OT: Current Affairs and Politics

[Poupou Escobar]

Well the point is it doesn't matter. Their business is selling loans not houses.

 

[Barry O'Speedwagon]

what ethics

They definitely suck, but there's also a lot of willfully ignorant or just dishonest merkins out there who take risks they can't really afford and are very quick to blame others when they draw the short straw.

 

[TheRam]

 

[TheRam]

 

[TheRam]

 

[Poupou Escobar]

Money needs to be created to reflect the increase in value of things. Value increases because demand outstrips supply. Just because you can't touch them doesn't mean they're not real.

 

[Hollywood Jesus]

Honestly mate, there is just so much here that is just plain wrong it's difficult to know where to begin.

Without going into a ramble as, I'll make a few points

Your assumption that migrants are predominantly low skilled / low paid is incorrect and takes no account of those that come here and create employment ( yes they actually do ).

Like I said, I don't have the data on that. Happy to look at it if anyone does, but here's an old article from the ABC that runs the same argument:

https://www.abc.net.au/news/2017-12-22/wages-stall-as-population-soars/9281552

And here's one from the other side of the aisle, Business Insider:

https://www.businessinsider.com.au/...gration-wage-growth-rba-interest-rates-2018-8

Both saying basically the same thing - an immigration level that is very high for OECD standards is meaning high labour supply is keeping wages low and tempering inflation. There's jobs being created, sure, but there's a higher number of workers being brought into the country at the same time, so there's no pressure on the labour market.

I know my last post was a bit of a rant (sorry) but that was pretty much the message.

With the latest unemployment figures whilst employment dropped, so did the participation rate

So, shouldn't unemployment have gone down, then? 66.1*0.052 = 3.4372, whereas 66.0*0.053 = 3.498 (plus the 0.1% that stopped participating = 3.5033).

It went up because unemployment actually went up. It just went up less because the participation rate decreased, as well - 66.0*0.052 = 3.432.

And we don't need a surplus, historically there's been like about 17 ( can't remember the exact figure ) since federation. Surplus' are for when the government wishes to take money out of the economy, that's hardly what's needed in a downturn.

Should have clarified that one, a bit. Yes, there's an economic reason for a surplus, but there's also a very big political reason.

Try telling the government to run a deficit and see what their reply is.

And, like I said, there are strong economic reason for a surplus, when you can run one. And by using the immigration economic lever, you can try one more (quite influential) thing before having to resort to a deficit. Yes, run a deficit if you have to - but only if you have to (these days).

***

Sorry, dude, but my economic argument is prettysound - high labour availability favours employers and keeps wages down. That leads to other negative economic impacts - low inflation, which sees the cash rate drop. And our very high immigration rate is keeping that labour availability there to keep pressure off wages.

 

[Gary Gutful]

We should be investing in more infrastructure that creates jobs and stimulates the economy rather than worrying about a surplus. Its become a 'thing' that supposedly measures the success of Governments but I could think of far better metrics.

 

[Gary Gutful]

They definitely suck, but there's also a lot of willfully ignorant or just dishonest merkins out there who take risks they can't really afford and are very quick to blame others when they draw the short straw.

Its your fault that I support Parra.

 

[Twizzle]

We should be investing in more infrastructure that creates jobs and stimulates the economy rather than worrying about a surplus. Its become a 'thing' that supposedly measures the success of Governments but I could think of far better metrics.

gee that sounds familiar

 

[Bandwagon]

Like I said, I don't have the data on that. Happy to look at it if anyone does, but here's an old article from the ABC that runs the same argument:

https://www.abc.net.au/news/2017-12-22/wages-stall-as-population-soars/9281552

And here's one from the other side of the aisle, Business Insider:

https://www.businessinsider.com.au/...gration-wage-growth-rba-interest-rates-2018-8

Both saying basically the same thing - an immigration level that is very high for OECD standards is meaning high labour supply is keeping wages low and tempering inflation. There's jobs being created, sure, but there's a higher number of workers being brought into the country at the same time, so there's no pressure on the labour market.

I know my last post was a bit of a rant (sorry) but that was pretty much the message.

The difference between what both those articles have to say, and the case you were making is that it is the skilled migration program that is creating an oversupply. ( not immigrants displacing low skilled workers )There are two main parts to this, one is temporary, the other permanent.

It's the temporary class that can be most problematic with oversupply, as it's set to address potential shortages within specific occupations or industries, and it's easier to manipulate , or simply get wrong. I should clarify here that whilst this is migration, I don't see it as being immigration ( the definition of which I see as being either long term or permanent ). So the problem from my point of view is that these migrants, by the very nature of their visa, can not directly create employment. So whilst they can create employment through creating economic benefit, they are net job takers.

So, shouldn't unemployment have gone down, then? 66.1*0.052 = 3.4372, whereas 66.0*0.053 = 3.498 (plus the 0.1% that stopped participating = 3.5033).

It went up because unemployment actually went up. It just went up less because the participation rate decreased, as well - 66.0*0.052 = 3.432.

The point I make there is that the "labour pool" shrunk. There's really no getting around that.

Should have clarified that one, a bit. Yes, there's an economic reason for a surplus, but there's also a very big political reason.

Try telling the government to run a deficit and see what their reply is.

That the government ( and past governments ) have sold the Austrlian public that a surplus is the epitome of economic management and is thus pinning it's political fortunes to the idea of a surplus and hanging on to that like grim death, in the face of the reality that tighter fiscal policy will only serve to be a drag on the economy, is hardly an economic argument for a surplus.

And, like I said, there are strong economic reason for a surplus, when you can run one. And by using the immigration economic lever, you can try one more (quite influential) thing before having to resort to a deficit. Yes, run a deficit if you have to - but only if you have to (these days).

The only "strong economic reason" for a surplus is to cool the economy ( or prevent it from overheating ) Every other reason we are told is purely political nonsense. Fiscal policy is either expansionary ( the government spends more than it taxes ) or contractionary ( the government taxes more than it spends. A surplus by nature is contractionary, because it means the government has taxed more than it has spent. Why would anyone want contractionary fiscal policy in an economy where growth and inflation are problematically low?

Sorry, dude, but my economic argument is prettysound - high labour availability favours employers and keeps wages down. That leads to other negative economic impacts - low inflation, which sees the cash rate drop. And our very high immigration rate is keeping that labour availability there to keep pressure off wages.

I'm sure you think it is, for mine it's overly simplistic, based upon some flawed assumptions, and ignores where some of the real problems lie.

 

[Hollywood Jesus]

I'm sure you think it is, for mine it's overly simplistic, based upon some flawed assumptions, and ignores where some of the real problems lie.

Oh, there's plenty of real problems - on that we both agree. I do not seek to deny that.

However, a high immigration rate during times of rising unemployment is one of them and there's no doubt about that.

Will it solve world hunger to drop immigration? No.

Will it reduce the size of the labour pool, drop unemployment and put upwards pressure on wage growth? Yes.

Will that lead to a rise in inflation and some relief in terms of a rising cash rate? Eventually, yes.

Will that then lead to a heating economy? Eventually, yes.

Will that then lead to an increasing immigration rate to boost the labour pool and balance things out? Yes.

So, will it be temporary? Yes.

Does other stuff need to be done? Yes.

Infrastructure has been mentioned and that's obviously beneficial, but there is also a limit to what you can do there. I could be wrong on this, but...I have a feeling that both NSW and Qld have said they're kind of around their peak when it comes to how much infrastructure they can build at any given point in time, so not sure if there is scope to add work there to create jobs or benefits.

For example, NSW has WestConnex still going, it has the airport, it has light and metro rails, it has the Northern Rd, it has the M12...and that's just in Sydney. We could do some looooooooong overdue work on the northern highways (New England and Pacific), but what other major projects are there?

Off the top of my head, I guess we could do the high speed rail from Brisbane to Melbourne. To be honest, I am personally unsure about the cost of that or the return on it, so I don't know whether it is good or bad, but it gets talked about a lot. If the return is good then it's worth borrowing for.

I'm just not sure what other projects there are that would be worth it - but I'll be honest and say that this is largely due to my own ignorance in this space and I'm not inferring that there isn't anything worth doing. I just don't know enough to answer that question, so I can't endorse a generalised "Just build infrastructure" argument.

 

[Bandwagon]

Oh, there's plenty of real problems - on that we both agree. I do not seek to deny that.

However, a high immigration rate during times of rising unemployment is one of them and there's no doubt about that.

Will it solve world hunger to drop immigration? No.

Will it reduce the size of the labour pool, drop unemployment and put upwards pressure on wage growth? Yes.

Will that lead to a rise in inflation and some relief in terms of a rising cash rate? Eventually, yes.

Will that then lead to a heating economy? Eventually, yes.

Will that then lead to an increasing immigration rate to boost the labour pool and balance things out? Yes.

So, will it be temporary? Yes.

Does other stuff need to be done? Yes.

Infrastructure has been mentioned and that's obviously beneficial, but there is also a limit to what you can do there. I could be wrong on this, but...I have a feeling that both NSW and Qld have said they're kind of around their peak when it comes to how much infrastructure they can build at any given point in time, so not sure if there is scope to add work there to create jobs or benefits.

For example, NSW has WestConnex still going, it has the airport, it has light and metro rails, it has the Northern Rd, it has the M12...and that's just in Sydney. We could do some looooooooong overdue work on the northern highways (New England and Pacific), but what other major projects are there?

Off the top of my head, I guess we could do the high speed rail from Brisbane to Melbourne. To be honest, I am personally unsure about the cost of that or the return on it, so I don't know whether it is good or bad, but it gets talked about a lot. If the return is good then it's worth borrowing for.

I'm just not sure what other projects there are that would be worth it - but I'll be honest and say that this is largely due to my own ignorance in this space and I'm not inferring that there isn't anything worth doing. I just don't know enough to answer that question, so I can't endorse a generalised "Just build infrastructure" argument.

In terms of infrastructure, it's worth noting that building is really coming off the boil, so there is a lot of spare capacity to come on line there.

As for major projects, I'm in the same position, I don't know how much there is that is "shovel ready", stuff like the high speed train would be years before a sod is turned, so that kind of project whilst likely worthwhile is too far off for it to make any meaningful contribution right now.

Mind you there's always more to do than big fancy headline projects. Plenty of smaller stuff can be done like road upgrades, parks, community facilities, even public housing just to name a few. The other benefit of doing many smaller projects is that if administered well, it can feed money into smaller business that lack the capacity to even begin to contribute to larger projects. And that would also mean the economic advantage would be spread around, rather than being concentrated in a few multinationals. It would just take some out of the box thinking, and a willingness to forgo projects that feed political ego in favor of mundane shit. That may well be a bridge too far.

 

[Happy MEel]

In terms of infrastructure, it's worth noting that building is really coming off the boil, so there is a lot of spare capacity to come on line there.

As for major projects, I'm in the same position, I don't know how much there is that is "shovel ready", stuff like the high speed train would be years before a sod is turned, so that kind of project whilst likely worthwhile is too far off for it to make any meaningful contribution right now.

Mind you there's always more to do than big fancy headline projects. Plenty of smaller stuff can be done like road upgrades, parks, community facilities, even public housing just to name a few. The other benefit of doing many smaller projects is that if administered well, it can feed money into smaller business that lack the capacity to even begin to contribute to larger projects. And that would also mean the economic advantage would be spread around, rather than being concentrated in a few multinationals. It would just take some out of the box thinking, and a willingness to forgo projects that feed political ego in favor of mundane shit. That may well be a bridge too far.

The Western Harbour Tunnel and Beaches Link will be a decent sized project over the next 6 or 7 years.

 

[Gary Gutful]

There is already an inland rail project from Melbourne to Brisbane but it will stop at Acacia Ridge. It needs to go all the way to the Port of Brisbane to deliver better freight connectivity.

There are a suite of long term road and rail projects in planning strategies of state and federal governments that could be funded and brought forward. Many of them will deliver strong economic benefits in the long term and improve liveability.

Our exposure to and reliance on fuel imports is a major risk to the country. We should be investing in initiatives that decrease our fuel consumption - better public transport, electric vehicles etc.

Plenty of investment should go into fixing our broken energy sector. We should be more seriously examining hydrogen and biofutures. We have all of the necessary resources to create a thriving bioeconomy right now to ensure we aren't significantly exposed when the rest of the world continues to rapidly decarbonise.

However, all of the above is long term and doesn't help get politicians re-elected.

 

[Gary Gutful]

The Western Harbour Tunnel and Beaches Link will be a decent sized project over the next 6 or 7 years.

Would have made more sense to slice off the Northern Beaches and float it out to sea.

 

[Bandwagon]

There is already an inland rail project from Melbourne to Brisbane but it will stop at Acacia Ridge. It needs to go all the way to the Port of Brisbane to deliver better freight connectivity.

There are a suite of long term road and rail projects in planning strategies of state and federal governments that could be funded and brought forward. Many of them will deliver strong economic benefits in the long term and improve liveability.

Our exposure to and reliance on fuel imports is a major risk to the country. We should be investing in initiatives that decrease our fuel consumption - better public transport, electric vehicles etc.

Plenty of investment should go into fixing our broken energy sector. We should be more seriously examining hydrogen and biofutures. We have all of the necessary resources to create a thriving bioeconomy right now to ensure we aren't significantly exposed when the rest of the world continues to rapidly decarbonise.

However, all of the above is long term and doesn't help get politicians re-elected.

Announcing them is awesome for politicians, the actual process of building them not so much, but finishing them, even more awesome.

I guess the major political stumbling block is that the ones that announce them are often the ones that cop the flack over building them, so don't get the benefit of being the ones to finish them.

 

[Happy MEel]

Would have made more sense to slice off the Northern Beaches and float it out to sea.

Not a bad idea. It’d keep the riff-raff out of paradise.

 

[Hollywood Jesus]

There are a suite of long term road and rail projects in planning strategies of state and federal governments that could be funded and brought forward. Many of them will deliver strong economic benefits in the long term and improve liveability.

In regards to the state government projects, I have a personal viewpoint on this.

Shovel ready (as Bandy pointed out)? Yes? Good.
Funded in your forward estimates? Yes? Good.

Then, the federal government covers the cost to start work now (rather than whenever scheduled in the forward estimates) but the state government then has to forego the equivalent amount of GST revenue when the work was actually scheduled in their budget.

This way, we don't blow our federal surplus (Shut up! I like a surplus!!!) but the projects get moved forward and starts providing benefits, now.

Oh, I mentioned the GST...there's another can of worms that needs fixing...

 

[hindy111]

I haven't a lot of idea how to run an economy. But I feel like most people running the country would have some idea even though we all call the stupid and clueless. And if anyone on here was trying to do their job and making decision I am sure many would go pear shaped also. If it was all that simple my guess is they would make the changes.

I don't think our government is out to get us at all. We are competing globally and they are trying to do best for us both short and long term.

As far as a surplus goes I have no idea. But I've heard my accountant say multiple times having a strong surplus makes planning for future a lot easier and gives more options on the board.

Anyhows pur lives are better then most around the world so I am reasonably happy how things are at the moment.