure the public understands the government was willing to step in, making them less likely for panic to butterfly. The best thing he did was back the banks, precluding said financial panic.
Austerity can be expansionary, it depends on the context. Not expansionary during a recession though.
Greece's problem is the Euro. Their exchange rate cant depreciate and make their economy more competitive. The solution is either fix the Eurozone (very difficult) or leave the Euro (very painful. Capital will flee the country. It'll be half a decade of pain at the least). As it is Greece is just going to be slapped around every few years for a long time if things aren't changed.
30yearsofhurt
Member
It's been clear for a long time that the Euro only helps Germany and maybe France.
Not even Italy or Spain are doing well with it. It's the elephant in the room.
The way a monetary union should work is like USA and Australia. Areas that aren't doing so well can increase their income through federal transfers. Like we do for Tasmania, NT and SA. America would do it for many southern states. No such mechanism exists in Europe. The transfers are replaced with loans from France and Germany to service debt held by French and German banks and pension funds at exorbitant interest rates.
Greece needs to bite the bullet, go back to a Drachma and stop bending over backwards to pay off debt that the holders have already written off as worthless.
You can be damn well sure that the Golden Dawn is thinking that way.
Crab (banned at the moment but one of the smartest econ people on GAF) says that the best stimulus for anything but the most serious recession is a robust and generous welfare system because it basically works as an automatic stabiliser.
Eurozone's problem are more structural than that. The ECB doesn't act as a lender of last resort, it didn't target inflation until recently, and it only really looks at inflation in Germany. The risk-weighting for bonds was all off, as Greece and other countries in current financial troubles used Germany's credibility to hide some of the risks in their country. Other things that I can't remember because it's been a few years since I've seriously looked into it, something to do with the banks themselves and how they operate in the union.
There's a very good PDF online on how to fix the Eurozone (that I can't find unfortunately) that laid out 5 or 6 major, major structural reforms on how to prevent future crises, and fix the current depression gripping many states. The only problem (depending on your POV) is that at the end the European Union would be a unified country in all but name.
Monetary policy + automatic stabilisers + citizens understanding governments are willing to step in if necessary are pretty much all that is needed to stem financial panics, and smooth out the troubles in the long run.
Problems are run into when the central banks hit the ZLB, but modern central banks have more tools than just setting the cash rate nowadays. Not to mention fiscal stimulus becomes much more expansionary at the ZLB, meaning the government can directly stimulate AD if required.
Also, PollBludger has had a go at simulating the Senate.
http://blogs.crikey.com.au/pollbludger/2016/05/24/simulating-the-senate/
It doesn't look much better for the LNP. Have to negotiate with the Greens or Labor, or a scattering of parties from all over the political spectrum. I imagine KAP might be willing to support many of the LNP's proposals after rural concessions are implemented, and the LDP will be for many of them as well, but that leaves negotiating with the Xenophon group, who at this point seem to be squarely 'populist'. I can't see them passing any sort of reform that was being blocked before.
Elaugaufein
Member
It doesn't exactly make huge amounts of sense to be in a monetary union without being in a fiscal union anyway (well unless you're the Gorilla in this scenario).
Antiwhippy
the holder of the trombone
I'd rather big ideas that will get worked out in the parliament rather than appealling to racists honestly.
D
Deleted member 231381
Unconfirmed Member
They might not have any effect on AD, but there are obviously other important effects like redistributional impacts; austerity typically implies a reduction in transfers so a greater proportion of the demand ends up being from high-income than low-income groups.
Depends how it's handled, but that isn't necessarily a bad thing.
Austerity where this welfare system is gutted:
http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2012/11-2/welfare cliff.jpg
Wouldn't be a bad thing. The welfare trap is immense.
Also what are your EUIV exploits.
I have so many questions about the Nick Xenophon Team
Do they have a list of policies? Edit: They do.
How are these policies decided, is there a collaborative process or is it just Nick Xenophon making all decisions?
Where in SA exactly does Xenophon actually draw his support from and what age groups?
How could anyone justify voting for a party without knowing anything about the majority of the candidates?
Finally does anyone want to takes bets on how long it will be after the election before NXT Senators start defecting?
Do they have a list of policies? Edit: They do.
How are these policies decided, is there a collaborative process or is it just Nick Xenophon making all decisions?
Where in SA exactly does Xenophon actually draw his support from and what age groups?
How could anyone justify voting for a party without knowing anything about the majority of the candidates?
Finally does anyone want to takes bets on how long it will be after the election before NXT Senators start defecting?
I'm not a fan of Xenophon's voting record, he seems like more and more of a worm to me as time goes on.
"Ricky Muir: The Australian Cincinnatus?"
D
Deleted member 231381
Unconfirmed Member
I don't think that argument follows. I mean, yes, the welfare trap is harmful, but removing the welfare trap by lowering welfare before the cliff isn't necessarily an improvement; even if people have a greater incentive to pursue work, if they can't find it, they're now worse off than they are before. The better solution is raising up where the cliff is, through the provision of in-work benefits and a more gradual tapering.
Mostly PUing Castile as Aragon ten years into a multiplayer game, forcing out the Portugal player who helped me do it immediately afterwards, taking over Italy, and then managing to beat an Ottoman-Mamluk alliance and force them to release Byzantium despite not actually have an army when they declared (admittedly with Russian allies).
A quick read of Xenophon's policies makes it look like they're terrible in some places and great in others.
Like he wants to implement protectionism and a federal ICAC. Or gambling reform and research into health-hazards of GMO's. Or an ETS and expand the PHI subsidy.
It's just so weird. They don't seem to have any overarching ideological backing other than populist. And it's like for every good evidence-based one he has to implement one crappy feels-based one.
A better solution would be removing structural barriers to employment and implementing better welfare solutions such as negative income taxes. I also think we should look at removing automatic renewal of unemployment benefits after a certain time, so it remains as automatic stabilisers rather than anything else. Much of our current unemployment is structural rather than cyclical. Just look at unemployment levels surrounding low-human capital workers.
I'm not sure how moving where the welfare cliff is is a better solution. At some point you're still going to hurt a lot of people through unnecessary government action.
Dank. I finally finished the last of the hard achievements other than 3M and WC (it's so boring) the other week. It was a long journey.
Like he wants to implement protectionism and a federal ICAC. Or gambling reform and research into health-hazards of GMO's. Or an ETS and expand the PHI subsidy.
It's just so weird. They don't seem to have any overarching ideological backing other than populist. And it's like for every good evidence-based one he has to implement one crappy feels-based one.
A better solution would be removing structural barriers to employment and implementing better welfare solutions such as negative income taxes. I also think we should look at removing automatic renewal of unemployment benefits after a certain time, so it remains as automatic stabilisers rather than anything else. Much of our current unemployment is structural rather than cyclical. Just look at unemployment levels surrounding low-human capital workers.
I'm not sure how moving where the welfare cliff is is a better solution. At some point you're still going to hurt a lot of people through unnecessary government action.
Dank. I finally finished the last of the hard achievements other than 3M and WC (it's so boring) the other week. It was a long journey.
D
Deleted member 231381
Unconfirmed Member
Yes. Both of those are compatible with a supportive level of welfare provision, though; they're not orthogonal.
This just seems like a scheme for making the unemployed have to do menial paperwork more often with no real advantage other than increased administrative costs.
I agree it's structural, but I'm inclined to think it is less an issue of (for example) market overregulation and the like and more the effects of prolonged hysteresis. You have increased globalization resulting in Australia's industries with a comparative disadvantage being eroded, which in the case of Australia is low-skilled workers. That would not be a problem if those workers could then be easily re-employed in the industries in which Australia has a comparative advantage (high-skilled labour), but the obvious problem is that they're not high-skill in the first place. You then end up with people trapped in unemployment and deskilling further. It's a difficult problem and I think one facing most Western economies - what do you do with people whose livelihoods are no longer relevant and can't reskill easily?
I didn't say moving where the cliff is. I'm saying that there ought not to be a cliff, but that's compatible with both decreasing the welfare available before the cliff or increasing the welfare available after it - making sure that there's no disjunction in the incentive function, essentially - and that increasing welfare after the cliff is preferable.
As opposed to our current system where this doesn't exist? At some point administration has to come into play, we may as well make it work for us the best we can. Unemployment benefits with no administration for nine months would be much better than the current monstrosity we have.
Globalisation and free trade is a kaldor-hicks rather than pareto improvement. What we should be doing is capturing some of the extra gains from high-skilled labour and putting it towards transfer payments (NIT) that complement low-skill work that have an MPL lower than cost of living.
If this ever happens I'll eat my computer though.
Fact is you can't just put everyone in uni and hope the economy comes out high-skill. It's what we've been doing and it just isn't working. It's a complex problem that probably doesn't have a silver bullet solution. Most predictions show that the medium-term result of current automation and globalisation trends is a permanent reduction in the labour share of income.
Fair enough. Personally I think the Philadelphia welfare scheme is ludicrous, but Australia does have a much better system of fiscal transfers. Much less incentive distortion and much more progressive.
D
Deleted member 231381
Unconfirmed Member
Yes, it's a status quo improvement, but I'd like to think we can do better than either.
Agreed on both points.
Also agreed. Mind you, I think the reason there isn't a silver bullet is because people are looking at the wrong problem. In Keynes' day, they dreamed of capital increasing its share of income, so that man could work a four or three day week and have time for all that in life which is not the drudgery of production. We really ought to be looking at things like the basic income/a decent implementation of the NIT much more seriously.
Candescence
Member
Also, PollBludger has had a go at simulating the Senate.
http://blogs.crikey.com.au/pollbludger/2016/05/24/simulating-the-senate/
It doesn't look much better for the LNP. Have to negotiate with the Greens or Labor, or a scattering of parties from all over the political spectrum. I imagine KAP might be willing to support many of the LNP's proposals after rural concessions are implemented, and the LDP will be for many of them as well, but that leaves negotiating with the Xenophon group, who at this point seem to be squarely 'populist'. I can't see them passing any sort of reform that was being blocked before.
If anything, the government would have an even worse time of it, Labor+Greens would have a larger combined majority - remember that the Coalition right now has 33 seats, Labor has 25, and Greens have 10 (meaning 33 vs the 35 combined majority). This result would mean that there'd be a larger gap, with the government's numbers of 31 vs the Labor+Greens combined vote of 36, meaning it's much, much easier for the combined majority to cockblock the government whenever it suits them if they have three like-minded senators in the crossbench on any particular issue. And the Xenophon team would have about as much power as Palmer used to, and Xenophon isn't an obnoxious, flip-flopping jackass.
Isn't that basically what happened with Rudd and the free $500 thing? From memory, that was at least partially attributed for our stability during the GFC.
PS. The $4 per hour working thing basically IS generous welfare /tophat
PPS. For what it's worth, at least in Victoria the Libs will have one less seat in Corangamite. Sarah Henderson has literally done sweet fuck-all with her time in office, let alone anything near worth her keeping the most marginal seat in Australia.
That free $500 was pretty much unnecessary, Australia never came close to the ZLB. By the time it hit the economy the RBA was already raising rates.
- Status