First, Crikey has a seasonal offering this week of 25% off for gift subscriptions. If you’re a subscriber already, you can get $33 off a renewal (and also enjoy my piece today on Rod Culleton’s resignation from One Nation).
Second, I forgot to post the latest BludgerTrack update at the close of business last night, mostly because the result wasn’t very interesting, with only the usual Essential Research to add to the dataset. Labor gains 0.2% on two-party preferred, together with projected seats in Victoria and Queensland. Essential also included its monthly leadership ratings, causing a very slight improvement in both leaders’ net approval ratings. Essential will have one result for the year tomorrow, which will presumably be a wrap for all federal polling in 2016. However, The Australian should have Newspoll’s quarterly state and demographic breakdowns, along with scattered state results.
Good morning Dawn Patrollers. Get your teeth into this lot! Not unexpectedly there’s quite a lot on MYEFO.
A young Turkish policeman has shot dead the Russian Ambassador in Ankara. This does not bode well.
http://www.huffingtonpost.com.au/2016/12/19/russian-ambassador-shot-and-killed-in-turkish-capital-of-ankara/?utm_hp_ref=au-homepage
Ross Gittins tells us not to believe anything any politician on either side says about the mid-year budget update and the expected further deterioration in the budget deficit it reveals.
http://www.smh.com.au/comment/blame-game-hides-real-reason-for-deficit-difficulty-20161219-gtecl6.html
“The ratings agencies won’t fall for it, and neither should you”, says Peter Martin. He lifts the lid on the trickery within Morrison’s MYEFO.
http://www.smh.com.au/federal-politics/political-opinion/myefo-you-call-that-a-budget-improvement-the-ratings-agencies-wont-20161219-gtebx5.html
Laura Tingle writes in a similar vein. Google.
/news/politics/myefo-helpful-discovery-of-treasury-mistakes-is-the-biggest-feature-of-the-budget-update-20161219-gte3v8
Jackson Stiles tells us that the government did almost nothing in Monday’s MYEFO to shield workers from a ratings downgrade and the economy’s “downward spiral”, a senior economist has warned.
http://thenewdaily.com.au/money/work/2016/12/19/myefo-do-nothing/
This academic finds two big political problems buried within MYEFO.
https://theconversation.com/there-are-two-big-political-problems-buried-in-the-latest-budget-update-70595
Michael West says Treasurer Scott Morrison was at it again yesterday, chanting that frayed old mantra that corporate tax cuts “grow the economy” and deliver a “boost to business”.
http://www.michaelwest.com.au/tax-cuts-for-banks-and-multinationals-great-idea-not/
Coalition’s policy ineptitude exposed as MYEFO points to multiple credit downgrades says Stephen Koukoulas. He’s not impressed.
https://www.theguardian.com/business/2016/dec/19/coalitions-policy-ineptitude-exposed-as-myefo-points-to-multiple-credit-downgrades
Rob Burgess asks Morrison for a bit more budget honesty.
http://thenewdaily.com.au/money/finance-news/2016/12/19/myefo-morrison-honesty/
Greg Jericho says Morrison’s only hope to save the budget is a wages breakout.
https://www.theguardian.com/commentisfree/2016/dec/19/morrison-will-be-hoping-for-a-wages-breakout-it-may-be-the-only-way-to-save-the-budget
Martin reckons the MYEFO is a bit political as a preparation for the 2017/8 budget.
http://www.smh.com.au/federal-politics/political-opinion/budget-update-bad-news-now-in-the-hope-of-good-news-in-may-20161218-gtdwaj.html
Section 2 . . .
A rather lacklustre contribution from Michelle Grattan on MYEFO.
https://theconversation.com/aaa-rating-saved-despite-bigger-deficits-in-budget-update-70587
Political leaders need to clear the fog obscuring the nation’s economic facts says Shaun Carney. If only the Coalition hadn’t been demonising debt for so long! Google.
/news/opinion/political-leaders-need-to-clear-the-fog-obscuring-the-nations-economic-facts/news-story/ed4c2bdd5983860ac193e6e398432885
The political disclosure laws in Australia are a joke. They are opaque, tricky and designed to obscure the link between money and political outcomes writes Steph Peatling. Our political donations disclosure arrangements are a joke.
http://www.smh.com.au/federal-politics/political-opinion/malcolm-turnbull-could-do-worse-than-starting-2017-by-draining-his-own-swamp-20161219-gtdxej.html
Kate McClymont on the substantial fall in the share price for Seven Media after it has supported its embattled CEO after his “coke fuelled affair” with an employee.
http://www.smh.com.au/business/media-and-marketing/sevens-share-price-plummets-after-claims-of-cokefuelled-affair-by-boss-tim-worner-20161219-gteezl.html
Michaela Whitbourne writes on Eddie Obeid’s non unexpected bid for release on bail.
http://www.smh.com.au/nsw/eddie-obeid-seeks-release-from-prison-before-christmas-20161219-gte06n.html
And now the IMF’s Christine Lagarde gets criminally charged.
http://www.smh.com.au/business/world-business/imf-chief-christine-lagarde-found-guilty-of-negligence-20161219-gteiq3.html
How our tax system hurts married women.
http://www.smh.com.au/business/workplace-relations/sometimes-its-just-better-to-stay-single-how-the-tax-system-hurts-married-women-20161219-gte1rx.html
Never mind the others in the middle east – it’s Iran and Saudi Arabia that are the rela trouble.
http://www.smh.com.au/world/how-the-struggle-between-iran-and-saudi-arabia-tore-apart-the-middle-east-20161119-gst94b.html
Can (and should) the US electoral college refuse to make Trump President?
http://www.afr.com/news/politics/myefo-helpful-discovery-of-treasury-mistakes-is-the-biggest-feature-of-the-budget-update-20161219-gte3v8
It appears that Victoria has been dudded when it comes to federal infrastructure funding.
http://www.theage.com.au/victoria/victoria-handed-just-77-of-federal-infrastructure-cash-20161219-gteefd.html
MYEFO has cost savings in it for “welfare compliance” but the IT issues that Centrelink continues to have makes it an unfair one-way street.
https://www.theguardian.com/australia-news/2016/dec/19/fears-centrelink-online-glitch-may-send-welfare-recipients-to-debt-collectors
Section 3 . . .
Joel Mears writes that the Putin-Trump bromance could send gay rights backward.
http://www.smh.com.au/comment/vladimir-putin-donald-trump-bromance-could-send-gay-rights-backwards-20161219-gtdxvz.html
Yet more APS pay and conditions deals offers have been voted down. When is it all going to blow up?
http://www.canberratimes.com.au/national/public-service/more-public-service-pay-deals-rejected-20161219-gtdyyo.html
Nick Xenophon has warned the gambling industry that 2017 will not be a good year for them. He has pledged to haul Woolworths and poker machine manufacturers before a Senate committee.
http://www.smh.com.au/business/retail/gaming-industry-blocks-coles-push-for-poker-machine-reform-20161218-gtdsyh.html
The ugliness of the political relationship breakup between Culleton and Hanson continues.
http://www.smh.com.au/federal-politics/political-news/rodney-culleton-and-pauline-hansons-war-of-words-continues-following-one-nation-split-20161219-gte6k8.html
Andrew Street writes that One Nation is doing exactly what it does best – falling messily.
http://www.smh.com.au/comment/view-from-the-street/one-nation-is-doing-exactly-what-it-does-best-messily-falling-apart-20161218-gtdwvj.html
This is not good news for those who responsibly manage pain with codeine-based painkillers. It is likely they will only be available by way of prescription from 2018. Google.
/national-affairs/health/painkillers-with-codeine-to-require-scripts-from-2018/news-story/b30c824925e55ed014f0b53c7519ac53
The IT meltdown at the ATO has had a heavy impact on a couple of thousand casual workers who were sent home as a result.
http://www.smh.com.au/comment/smh-letters/stay-or-go-dissatisfied-senators-should-forfeit-seat-20161219-gtdz4y.html
Peter Martin looks at what the proposed new copyright legislation might mean to us.
http://www.smh.com.au/federal-politics/political-news/copyright-shakeup-what-you-see-and-hear-could-be-about-to-change-20161219-gte3q7.html
Nicholas Stuart sees that Dutton’s disappointment is a sign that all is not well.
http://www.canberratimes.com.au/act-news/duttons-disappointment-is-a-sign-that-all-is-well-20161219-gte9ht.html
Not everyone is a loser in MYEFO!
http://www.smh.com.au/federal-politics/political-news/midyear-budget-update-mps-to-benefit-from-478m-spend-on-more-staff-offices-and-parking-20161219-gte47m.html
Here’s one bit of good news for NSW apartment dwellers in the new strata title by-laws – protection from smoke penetration and secondhand smoke.
http://www.smh.com.au/comment/apartment-dwellers-can-stamp-out-secondhand-smoke-20161219-gtdyeh.html
Section 4 . . . with Cartoon Corner
In the absence of a genuine security threat to scare the punters, just make one up. Ian McAuley takes aim at the latest Turnbull Government scare campaign.
https://newmatilda.com/2016/12/18/the-great-wall-of-malcolm-is-another-chink-in-democracys-armour/
The future of Bellamy’s chairman Rob Woolley and, potentially, chief executive Laura McBain looks increasingly in doubt as the trading suspension of the Tasmanian organic infant formula ¬company prepares to be lifted ¬tomorrow. Google.
/business/companies/bellamys-chiefs-in-crosshairs-as-investors-brace-for-bad-news/news-story/220e3250f94d1e2455d9a93327e72bb5
Cathy Wilcox and the diminished One Nation.
And Ron Tandberg sees it from another angle.
More from Cathy Wilcox on how Turnbull draws his inspiration.
Ron Tandberg and the spotlight not on Abbott.
David Pope and Santa ScoMo’s budget delivery.
Mark Knight depicts Morrison as a hapless and angry fast bowler.
http://cdn.newsapi.com.au/image/v1/ad217292d0205d6af472deaa3ef0cc91?width=1024
Jon Kudelka nicely sums up Morrison’s MYEFO spiel.
http://cdn.newsapi.com.au/image/v1/dff251aa145ccc45ad70465aae4d834e
Malcolm compares his Budget with a household budget. These savings are the equivalent of raiding the kiddies’ moneybox or buying a cheaper brand of toilet paper
http://www.theage.com.au/federal-politics/political-opinion/myefo-you-call-that-a-budget-improvement-the-ratings-agencies-wont-20161219-gtebx5.html
http://www.theage.com.au/comment/the-innovation-this-government-doesnt-want-20161219-gte2ds.html
Liberals really don’t appreciate Victoria, do they? This is pork barrelling on a huge scale.
http://www.theage.com.au/victoria/victoria-handed-just-77-of-federal-infrastructure-cash-20161219-gteefd.html
Morning bludgers
Thank you BK for today’s reports.
Heard Tony Shepard on radio supporting the cutting of entitlements to curb spending whilst giving tax breaks to big business. What a good little elf for the coalition. Sheesh
Lizzie
You can bet your bottom dollar, that if the coalition were in power in Victoria, they would be getting a bigger share of the pie
Meanwhile in Berlin, a Truck has driven through a crowd of people at a xmas market. Sigh…..
Victoria
We are a state of high growth and social advancement, so we must be punished by Malcolm and the jealous Libs.
Lizzie
The fibs are doing their best to derail our state govt. They dont care about progress for its citizens, only regaining political power.
Which by the way, has GG popped up at all?
Victoria
No, GG has gone into silence. Don’t know whether he’s pee’d off with us all, gone on holiday, or ill.
Morning all. Thanks BK for your comprehensive roundup of the MYEFO coverage. Most commentators have rightly called Morrison’s accounting tricks and hectoring on business tax cuts for the crud that it is.
Why propose business tax cuts that will not stimulate the economy at a time when tax revenue is the problem? I think Steph Peatling hits the nail on the head with her article about non disclosure of financial links in Canberra. Corporate money flows into Liberal party coffers and so Scott “Double A” Morrison argues for corporate tax cuts, even if they make no economic sense. Who cares about the long term? He has been reelected. No doubt a cushy spot will be found for him if the Oibs are turfed in 2019. Have a good day all.
On this topic of the credit rating of the federal government when spending its own currency, Ross Gittins, Peter Martin, and Greg Jericho are way off the mark, along with almost everyone else. It is completely wrong to claim that the Government of Australia – the issuer of the Australian dollar – could ever involuntarily fail to meet a financial commitment denominated in Australian dollars.
On many economic subjects Ross Gittins, Peter Martin, and Greg Jericho are good value. On the finances of the federal government, they don’t know what they are talking about.
That’s right, Nicholas. The truth is reserved only for yourself and Bill.
…still waiting for that one example.
There have been hundreds of civilisations, over thousands of years, all of which printed their own currency. It must have occurred to at least one of them that there was no reason to stop churning out money. By your reasoning, this civilisation would have been an overwhelming success.
Given those perameters, finding one example of a country which has put into practice the ‘let’s just print more money’ approach to economic problems shouldn’t be difficult for you to find.
Alternatively, if some mysterious change to the way the world works has made this idea viable now when it wasn’t in the previous few thousand years of recorded history, you should be able to explain what it is (or at least quote Mitchell explaining why it is).
Lizzie
Dont know why GG could be annoyed with us, he has thick skin!!
Yep, like I said Rome is burning and all this lot can do is faff about at the margins with meaningless stuff.
Ron Tandberg and a bit of Christmas spirit from Potatohead.
Bill Maher on Trump, the Russians and other stuff.
http://www.attn.com/stories/13685/bill-maher-talks-trump-russia-and-war-on-christmas?utm_source=facebook&utm_medium=direct-share&utm_campaign=shares
Good question
John Harwood
59m59 minutes ago
John Harwood @JohnJHarwood
from conservative columnist @JRubinBlogger: “a legitimate question exists as to whose side
Oops. Try again
John Harwood
1h1 hour ago
John Harwood @JohnJHarwood
from conservative columnist @JRubinBlogger: “a legitimate question exists as to whose side Trump is on” https://www.washingtonpost.com/blogs/right-turn/wp/2016/12/19/trumps-own-truther-act-is-frightening/ …
Victoria
On Twitter, an interview with Trump in which he says the only way to punish terrorists (who don’t care if they die) is to kill their families. Then they will care. I’m not sure of the date.
Fess
Thanks for posting Bill maher. As. Always. He is the voice of reason
http://www.abc.net.au/news/2016-12-19/chinese-pollution-alert-factories-close-cars-restricted/8133496
Lizzie
My overall view with respect to Trump and what he says. He has always displayed delusions of grandeur. Can you imagine now that he is actually leader of the free world, how he sees himself?! Terrifying doesnt even begin to explain it. My expectation is that should he stray too much from the script, he will be curtailed in a very dramatic way
Vic:
Yep he’s a voice of sanity in an insane world!
CNN Politics
CNN Politics – Verified account @CNNPolitics
The hacking investigation battle heats up http://cnn.it/2hhXVNz
Embedded image
2:27 PM – 19 Dec 2016
15 RETWEETS19 LIKES
http://www.theage.com.au/victoria/codeine-crackdown-common-painkillers-will-require-prescription-from-2018-20161219-gtekwp.html
Nicholas – You go on endlessly about Australia having a fiat currency. That is obvious. None of those economists contest that. So the government can’t, theoretically default. However, if the govt got so far in debt that it had to print a lot of dollars to pay its debts that would probably spark inflation, so there are constraints (which we are a long way from reaching).
Two examples of governments that did not back their currency are
The early years of Weimar Germany anf the Confederate states of America. Weimar apparently deliberately to disrupt Versailles. The CSA was interesting in that their currency was issued as promissary notes to be repaid 10 years after the war ended – a sort of Hail Mary approach. 150 years later there are so many still in circulation that they are not even collector’s items. Of course real commerce in the CSAwas done with greenbacks.
I am still interested in Nicholas’ qualifications and employment – does he have some qualification or experience to back the theory or is it just crackpot opinion
We could print currency (or, really, we could print a lot more than we already do) as N suggests. The problem is it would be inflationary, in the sense that it would encourage economic agents to prefer to hold values other than currency and the value of the currency would fall. Agents would hoard values other than currency. This would be inconvenient and inefficient in many ways and would likely disrupt asset prices, production, employment and investment. It’s the kind of thing we could do in a deflationary crisis, but it’s not the kind of thing you’d do as matter of everyday policy.
We have to find other ways to reach full employment.
Oakeshott Country
Tuesday, December 20, 2016 at 10:29 am
Two examples of governments that did not back their currency are
The early years of Weimar Germany anf the Confederate states of America.
No currencies are “backed” – ie, are exchangeable for, say, gold – these days.
Obviously but there is backing in that they are government issue, with the implication that monetary policy will enable a stable currency. If there is no confidence in this inflation follows – just as you have said. In this sense all currencies are fiat
Sky News Australia
1h1 hour ago
Sky News Australia @SkyNewsAust
Greg Barton says the attack in Berlin doesn’t change anything for Australia as we are already ‘on high caution’ http://bit.ly/2i28msz
1:63
nicholas @ #65 Tuesday, December 20, 2016 at 8:20 am
Printing money to repay debt is a de facto form of default. From the perspective of an offshore investor it would lead to losses as the currency was devalued. Issuers that are more likely to need to resort to the printing press should have lower credit ratings.
briefly @ #85 Tuesday, December 20, 2016 at 10:33 am
I’m pretty sure you can buy gold with AUD, any time you like. The price is listed on news reports.
Saw the front page of the deadwood GG today. In very large print at the top of the page we are told that Scrott has clung on to a Triple A due to a “razor thin surplus ” !!!! .
Yes but it is many years since Australian notes had:
Payable in Gold Coin at the Commonwealth Treasury at the seat of Government
Seat of government rather than Canberra tells you how long ago
Obeid refused bail and will be spending Christmas in goal good one.
MTBW you’re assuming Obeid is “Christian”?
I have my doubts (if not in reality – certainly not spiritually!!!)
MTBW
I reckon a hypertensive crisis or severe chest pain is about 72 hours away. I may be cynical but I think he knows too much from both sides of the chamber to do serious time
Luckily we have long since dispensed with the gold standard. These days we have a mutual confidence standard. It is confidence that determines the exchange value of currencies. The willingness and ability of the issuer of currency to pay interest on its borrowings, to redeem them when they fall due and to hold alternates (other currencies) in reserve are among the many factors that determine confidence in any currency. We can choose hard money or soft money. If we pursue hard money policies, the cost of capital should be less than it otherwise would be and we will be able to better mobilise the investment we need to grow output, employment and incomes.
Of course, by themselves, hard money policies are not sufficient. But they are necessary.
Obeid and family have a strong Maronite faith. Not sure if the Maronites do Dec 25, Jan 6 or both
OC
How the mighty can fall!
He is a horrible person.
There is still time for Obeid to make his application for bail in the High Court before Xmas and the International Court of Justice by the end of the year.
Appreciate your explanation Briefly but it will have no effect on Nicholas.
From a simplistic view if I loose confidence in the government’s ability or willingness to maintain a stable currency, I am not going to keep savings. Those with the wherewithal will convert their cash to a safe haven currency or gold while those without those means will spend. Investment disappears and inflation takes off.
I think that being employed is one determinate of views on monetary policy or effectively how you view money. Someone who is employed wakes at 5 and says I really don’t want to travel 2 hours do 8 hours labour and then travel 2 hours back but if I don’t I won’t get the things I want.
Nicholas view on the other hand is that its the government’s duty to provide everyone with a living and should continue to print money to improve that living. To me this implies a certain passivity That reduces life’s meaning
https://pursuit.unimelb.edu.au/articles/no-pot-of-gold-at-end-of-budget-rainbow?utm_source=twitter&utm_medium=social&utm_content=story