Wayne Swan

Rudd knifes Gillard, early election for Australia

Labor have shown just how dysfunctional they are with the overnight knifing of Julia Gillard buy Kevin Rudd.

The illegitimate government just became even more illegitimate.

Kevin Rudd has been re-elected leader of the Labor Party almost three years to the day since he was deposed by Julia Gillard.

Mr Rudd won the ballot 57 votes to 45. There was no spill for position of deputy leader however there are reports that Treasurer Wayne Swan has resigned.

Labor is in disarray. The caucus is deeply divided. Most of their money men have been indicted for corruption, the power brokers too, the ones left are quaking in their boots that other skeletons won;t come out, but in all likelihood they will.

Labor is stuffed for at least 3 probably 4 terms nationwide.  The effects could well last for a generation.  Read more »

Apparently Rudd gives the ALP a 50/50 chance

The ALP is going down hard but there s a school of thought that suggests that a quick change back to the narcissistic Kevin Rudd may jut save some them…or if polls are to believed put them back in the hunt.

KEVIN Rudd’s resurrection as Prime Minister would lift the Labor Party back into a 50-50 fighting chance against Tony Abbott at the election.

But voters have urged Julia Gillard not to hand the job to him on a platter – rejecting Labor MPs’ calls for her to resign to make way for Mr Rudd.

An exclusive Galaxy poll for The Sunday Telegraph has revealed Mr Rudd would deliver a six-point lift in the Labor Party’s primary vote, saving up to 18 seats in NSW, Queensland, WA, Victoria and the Northern Territory including Treasurer Wayne Swan’s Brisbane electorate of Lilley.  Read more »

Will Rudd be last man standing?

In terms of polling disasters you can’t get much worse than what is facing the ALP., where leaked polling data shows that a bloodbath is imminent and Kevin Rudd might be the last little vegemite left standing.

Deputy Prime Minister Wayne Swan looks set to lose his Brisbane seat of Lilley, with internal polling suggesting Labor will struggle to retain any Queensland seats at the September 14 federal election.

In a result even worse than the 1996 ”baseball bats” election, when Labor was reduced to two of the then 26 seats in Queensland, Labor may retain only one MP – former prime minister Kevin Rudd.

The Queensland polling, taken in recent weeks in Mr Swan’s seat of Lilley, is believed to show Mr Swan’s primary vote has collapsed to just 28 per cent, compared with 41 per cent at the last election.

Mr Swan has held the seat since 1998, although at the last election his margin narrowed from 8 per cent to 3.2 per cent, with a 10 per cent fall in his primary vote.

NZ’s budget vs Australia’s budget

The Australian Financial Review (subscriber content) has passed comment on the state of the NZ economy and recent budget compared with Australia.

Like all established media, the Financial Review has to cut costs. The Sydney subs desk, traditionally part of the fabric of the newsroom, has been shut and articles such as this are now subbed by a Fairfax Media team in Auckland.

While still getting up to speed, the Kiwi team is well drilled, eager and costs a lot less than if hired under Australian pay rates and dollar. Such supply chain changes are happening across the Tasman also with call centres and information technology, driven by 40 per cent or so cost differences.

The flip side of Australia’s high cost base is its relative prosperity. Over the past two centuries, Aussies have rarely been this much more prosperous than Kiwis, thanks to the mother of all resources booms in Western Australia and Queensland.

Yet a side trip to Wellington confirmed that this trans-Tasman disparity has likely peaked. Australia’s resources boom luck is ending and we’re about to pay for its mismanagement. While New Zealand’s bad luck is about to turn for the better, it also will reap the benefits of its more disciplined policy-making.

Australia enjoyed a minerals boom, we endure the Green party spiking any such development.

New Zealand didn’t have a mining boom to shield it from a global financial crisis recession. The February 2011, the Christchurch earthquake flattened much of the country’s second biggest city. Then came a drought. Elected in late 2008 at the start of this bad luck, John Key’s National government also had to deal with the legacy of nearly a decade of a back-sliding and big spending Labour government.

Key and Finance Minister Bill English let the budget cushion the early bad luck. The deficit blew out to more than 9 per cent of gross domestic product.

The government faced a dreadful set of circumstances when they took office.

Yet, while Wayne Swan’s sixth budget left Australia exiting its mining boom with a fiscal mess, English’s fifth budget a few days later confirmed that New Zealand will be back in surplus in a couple of years. Based on spending restraint, there’s been none of Swan’s shameless accounting trickery. And English has delivered genuine tax reform: a 15 per cent GST, a 33 per cent top marginal income tax rate and a 28 per cent corporate rate.

New Zealand is now likely to grow just as fast as Australia over the next few years. While Australia faces an income crunch, the NZ Treasury forecasts that Kiwi household incomes will rise nearly 20 per cent over the next four years.

What also immediately stands out is Wellington’s grown-up and stable government, even a minority one enforced by New Zealand’s proportional electoral system. There is none of the political madness, dysfunction and class warfare rhetoric that has come from Rudd-Gillard Labor over the past six years.

A former investment banker and a former South Island farmer, respectively, Key and English are more substantial and less tribal than Julia Gillard and Swan. They stress business-friendly growth and dismiss the idea that more government spending means better public services.

It is a model that Tony Abbott, himself the husband of a New Zealander, would be advised to follow. English draws a clear distinction between the crash-through New Zealand reform era of Labour finance minister Roger Douglas and National successor Ruth Richardson. That was followed by nearly two decades of policy drift and retreat under governments of both stripes. Now it’s all about incremental but continual policy reform that cannot so easily be later undone.

Politically, it’s working. Halfway through their second term, the polls give Key’s Nationals 49.1 per cent of the vote, compared to 43.1 per cent for Labour and the Greens. Fifty nine per cent of New Zealanders think the country is heading in the right direction.

It sounds like the Aussies are a wee bit jealous of the state of our economy.

And now the luck. While Australia’s mining boom has been based on China’s infrastructure spurt, New Zealand is at the start of a massive dairy boom driven by middle class Chinese demand for protein. New Zealand excels at turning water into powdered milk protein. Australia’s terms of trade are now sliding from 140-year highs. But, as New Zealand’s terms of trade rise, it faces a challenge well known this side of the ditch: a strengthening exchange rate.

Sledge of the Day

Alan Jones on Joe Hockey about his stomach stapling:

He embarrassed Hockey over his recent weight loss, due to stomach stapling surgery, and said he hoped the doctors hadn’t taken his spine out during the operation.

There were plenty more sledges of Joe Hockey, who is likely to be Australia’s next Treasurer.

It began happily enough. Jones announced Hockey as ”the next treasurer of Australia”.

Jones did annotate this introduction with “the one left with the mess”, but still, any anointment from Jones is not to be lightly dismissed.

This is the man Hockey once called “the greatest broadcaster of all time”. Furthermore, it was the day after Treasurer Wayne Swan had brought down his sixth budget, and his sixth deficit. Barring an apocalyptic science fiction-esque event that results in a giant lizard demolishing Parliament House in a single swipe of its reptilian tail, it will also be Swan’s final budget.  Read more »

An Aussie perspective on NZ

The left wing here likes to bag New Zealand, but how do the Aussies see us…well, a little differently than you would imagine.

Larry Pickering makes some astute observations as Australia heads into election season.

New Zealand was on the brink of recession prior to the Conservative government of John Key taking the reins in 2008. This small economy of 4.4 million people is now preparing for a series of record surpluses… and without the help of a mining industry.

Helen Clarke’s [sic] Labour Government left the country facing severe recession with a bloated Public Service sector and disastrous losses due to her takeover of the NZ rail system.

Abbott could do worse than take a look across the Tasman when attempting to repair the damage left by the union government of Julia Gillard and the incompetency of Kevin Rudd.

Are unions really the problem? They seem to be in Australia, having never really really dealt with them like we did in the 90s.  Read more »

The Lucky Country? Not any more

Helen Clark’s government forecast a decade of deficits…National arrested that. In Australia Julia Gillard is similarly facing a decade of deficits despite promising many times to balance the books. Predictably the Liberals have attacked.

Australia faces a decade of budget deficits with the annual total set to pass $60 billion in 2023 unless governments take tough action to “share the pain”, an expert panel has warned.

The Grattan Institute’s assessment comes as Treasurer Wayne Swan confirms the budget has taken a $7.5 billion hit since the midyear update in October.

He told the ABC from Washington: “We have seen the terms of trade come down but the dollar didn’t move. That’s caused a hit, if you like a sledgehammer, to revenues in the budget since the midyear update of something like $7.5 billion. And of course the impact won’t just be in this financial year. It will also be across the forward estimates.”

The institute says that while notionally on track to surplus now, the combined state and federal budget deficits should reach 4 per cent of gross domestic product by 2023, which is about $60 billion in today’s dollars and would be about $100 billion in 10 years’ time.

Labour’s leadership woes – Guest Post

What a shambles.  What a disgrace.

Labour’s circular firing squad reveals many things about the state of that party.  Firstly it reveals a lack of character on the part of its leader, a man incapable of leading by example, by stature, or by design.  Secondly it reveals a lack of cohesion between the caucus and its wider constituent bodies.  Thirdly it reveals the jealousies that exist at all levels of the party.

Shearer’s ritual dismissal of Cunliffe is not a new strategy.  Shearer and his lieutenants Trevor Mallard and David Parker have taken a leaf out of Julia Gillard’s book.  When faced with destabilisation from Kevin Rudd, Gillard wheeled out her caucus surrogates to denounce Rudd as a demagogue unfit to lead his party or his country.  Whereas Gillard had Wayne Swan, Simon Crean and Nicola Roxon, Shearer had Hipkins and Faafoi front the media to denounce Cunliffe as a destabilising force within the caucus.

Next Shearer demanded endorsement at the point of a gun, no debate, no dissent.  Having achieved ‘unanimous’ endorsement from his colleague, Shearer then dismissed Cunliffe to the back bench.  In effect Cunliffe is now the excuse for low opinion polls, a man who is to serve as toilet paper for Shearer’s failed leadership, languishing at the bottom of the Labour Party’s political long-drop.

The problem with this scenario however is Cunliffe alone is not to blame.  Labour has yet to move to a level of political support it realised when it lost office in 2008.  This is extraordinary.  Students of history will know Bill Rowling lost the 1975 election, but outpolled Robert Muldoon in 1978.  Mike Moore led Labour to a landslide defeat in 1990, but he came within one seat of winning in 1993.

Shearer leads a party approaching its fifth year in opposition and he shows no sign of leading a recovery.  Relying of a coalition of friends based on Russel Norman and Hone Harawira is a declaration of defeat, the conclusion of a failure of leadership that he Shearer’s responsibility and Shearer’s alone.

The leader of the Labour Party is incompetent, mangles his words, struggles with basic policy concepts, and has little or no feel for human behaviour.  How does he expect his diminishing band of party members to raise money and knock on doors when he has just thrown their preferred candidate for leader under the wheel of a bus?

And Shearer need not think his so-called KiwiBuild policy will make a blind bit of difference.  Communism-meets-lotto housing based on cheap homes situated on cheap land around train stations is hardly going to motivated 200,000 mortgage-paying voters to switch their party vote from National to Labour.

Cunliffe is no better off today than he was last week.  Yes he has been demoted off the front bench, but in a caucus of 34 led by David Shearer, it was never likely that Cunliffe was going to feature in a government any time soon.  Once Shearer accommodates Norman, Turei, Harawira, Sue Bradford, and a mandatory quota of feminist unionists and others from the Rainbow sector, what role would a white heterosexual male possibly have in a future Labour-led government?

However Cunliffe alone deserves the odium that he is coping.  A weak-kneed to Shearer’s ultimatum is a disappointing end.  Yes, Cunliffe should not have hedged at the weekend conference; the smart thing would have been to publicly endorse Shearer there and then.  But having been called on to front up, Cunliffe should have done just that and tested the resolve of the Labour caucus.  Having lost, he could have then resigned and moved to the back bench rather than being dumped by a political featherweight.

Cunliffe has been unwise to rely upon the likes of Charles Chauvel, Moana Mackey and Louisa Wall.  None of his core supporters represent the aspirations of mortgageville New Zealand, and none of them were likely to have the fortitude to go through the fire on behalf of their candidate.

Cunliffe is a vain and flawed man, and someone who is deserves to be disliked by his colleagues.  But Shearer is ten times worse, a leader who seeks strategic direction from Trevor Mallard.

Well might Labour members throw up their hands in horror.  As John Key rightly points out, how can they run the country if they can’t even run a conference?

The correct response now is for Labour’s rank and file to force all MPs to face selection contests.  A contest of ideas is the only way to force its caucus to align with the party that carries it.

Oops…there’s a hole in my budget

Wayne Swan faces a great big problem of his own making…a ginormous hole in his budget:

Revelations today that not a single cent of mining tax was paid in the first three months of this financial year indicate the $1.1 billion surplus forecast on Monday may be gone already.

The mid-year budget update estimated that due to falling commodity prices, primarily a result of declining demand from China, the revenue from the minerals resource rent tax would be downgraded from $13.4 billion to $9.1 billion over its first four years of operation.

This financial year, the MRRT revenue was downgraded from $3 billion to $2 billion. Now that appears ambitious at best.

You might not think that is a big problem but it is…because just like here the government has booked and allocated spending based on that revenue. Working for Families was implemented by Labour when they were claiming that budget surplus’ were structural. When National came in the Global Financial Crisis wiped out those surplus’ but the spending remained.

The mining tax is pegged to profits and commodity prices and if the latter is down, so is the former.

Regardless of this formula, claiming vindication today will be people such as Andrew ”Twiggy” Forrest, who claimed from the outset that the big miners — BHP, Rio Tinto and Xstrata — swindled the government when they renegotiated the mining tax after Kevin Rudd was ousted by being able to deduct the market value of their operations from their mining tax liability.

The crisis of the tax making little or no money will be exacerbated by several factors.

First, the government has already spent the budgeted proceeds on cash handouts for low and middle-income families, tax breaks for small business and increased superannuation contributions. It was to fund a company tax cut but the government junked that promise at the May budget because the Coalition and the Greens would not pass the legislation for a company tax cut.

Second, the government is still committed to refunding all future state royalty increases because the renegotiated MRRT had a massive loophole promising to refund the miners for all current and future royalty increases imposed by the states.

Unless the government makes good its threat to punish the states, which continue to increase royalties by withholding other forms of revenue, it faces further budget pressure.

Third, the government is bound to come under pressure from the Greens and independents to go back to Parliament and toughen up the legislation. At the very least, the Greens are stepping up claims this morning to close the royalties loophole.

Labor is already hated in the state after taking a bath in every state election. by punishing them further as a result of the budget hole Swan risk consigning Labor to the scrap heap in an electoral bloodbath.

Gillard is under pressure on many fronts by sticking up for dodgy ministers and former unionists, but now having a massive hole int eh budget to contend with things are looking dicey.

Julia Gillard is a big girl’s blouse

Julia Gillard and her supporters like Anne Summers are acting like big girl’s blouses:

I agree with Summers it is ”terrible” to call the Prime Minister a liar. However, when I asked her if she had expressed such a view when Howard was called a liar, she declined to answer the question. Summers also takes offence that, on occasions, Gillard is referred to as ”she” or ”her” and maintains that ”previous prime ministers were accorded the basic respect of being referred to by their last names”.

This is manifestly not so. Moreover, last Thursday Gillard used the words ”he” and ”he’s” in one sentence when referring to Abbott.

This is normal conversation.

It seems that Summers’s evident sensitivity has had an impact on Gillard. Last Tuesday, the Prime Minister complained that Abbott was ”now looking at his watch because, apparently, a woman has spoken for too long”. In the 1992 US presidential campaign, George H.W. Bush was criticised for looking at his watch when debating Bill Clinton. This is not a gender specific act. Nor is being told to shut up. Nor is being called a ”piece of work”. Last year I was called a ”piece of work” by the Sydney University academic Simon Chapman. It took me a full eight seconds to recover.

The problem with such over-readiness to take offence is that it can lead to setting impossible standards. Last Tuesday, Gillard stated Liberal parliamentary members who were present when Alan Jones made an offensive comment about her late father should have either left the room or walked up to Jones ”and said this was not acceptable”. Yet neither Wayne Swan nor Tanya Plibersek took either course of action last Wednesday when a comedian at a trade union function they attended made an indefensible reference to a senior female Coalition staffer.