#Auspol - Australia Votes 2019!

[Bloop Bloop]

Recession might be on the cards. Not always a bad thing. I'm glad the Libs are in power and not Labor. Labor would just hand out cash to people like they did last time.

People say you should spend your way out of a recession. All that does is create a deficit that future taxpayers have to pay off. I think better to introduce austerity measures, keep the safety net there for people who fall through the cracks, and let the economy contract a bit - having low inflation is actually a good thing.

[mrmoonymartian]

At least we're not in Labor. Then there could have been a nasty surprise in store after the contraction Australia has to have.

[deborah]

I would like to know what level of expertise you two have about this, since every economist knows that labor has actually done much better than the liberals over the past thirty years in this area. John Howard and every government since (of all persuasions) have done a pretty rotten job, apart from a couple of things that the Rudd government did to keep us out of the GFC. This lot are particularly inept, and have created the problems that are about to descend on us. I hope you have reason to continue to gloat, but fear that we’re all in for a rough time.

I would also really like to hear why recession is ever a good thing. For the country as a whole. Apart from the fact that you both appear to think it will line your own pockets.

[Bloop Bloop]

We have had 28 years of economic growth. Of those, the Liberals have been in power for 17 of them, by my count. Further, during this time they have significantly lowered our tax rates. In 2002, the 48.5% rate kicked in at just $62,000. Now, the 47% rate kicks in at $180,000. So we have seen 3 decades of reduced personal income taxes, rising disposable income, rising wealth and fairly balanced books. It's just a wondrous achievement.

What has Labor done "much better" over the past 30 years? For one, they've only been in power for a minority of that time. For another, the undisputed best government of the last 30 years, the Hawke government, actually introduced a lot of neoliberal reforms, so to the extent that it was a Labor government, it wasn't really a Labor government.

You might say the last six years have been inept - but economically, they've simply seen a maintenance of the status quo. That's enough for me. I don't want some sort of reversion to greater egalitarianism spurred on by taxes for the top end of town.

I don't think anyone on this forum is in for a rough time. Were we in 2007-08? Nope.

[Bloop Bloop]

Why can recession be a good thing? Because it pops asset bubbles, reverses distortions, keeps inflation low and pares down unsustainable industries.

[deborah]

We weren’t in recession then.

The 28 years of economic growth were brought about by the reforms from before, and at the beginning of that time. No government since the turn of the century, of either persuasion has had to do much (apart from Rudd, instantaneously, at the GFC, which he somehow managed to avoid us getting into). As I said, they’ve all been poor economically, and wasted opportunities - particularly Abbott.

We have entered a period of career politicians, and are suffering. The public service has been gutted: treasury has been changed to a political machine that can’t forecast; the bureau of statistics can’t even run a census; the banks and churches are allowed to run wild - with no oversight by specific departments that have been set up to provide oversight; customs can’t even send out boats. The productivity dividend and political dreams have meant that successive governments haven’t done the hard work of deciding what departments should actually be doing, and what they shouldn’t be doing, and thus what money is actually needed. The internet has meant that we are surrounded by gossip rather than news, and our institutions that could combat this (and shore up democracy), such as the ABC, are being deliberately broken.

Neither party is willing to tackle the problems, but labor appears less pro church, and pro bank, and more willing to tackle the outcomes of three royal commissions that challenge the banks and church (banking, child abuse and elderly care).

[marty998]

Why can recession be a good thing? Because it pops asset bubbles, reverses distortions, keeps inflation low and pares down unsustainable industries.

You don't need a recession for that. You need higher interest rates / an appropriately priced cost of capital.

Bubbles can come and go without being triggered by a recession. The 1987 stockmarket crash was a case in point.

Now in the case of inflation, it appears the conventional Monetary Theories have been broken for a decade. I don't think anyone has a clue anymore regarding why inflation is behaving the way it is.

[Bloop Bloop]

We weren’t in recession then.

The 28 years of economic growth were brought about by the reforms from before, and at the beginning of that time. No government since the turn of the century, of either persuasion has had to do much (apart from Rudd, instantaneously, at the GFC, which he somehow managed to avoid us getting into). As I said, they’ve all been poor economically, and wasted opportunities - particularly Abbott.

We have entered a period of career politicians, and are suffering. The public service has been gutted: treasury has been changed to a political machine that can’t forecast; the bureau of statistics can’t even run a census; the banks and churches are allowed to run wild - with no oversight by specific departments that have been set up to provide oversight; customs can’t even send out boats. The productivity dividend and political dreams have meant that successive governments haven’t done the hard work of deciding what departments should actually be doing, and what they shouldn’t be doing, and thus what money is actually needed. The internet has meant that we are surrounded by gossip rather than news, and our institutions that could combat this (and shore up democracy), such as the ABC, are being deliberately broken.

Neither party is willing to tackle the problems, but labor appears less pro church, and pro bank, and more willing to tackle the outcomes of three royal commissions that challenge the banks and church (banking, child abuse and elderly care).

https://www.theage.com.au/politics/federal/a-recession-may-be-inevitable-even-desirable-20190605-p51urg.html

The above is an opinion article that's on point.

The rest of what you say does not bear on economic management. It bears on other matters. In terms of economic management, the Howard government reforms have given the average household literally thousands of dollars each year back in their pockets from lowered tax rates across the range.  This has been done without plunging the budget into significant debt and without stopping GDP growth even in the wake of the GFC.

Sure, a Labor government would have reined in the banks. It would have increased Newstart (wait, no it wouldn't. It still doesn't commit to it.) But we'd also be paying thousands of dollars a year more in tax - that's just for average families. High-income families would be paying tens of thousands more. And that's before the Coalition reforms of 2019-2024 which will give all families another significant tax break. You forget the positive compounding impact of each family having that money in the bank.

It seems you think the function of a government is to fix all the ills of society, even at the expense of taxing more. I think the function of a government is to take as little income tax as possible while keeping society functioning and allowing for an opportunity for meritocracy.

[middo]

Why can recession be a good thing? Because it pops asset bubbles, reverses distortions, keeps inflation low and pares down unsustainable industries.

You don't need a recession for that. You need higher interest rates / an appropriately priced cost of capital.

Bubbles can come and go without being triggered by a recession. The 1987 stockmarket crash was a case in point.

Now in the case of inflation, it appears the conventional Monetary Theories have been broken for a decade. I don't think anyone has a clue anymore regarding why inflation is behaving the way it is.

I have some pet theories about why inflation is so low.  In my opinion it stems from, amongst other things, changes to the industrial relations laws.  One driver of inflation is wages growth, which makes goods and services more expensive, hence the need for wages growth.  How do we get wages growth?  There seems to be a theory that high employment levels cause wages to grow.  But is this really true?  If there are people who can be pulled out of the non-working population when jobs become available, and we can import workers at any time by just stating that they can't be found locally, then this driver of wages growth no longer exists.

Governments have also been significant players in driving down wages.  We heard the Federal Government saying we need wages growth, but do the AFP, the Public Service, Customs, the Military and other large employers pay significant wage rises?  No.  The Government ties them to productivity dividends, and only allows minimal 1.5% wage rises.  Hypocritical.

Unions have been hamstrung also in asking for wage growth.  While everyone gives them a hard time, there was wage growth when they had a reasonable amount of power, and they could strike without the threat of $33,000 fines per day per person.  The pendulum has swung too far to the restriction of the unions, and this is affecting us all.

Much of this has been mirrored in other countries too.  The union busting of the 1980's has finally had the expected flow on effect, and now we run around wondering why wages aren't growing and inflation is flat.

[Bloop Bloop]

Our wages are still high by OECD standards. The reason they're not growing as strongly as before is that they are correcting from a state where in the past our wages were abnormally high. Now in this globalised, immigrated world, there's going to be a period of adjustment in sectors like manufacturing and unskilled work which are prone to disruption from outsourcing and the gig economy.

[Kyle Schuant]

Why can recession be a good thing? Because it [...] pares down unsustainable industries.

And yet the number of corporate lawyers, Set Intimacy Co-ordinators, Diversity Co-ordinators, bank auditors (haha) and coal lobbyists will still grow. It's just the industries that actually produce a tangible and useful good or service that decline, because they've gone to China or become insecure contractor work.

[Bloop Bloop]

I thought Set Intimacy Co-ordinators were a must in this #metoo world?

[deborah]

John Hewson wrote that piece. Enough said.

If you can’t manage your own business (the public service), what hope do you have of managing the country? If your policy designers (the public service) aren’t doing the jobs you need, your economic credentials can’t get anywhere. If you fail to redesign departments (like businesses do), and just chose the lazy way out (by reducing each department budget by 2% a year), you aren’t going to get a streamlined business. The problem with the public service is not a lack of money, but the fact that many unnecessary parts are being kept because the politicians aren’t managing properly. This is totally related to economics, and I never said that the public service needed more money.

[mrmoonymartian]

I would like to know what level of expertise you two have about this, since every economist knows that labor has actually done much better than the liberals over the past thirty years in this area. John Howard and every government since (of all persuasions) have done a pretty rotten job, apart from a couple of things that the Rudd government did to keep us out of the GFC. This lot are particularly inept, and have created the problems that are about to descend on us. I hope you have reason to continue to gloat, but fear that we’re all in for a rough time.

I would also really like to hear why recession is ever a good thing. For the country as a whole. Apart from the fact that you both appear to think it will line your own pockets.

I was just making a joke. Maybe not the best one I've conceived, but the silence was pregnant.

[Kyle Schuant]

I thought Set Intimacy Co-ordinators were a must in this #metoo world?

Many Bullshit Jobs are a must. Useless unproductive people feel less bad about their useless lack of productivity if they are accompanied by even more useless and unproductive people. For example, every CEO whose sole method of improving his company's numbers is sacking thousands of people will be accompanied by an Executive Assistant whose job is very, very secure. She must answer his phone so he can avoid hearing from anyone who might expose him to reality, and arrange his appointments with people who will listen attentively and nod at the right times to applaud his great wisdom, and those people will then go and try to interpret his instructions in such a way as to not bankrupt the company. cf Sol Trujillo.

Bullshit jobs, using the criteria of "the people who did them said they were entirely bullshit" make up 40% of the economy. I think we can probably raise that estimate somewhat once we include people producing fuck-all who actually think they're productive, like Intimacy Set Co-ordinators and CEOs. Let's be conservative and call it 50%.

Those jobs are safe, however severe the recession, however tight the corporate belt is pulled. It's only the productive workers whose jobs are under threat in a recession. Which is, of course, why John Hewson thinks a recession isn't a bad thing - he's been an economist, a business journalist, a politician, and a political commentator, in other words he's spent his life talking about stuff. That's fun and nice, after all this forum is just talking - but we don't pretend we're being productive when we blather on about stuff.

[Bloop Bloop]

So then if the decently paid, secure jobs are such bullshit e.g. Exec Assistant/Economist, it should be easy for people who currently do actual work to transition into a job which pays better and requires no real wrk.

[Little Aussie Battler]

What makes you think that people get those jobs based on merit or capability?

[Bloop Bloop]

Not this again. Professional jobs are still restricted to white men from Scotch College only, right?

[marty998]

What makes you think that people get those jobs based on merit or capability?

I see very very few male executive assistants.... I can't imagine why    /s

[deborah]

Not this again. Professional jobs are still restricted to white men from Scotch College only, right?

All the studies still say so. Not quite, but certainly men, and certainly of European ancestry. I think you’ve even said that this is true.

But, getting back to money in pockets. The fact that government economic management has been poor has meant that productivity is declining, and that wages are stagnating. We are still relying on the government productivity improvements from about 30 years ago to do the heavy lifting. Again, you are relying on simple stuff that Howard did when he had windfalls, that couldn’t last forever, rather than proper economic management. And comparing us to the rest of the OECD is a bit disingenuous since many OECD countries are having similar problems.

[middo]

So then if the decently paid, secure jobs are such bullshit e.g. Exec Assistant/Economist, it should be easy for people who currently do actual work to transition into a job which pays better and requires no real wrk.

History shows that those that lose their job from productive work in a recession end up long term unemployed, and a burden on the taxpayer.

Don't throw out ridiculous ideas without doing your research first.

[Bloop Bloop]

Not this again. Professional jobs are still restricted to white men from Scotch College only, right?

All the studies still say so. Not quite, but certainly men, and certainly of European ancestry. I think you’ve even said that this is true.

But, getting back to money in pockets. The fact that government economic management has been poor has meant that productivity is declining, and that wages are stagnating. We are still relying on the government productivity improvements from about 30 years ago to do the heavy lifting. Again, you are relying on simple stuff that Howard did when he had windfalls, that couldn’t last forever, rather than proper economic management. And comparing us to the rest of the OECD is a bit disingenuous since many OECD countries are having similar problems.

I would be interested to see the studies. No, I've not said it myself, and it's not my experience (see below). 20 years ago, I would have agreed with you, and if you look at the professionals with 20+ years experience, it still holds true. But things have changed.

Re: money in pockets / OECD - we can only compare ourselves to the rest of the world. It's true that the last 10 years have not seen great outcomes - but the 20 years prior to that were fantastic - and overall, neoliberalism has grown the pie more than any other ideology could have, even with 10 years of stagnation. Keeping in mind that stagnation is not all bad; when you have had 40 years of rising living standards (thanks to neoliberalism), you can't always keep going up.

So then if the decently paid, secure jobs are such bullshit e.g. Exec Assistant/Economist, it should be easy for people who currently do actual work to transition into a job which pays better and requires no real wrk.

History shows that those that lose their job from productive work in a recession end up long term unemployed, and a burden on the taxpayer.

Don't throw out ridiculous ideas without doing your research first.

What I said was, if those unproductive jobs are so bullshit, like everyone says, why can't productive members of society go into unproductive, easy, lazy work? Is it just that the easy work requires a private schooling, Anglo background and a white name to get into? Because that's not my lived experience - and if you don't believe me, take a look at the latest Legal Admission rolls or Counsel rolls - more than 1/2 are women, and by my count more than 2/5 do not have "Anglo" names. I see a huge number of names that are of Asian, Greek and Jewish descent.

Also, our whole manufacturing industry has died out in the last 20 years. Yet the unemployment and long-term unemployment rates have remained steady. (You can say you disagree with the "1 hour" definition. Point is, during the whole period, the definitions haven't changed.) If you were right in saying that "those who lose productive work in a recession end up long-term unemployed", then the rates should have gone up and stayed up following the last recession. But they haven't.

[Kyle Schuant]

Aside from the "one hour a week" thing, there is also some other statistical jiggerypokery, for example a university student, a recipient of old age or disability is not counted as unemployed if not working, but is counted as employed if working.

More significantly for this discussion, the "employment" rate has remained steady, but the type of jobs has changed from permanent full-time to casual part-time. Having a full-time job, even a minimum wage one, is preferred by many people to having a part-time casual job. The auto worker who had a guaranteed 40hr and wage, overtime, sick and holiday pay, is now a (for example) cleaner who is given 5hr shifts so they don't have to give him meal breaks, he gets 4x 5hr shifts a week, they can be cancelled with 2 hours' notice and he gets nothing, and he has neither sick nor holiday pay. But he's still employed.

This is why there is the concept of underemployment, where the person is employed but would like more work - nobody collects statistics on who would like permanent employment vs casual, since it is more or less assumed that essentially everyone would rather a permanent job than a casual one.

These facts and concepts are readily available even to members of parliament.

https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/rp/rp1819/Quick_Guides/Underemployment

Are you seriously suggesting that a 40 year old unemployed factory dressmaker or a 50yo unemployed auto worker should just go and do a law degree and end up on the legal admission rolls? Your grasp on the realities of the working class is about as firm as a toddler's grasp on the soap in the bath. You are suffering from a common confusion about free market capitalism: while anyone can make their way up, not everyone can make their way up.

Public policy must be for everyone. That is why our country is called a commonwealth, and not, god forbid, a republic. That some people win the lottery does not make all their neighbours less poor. And for the genuinely poor, making their way up to partner in a Collins St law firm is only slightly more likely than winning the lottery.

I am not interested in those prospects, since after all we only need so many corporate lawyers. I am more interested that the poor have opportunities to do productive work. Formerly they had those opportunities, in recent years we have given those opportunities to China, instead. I think it is good to give foreign aid, but I would rather we gave them our cash than our jobs, and I think that since China is now the world's second-biggest economy (or biggest if the yuan were floated) they probably don't need any more help from us.

Our defence industries are owned by a French company. Our telecommunications by a Singaporean company. Even the port of Darwin is owned by a Chinese company. Our ore is being dug up and the profits from its sale going to Dutch and American companies. This is not of benefit to Australia or its citizens, or certainly not the working class. The middle class are doing well now with access to cheap casual labour and cheap foreign goods, but in time those finance and legal jobs will go overseas, too. The trade deficit cannot go on forever, the bills have to be paid. Once we have been drained dry those foreign companies will leave, and even the middle class will struggle.

The Liberal Party was created by a union of the Free Trade and Protectionist parties, so their thinking has always been muddled. The Labor Party can't even spell labour, so it is not a great surprise that from Whitlam on they tried to destroy the working class in favour of middle class lefties. I realise that the major parties like to be oblivious to this, but: a quarter of all Australian voters wanted neither major party. Both major parties had their primary vote decline since the last federal election.

Australia is declining because it has made its productive class less productive. This decline is being concealed by house price and debt inflation, but Wile E Coyote can only hang out in space for so long before dropping. Things will change. You can have gradual and managed change, or you can continue to stick your fingers in your ears and go "lah lah I can't hear you everyone is good!" and then get a sudden drop.

We made a big mistake in making our capital city in a valley in the middle of nowhere.

[deborah]

If you were right in saying that "those who lose productive work in a recession end up long-term unemployed", then the rates should have gone up and stayed up following the last recession. But they haven't.

I've seen plenty of figures that say the opposite, and certainly, my memories of the last recession agree with the figures I've seen in the past. I'd be interested in seeing your figures. I'll never forget interviewing a long term unemployed person who had had all the skills we wanted, and had done a marvelous job at one of our competitors. Before the interview we were going to offer him the job then and there, but he was a broken man who couldn't answer even the most basic question.

We made a big mistake in making our capital city in a valley in the middle of nowhere.

Unfortunately, for the past several governments, the capital city has been Sydney, since each Prime Minister has preferred to live there than to live in some other place, and each department has created high level offices there. This is becoming a huge problem, as the whole government is becoming NSW-centric.

[Kyle Schuant]

There's that, as PMs try to become Presidents. But I'm thinking more of - state parliaments tend to be a bit more responsive to the public because people can march on Parliament. They can quite literally besiege it peacefully if they really want to. And the nature of even a large state is that MPs are more likely to encounter their constituents and hear what they have to say - whether they like it or not.

Whereas nobody is going to take a week or two off work to march on federal parliament, plus they have a guarded back entrance anyway, and the fact of their having to fly back and forth from Canberra all the time gives them more opportunities to avoid talking to their constituents. Thus, federal parliament tends to be more oblivious and out of touch with the public.

This of course is mixed with the problem you mention, Deborah, of PMs trying to become Presidents with a house in Sydney. But whenever a federal government centralises it's going to focus itself on some particular part of its country. In the end Cabinet and Parliament meet in Canberra.

It would have been better had the capital been in some other city, or had it had a port (as explicitly avoided by the founders) so it could have something other than government there.

Unfortunately that's not going to change, all we can do is encourage devolution by the states. For example, we did once have our own state income taxes...

[Bloop Bloop]

If you were right in saying that "those who lose productive work in a recession end up long-term unemployed", then the rates should have gone up and stayed up following the last recession. But they haven't.

I've seen plenty of figures that say the opposite, and certainly, my memories of the last recession agree with the figures I've seen in the past. I'd be interested in seeing your figures.

Have a look at the data - it goes back to 1979:

https://www.ceicdata.com/en/indicator/australia/unemployment-rate

That is for unemployment.

For long-term unemployment, see Table 1 on this page:

https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/rp/rp1819/Quick_Guides/LTUnemployed

You will see there is no clear trend in long-term unemployment. There are spikes in male LTU after the early 90s and 2008 (recessions), but then the trend goes back to baseline. LTU is also lower now than it was 20 years ago, if you look at per capita figures rather than absolute figures (see Table 3).

In the meantime, feel free to post your research that shows that professional jobs are still limited mostly to men of European ancestry (more so than the natural demographics of the population). I think you will struggle to find any. Yes, 20 years ago this was problematic. Yes, there are still some issues with lack of Aboriginal and Asian representation. Otherwise, non-Anglo men and women have made great strides. I know this because I used to be on my old firm's diversity committee, since I am a "diverse" person.

So then if the decently paid, secure jobs are such bullshit e.g. Exec Assistant/Economist, it should be easy for people who currently do actual work to transition into a job which pays better and requires no real wrk.

History shows that those that lose their job from productive work in a recession end up long term unemployed, and a burden on the taxpayer.

Don't throw out ridiculous ideas without doing your research first.

See above. History doesn't show that at all.

More significantly for this discussion, the "employment" rate has remained steady, but the type of jobs has changed from permanent full-time to casual part-time. Having a full-time job, even a minimum wage one, is preferred by many people to having a part-time casual job. The auto worker who had a guaranteed 40hr and wage, overtime, sick and holiday pay, is now a (for example) cleaner who is given 5hr shifts so they don't have to give him meal breaks, he gets 4x 5hr shifts a week, they can be cancelled with 2 hours' notice and he gets nothing, and he has neither sick nor holiday pay. But he's still employed.

This is why there is the concept of underemployment, where the person is employed but would like more work - nobody collects statistics on who would like permanent employment vs casual, since it is more or less assumed that essentially everyone would rather a permanent job than a casual one.

This is correct. I agree with all of it.

Are you seriously suggesting that a 40 year old unemployed factory dressmaker or a 50yo unemployed auto worker should just go and do a law degree and end up on the legal admission rolls? Your grasp on the realities of the working class is about as firm as a toddler's grasp on the soap in the bath. You are suffering from a common confusion about free market capitalism: while anyone can make their way up, not everyone can make their way up.

I also agree with the above. But my point wasn't that everyone will in fact end up in a profession. It was that the opportunity exists for those with the skills, and that the influence of things like racism, sexism, etc is fast waning in our professions.

The reason a lot of displaced workers can't go into white collar occupations is because they lack the skills and education, not because there is a glass ceiling (for lack of a better phrase) that is based on something other than skill and endeavour.

As for the rest of your post, I agree that the middle salaried classes have benefited from offshoring and globalisation to the detriment of the working class. I've never argued otherwise. Whether one thinks that is a good thing or bad thing is up for debate. It might be that some of the middle class that benefited from early globalisation will not benefit from late stage globalisation (when their own jobs perhaps get outsourced). That is something that we might await with interest.

[middo]

The reason that long term unemployment increases during a recession is that people lose their low skill jobs.  The reason it subsequently drops later is not because they all find work, but a significant portion become so disabled by the psychological consequences of not working and not being able to work that they end up on disability pensions, and ultimately retired on government benefits.

This is not a positive process for the community.  Recessions are bad for the communities we live in.  If you want to live in gated communities away from the locals, emigrate to the middle east or similar.

[Bloop Bloop]

The reason that long term unemployment increases during a recession is that people lose their low skill jobs.  The reason it subsequently drops later is not because they all find work, but a significant portion become so disabled by the psychological consequences of not working and not being able to work that they end up on disability pensions, and ultimately retired on government benefits.

This is not a positive process for the community.  Recessions are bad for the communities we live in.  If you want to live in gated communities away from the locals, emigrate to the middle east or similar.

No, I'm afraid that's not true either. Our labour force participation rate is at a relative high. If your theory was correct, the labour force participation rate should have steadily dropped over time (to accommodate those who have given up).

https://www.ceicdata.com/en/indicator/australia/labour-force-participation-rate

In fact the employment to population ratio, and LFPR, have increased since 2000:

https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/BriefingBook45p/EmploymentAustralia

So, it's just not true.

The most you could honestly say, backed by figures, is that there has been a slight increase in precarious employment. But even then, since 2008, our Gini coefficient for income hasn't increased, so it's not like our overall incomes have become more unequal since the recession.

So, all your points are wrong.

[middo]

The reason that long term unemployment increases during a recession is that people lose their low skill jobs.  The reason it subsequently drops later is not because they all find work, but a significant portion become so disabled by the psychological consequences of not working and not being able to work that they end up on disability pensions, and ultimately retired on government benefits.

This is not a positive process for the community.  Recessions are bad for the communities we live in.  If you want to live in gated communities away from the locals, emigrate to the middle east or similar.

No, I'm afraid that's not true either. Our labour force participation rate is at a relative high. If your theory was correct, the labour force participation rate should have steadily dropped over time (to accommodate those who have given up).

https://www.ceicdata.com/en/indicator/australia/labour-force-participation-rate

In fact the employment to population ratio, and LFPR, have increased since 2000:

https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/BriefingBook45p/EmploymentAustralia

So, it's just not true.

The most you could honestly say, backed by figures, is that there has been a slight increase in precarious employment. But even then, since 2008, our Gini coefficient for income hasn't increased, so it's not like our overall incomes have become more unequal since the recession.

So, all your points are wrong.

I'll just answer the workforce participation data issue.

1. It is trending upwards.  That drops after recessions for a significant (5 years +) period.  Why? People give up looking for work.

2. Increases in work force participaition in Australia have more to do with women entering the workforce than anything else.  Young women expect to work now.

3. The on the ground experience from service providers backs up my point.

I can't be bothered arguing with you anymore.  You have a mindset that obviously is closed and only see what you want from the data and others arguments.

[Bloop Bloop]

The middo method:

1. Put out numbered points.

2. Selectively respond to others' points ("I'll just answer the workforce participation issue") when others have done you the favour of responding to all of yours.

3. Put out counter-points not backed by data.

4. Give up and claim bad faith.

Mod Note: If you want to say another poster is arguing in bad faith, explain why, and discuss. Directly attacking them as a straw man is rude, and doesn't prove your point. Please stop.

[deborah]

I think Middo has made the right call.

[Bloop Bloop]

This is not a positive process for the community.  Recessions are bad for the communities we live in.  If you want to live in gated communities away from the locals, emigrate to the middle east or similar.

I forgot to mention also that this statement unfortunately puts up a straw man. I've never said I want to live in a gated community a la South Africa. I do think our current Gini of about 0.33 is well within the tolerable zone and a little increase in inequality (which, to be fair, hasn't even happened since 2008) wouldn't hurt our civic bonds too much. It's not like there are two alternatives: egalitarian Australia with a Gini of 0.25 and terrible America/South Africa with a Gini of 0.44. There's a lot of room in the middle.

[Kyle Schuant]

It's fun to talk about this stuff abstractly, especially if you're one of the ones who's doing well in this system. It becomes less fun once you get down to details and look at individual people. Read the article, watch the vid. Consider, for fifteen minutes or so, the human cost of your abstractions.

https://www.sbs.com.au/news/the-feed/the-government-claimed-this-woman-s-tax-return-now-she-s-taking-them-to-court?cx_cid=edm:newsam:2019

[mjr]

Unfortunately, for the past several governments, the capital city has been Sydney, since each Prime Minister has preferred to live there than to live in some other place, and each department has created high level offices there. This is becoming a huge problem, as the whole government is becoming NSW-centric.

By this argument, the Federal Government having all its departments in Canberra makes it very Canberra-centric, which it arguably is.  If I had to choose, I'd choose NSW-centric every time.

[mjr]

Recessions are painful and best avoided, but not avoided at all costs.  It'd be nice if economies didn't move in cycles, but they do.  When downturns happen as they invariably must, recessions clean out excess inventories, poorly performing business, reset people's consumption and savings habits and shake things up.

Rudd and Swan get ZERO kudos from me for "avoiding the GFC recession".  We didn't have a banking crisis.  They just gave away money and sent us miles into debt.  If a government borrows and injects enough money into consumer spending, sure you can avoid a technical recession.  You send the population into debt to get none of the "positive" effects of the recession and make the resulting hangover last much longer than the recession would have.

[marty998]

Recessions are painful and best avoided, but not avoided at all costs.  It'd be nice if economies didn't move in cycles, but they do.  When downturns happen as they invariably must, recessions clean out excess inventories, poorly performing business, reset people's consumption and savings habits and shake things up.

Rudd and Swan get ZERO kudos from me for "avoiding the GFC recession".  We didn't have a banking crisis.  They just gave away money and sent us miles into debt.  If a government borrows and injects enough money into consumer spending, sure you can avoid a technical recession.  You send the population into debt to get none of the "positive" effects of the recession and make the resulting hangover last much longer than the recession would have.

You really have no idea how close the entire Australian financial system came to collapse do you? We did have a banking crisis. St George and Bankwest both would have gone tits up without being taken over by Westpac and CBA.

On the national debt... the Rudd/Swan stimulus package accounts for a very small proportion of the national debt levels. The bulk of it stems from the 2007 income tax cuts (which were first announced by Costello in the 2007 budget, and then matched by Swan prior to the 2007 election), and a collapse in corporate tax receipts (which basically indicates there was a recession, just not a conventional one) which saw tax receipts collapse from ~25% of GDP to 21% where they stayed for much of the next 6 years. Expenses stayed around ~25% of GDP, and the 4% gap is was the annual deficit (some ~$50 billion at the time).

Now I agree the Rudd/Gillard government should have taken more steps to manage and reduce that deficit, and they are at fault for that, but you can't fault them for trying and succeeding in avoiding what would have seen millions of people unemployed.

You cannot expect a government to just "let" a recession happen. Voters would consign that party to opposition for the next 100 years.

Be honest - would you vote for ScoMo if he could foresee a catastrophe and still drive the bus off the cliff? No. Of course not.

[mjr]

I disagree.

St George weathered the credit crunch pretty well.  Well enough that there were talks before the merger closed that maybe it wasn't in the best interest of its shareholders as it was doing OK by itself.

Bankwest, I don't know.  Even if it was in drama, that's exactly my point.  It was bought out and became stronger.

The Federal Government didn't do squat about this anyway.   Yes, they put the ADI guarantee in place, which didn't cost a cent.

Your question about would I vote for ScoMo is too nuanced to answer.  Depends who else was running and what their policies were.  Depends on what policies were put in place to stop/mitigate the recession.  Note that I said recessions are painful and best avoided.  By good policies.  Not at any cost.

The public doesn't always support what's best for them.  Campbell Newman had his arse handed to him after 1 term for doing the right thing and now Qld is deep in debt doo-doo.  Yes, I did vote for Campbell.  I'd do it again, too.

[Bloop Bloop]

I think the Coalition tax plan is likely to pass. Once tax reform passes, it's quite difficult to repeal. I think if it passes now, Labor will be hesitant to take a repeal to the 2022 election. Anyone agree/disagree?

[middo]

I don't know if it will all pass, but definitely very difficult to go to the election with a policy of undoing the changes.  It would require convincing the electorate that a fairer tax system is something they should vote for - and the electorate has already shown us that a fear campaign will beat a fairness argument everytime.

Labor will go to the next election with a small target and no real policies, and a popular leader, using scare tactics.  That's my guess. 

[deborah]

It's easier to pick on the rich than the oldies (after all, they vote, and young people don't), so if there's going to be a recession, it could easily be repealed. What is more likely to happen is that the tax break will be withheld (like the 12% superannuation increase...) until things are better, or a levy that's the same as the tax break will be put in place for the duration.

[Kyle Schuant]

and the electorate has already shown us that a fear campaign will beat a fairness argument everytime.

Not necessarily. In the hands of someone more charismatic with a group of people better at communicating than Shorten et al, it might not be so.

Labor will go to the next election with a small target and no real policies, and a popular leader, using scare tactics.  That's my guess. 

If they do that, assuming nothing else has changed, they'll lose again. As both major parties become more defensive and reserved, their primary vote declines. When the major parties become indistinguishable, voters choose "neither of the above." Thus growing votes for Greens, PHON, and whichever other bunch of clowns appear in that particular election (UAP here one day gone the next).

[marty998]

It won't be repealed. No tax cut ever has been repealed in living memory.

If Taxes need to be raised the precedent has been set - it will be called a temporary deficit levy or whatever. But there will not be an increase to the marginal tax rates as published.

This is fair, even with sluggish wage growth, bracket creep demands that the tax cuts should occur.

I half expect the Treasury coffers to overflow over the next six to nine months, as all those people who sold investment properties at the top of the boom lodge their tax returns. Some of that tax won't be payable until May next year but it will come in.

With interest rates sinking ever lower it's also more and more "difficult" to negatively gear property - I will definitely cop some extra tax next year when I refinance my loans, because I'll be saving some $4000 a year in interest as compared to this year.

Josh Frydenberg also has the tailwind of a huge increase in company tax receipts from BHP, RIO, Fortescue and other miners, as well as a generally booming stockmarket to add further to CGT receipts from high marginal rate tax payers.

Labor should just get out of the way and pass the cuts. If Labor can't find some money/savings within $500 billion of annual expenditure to fund their priorities and redirect money from elsewhere, instead of raising taxes on everyone, then they don't deserve to ever be in Government.

[deborah]

You’re right.

[alsoknownasDean]

I was reading the other day that the Coalition needed the support of four of the six non-Greens crossbench senators to pass the cuts.

I wonder what they would expect from the Coalition in return for passing the cuts. It might be that the ALP would rather pass the cuts proposed by the Coalition than deal with whatever Hanson et al would require for their passage without Labor's vote.

[Kyle Schuant]

As the Family First guy Fielding learned, just because the govt promises you something in exchange for your vote does not mean you'll ever get it.

It's like Clive Palmer learned. He kept bribing politicians to get his projects approved, then he paid a bribe and they didn't give him what he wanted! Politicians are an unreliable bunch, they won't even stay bribed. So he decided to cut out the middleman and get into parliament himself. He just found it all a bit much hard work and didn't show up to parliament much.

They can promise PHON all sorts of things, behind doors and not in writing. Whether PHON actually gets those things is another matter. After all, what's Hanson's alternative, siding with the ALP and Greens?

[mrmoonymartian]

After all, what's Hanson's alternative, siding with the ALP and Greens?

For all we know she could sit in a corner of the senate with burka'd arms crossed until they agree to invade France with an army of yellow-vested kangaroos weilding vegemite baguettes... regardless of whether there is any chance of getting such an agreement. Irrational obstinance could be seen as rational in terms of energising the support base in defiance of so-called 'rationality' perpetuated by the vegemite-hating elite establishment.

[Bloop Bloop]

Hanson wants lower taxes for herself. She will cave on that basis alone.

[Bloop Bloop]

https://www.theage.com.au/politics/federal/labor-wants-more-australians-to-be-on-a-good-wicket-20190623-p520ev.html

Well this is very encouraging from Labor. They have finally acknowledged that those on the lower fringes of the top tax bracket (i.e. between 2x-2.5x average full-time wage) are not 'the top end of town', but rather part of middle Australia, where most of us are happy to belong. I think that's the first step to getting rid of the divisive politics of envy which infested their old campaign.

I think the top end of town are the big companies, the multinationals, the oil tycoons, those on 7 figures a year, sports people who live in Monaco or Bermuda, the multi-generational rich. We should step up anti-avoidance measures, force anyone with Australian citizenship to pay income on worldwide earnings, and start hitting the transfer of intergenerational wealth.

What we shouldn't do is penalise the slightly above-average by making them pay a 47% - 49% rate of marginal tax! Glad to see Labor finally coming on board.

[Kyle Schuant]

That's The Age. They're the ones who put up sympathetic articles about households on $350k or more who can't get childcare subsidies.

It's like numpties like Israel Folau - someone who has benefited greatly from Australia's open and accepting culture is himself not open and accepting. Everyone believes in a progressive taxation system - they just believe the progression of the tax should start in the bracket just above them.

We're well-off, Bloop. We should pay our share.

[mjr]

The Age is as about left wing as they come.

I don't believe in a progressive taxation system - it's pure theft.  A proportional taxation system is fair enough, it still results in people who earn more paying more tax.  One rule for everyone.

Folau ?  I don't care about Folau, Rugby Australia or bible bashers.  I do note 2 things, however.  1) Folau quoted a line from the bible, saying the sin is bad, he made no mention of the not being open or accepting of the sinners.  2)  His quote was "drunks, homosexuals, adulterers, liars, fornicators, thieves, atheists and idolaters" - only one of those labels has caused all the hoo-ha.  Why is that, exactly ?