2011 – A year of smart initiatives or dumb decisions?

2011 – A year of smart initiatives or dumb decisions?

We are all well acquainted with the phrase ‘policy on the run’ and in 2011,we are already seeing politicians on the run! Has all this spin left our pollies dizzy?

Welcome to our first edition of Virtual Realty News for 2011 where we start the year with a levy, a tax or a necessary evil and what does this say for future natural disasters if this sets a precedent? Will Australians be as generous with their donations of money, clothes, furniture and time? Of course they will. It’s just that immediate fund raising efforts will be severely affected. Is this announcement a smart initiative or just plain dumb? The levy is expected to raise $1.8 billion, but in all probability, the fund raising events that are and have been organised across the country, would easily surpass this figure. Australians love to give – just not to incompetent governments. If there is a shortfall then bring in yet another tax (such an ugly word.)

Gillard’s spinning in a straightjacket – “to put the economic significance of the $1.8 billion that will be raised by the “one – off” levy in perspective, it represents less than 0.5 per cent of the government’s $362 billion of budgeted spending for this year.” Another public spending programme that goes pear shaped, with nobody in the government being held to account. Building projects are not exactly a strong point at Fort Fumble BER bungle is uncool for school. It has now been revealed that eight out of ten new classrooms (1284 out of 1639) built in NSW have no air-conditioning. A smart initiative or just plain dumb?


We celebrated Australia Day this week and surprise surprise, Tim Mooney coaxed the seaweed at Castle Rock, Clontarf to join in the celebrations.

Julia Gillard backs FOI exemption for taxpayer – funded NBN to avoid public scrutiny. I can think of 36 billion reasons why this roll out should not be exempt. A smart initiative or just plain dumb?

Moving on to Fort Crumble which is now on life support and given less than two months to live, the voter support system has been turned off. Not exactly a “say it loud, say it proud” endorsement Deputy Premier leaves ‘Labor’ off campaign leaflet given it is too late to sack Premier Kristina Keneally. The 7.30 Report this week ran its views on the Power struggle. “The NSW Labor Government’s fire sale of the state’s electricity assets may prove to be New South Wales Labor’s most diabolical scandal yet – just two months before it heads towards electoral abyss after 16 years in government.”

In a nutshell – Andrew Clennell, State Political Editor, Daily Telegraph, “It’s burning the villages on the way out. It’s a scorched earth policy. They didn’t want Barry O’Farrell to come in a position where he could sell the electricity assets for $15 billion; then have all that money to spend to keep himself in office for 12 years. They wanted to trash it. I mean, they deny it absolutely, but the NSW Labor right machine is the most ruthless political machine in the country without a doubt.” Now that is just plain dumb. This election can’t come soon enough and explains why the Deputy Premier (wife of federal infrastructure minister) left all mention of Labor off her pamphlets.

Now to property – interest rate hikes are on the way – it’s just a matter of when. The Reserve Bank of Australia (RBA) won’t do anything until the end of the June quarter at the very earliest, despite worsening business conditions.

Inflation outlook surges and it will only get worse given the flooding in Queensland where food prices will jump immediately inflation fears at highest level in 2.5 years. Petrol prices are already on the way up and predicted to climb above $100.00 a barrel in the first quarter of 2011 and $120.00 in the second quarter as millions fear cost of living increases.

Which is why I agree that property prices won’t be doing much in 2011 and this not really not a bad thing. Already in Mosman it appears that we will see modest offerings and that is unlikely to change throughout the year. It appears that households are consolidating and economy’s growth prospects dim. To put this into perspective Sydney prices higher than NY, London and more importantly Aussies turn their backs on credit cards where in the December quarter of 2010, credit card debt was slashed 14 per cent, from 2.1 per cent to 1.9 per cent.

Mosman house prices will be competitive given fewer offerings (at the start anyway). Here is our review of Mosman house/semi sales for 2008, 2009 and 2010.

    Total Value Sold

  • 2008 – $774,865,612
  • 2009 – $668,966,377
  • 2010 – $777,865,158*
  • *Still being compiled

    Total Number Sold

  • 2008 – 360
  • 2009 – 334
  • 2010 – 334*
  • *Still being compiled

    Median Mosman Price

  • 2008 – $2,275,000
  • 2009 – $2,000,000
  • 2010 – $2,100,000*
  • *Still being compiled

    Average Mosman Price

  • 2008 – $2,738,041
  • 2009 – $2,397,728
  • 2010 – $2,483,864*
  • *Still being compiled

Source: Australian Property Monitors

Interesting to note the average price falling and I attribute this to the fewer numbers of merchant bankers in the market (especially at the top – end). More on this in future editions, when we break the markets down further.

Australia has the highest interest rates in the western world and now the highest levy (tax) ever imposed by a federal government in its history.

Ironic that our new big tax is heavily weighted at those who didn’t vote Labor! A smart initiative, or just plain dumb?

Labor’s big bill for poll research as the Gillard government increased spending on market research by 42 per cent to $31 million in the year preceding the election.

With the latest new tax/ levy, I believe that Julia Gillard has completely misread the Aussie ethos and should watch the NSW Labor right machine whose members are about to have plenty of time on their hands.

Ask one Kevin Rudd? I predict yet another PM spill in 2011.

Let’s finish the edition with a great story – the official launch of our Richardson & Wrench Mosman & Neutral Bay Corporate video for 2011.

Video by Visual Domain

Cheers ^__^

This week’s sales Mosman real estate, Beauty Point real estate, Clifton Gardens real estate, Balmoral real estate, Cremorne real estate, Cremorne Point real estate, Neutral Bay real estate, Cammeray real estate Click Here

6 Responses to “2011 – A year of smart initiatives or dumb decisions?”

  • Ryan O'Grady says:

    Great to see you’re back Robert, hope the holiday was good!

  • Vas says:

    He’s back alright! Nice work Rob.

  • Thanks Vas – yes we’re back and ready to go!

  • Ann says:

    Welcome back Robert,

    Excellent corporate video as well. Love the cartoon, so apt of Gillard and Tim Mooney seaweed photo is great as well.

    Excellent start to 2011.

    Good luck to all

  • Robbie Mac says:

    The QLD floods only served to highlight the gaping chasm between the various capabilities of our various governments. Anna Bligh, herself on political life support, has managed to find the political “sweet spot” with her strong leadership in times of genuine crisis, whilst simultaneously highlighting just how poorly we are being served federally. Bligh’s resurrection, even if temporary, should only hasten the Orange Roughie’s demise. The flood levy will also add to the acceleration down the slippery slope. Poorly thought through, poorly spun and based on form, no doubt will be executed poorly as well. Perhaps she should just give the money to the NSW Right, as they know a thing or two about how to execute properly.

    Sadly, for the rest of us, this poor decision making will overflow into the rest of our lives. The federal fixation, sadly on both sides of politics, with a budget surplus by 2013 is back to front. Let’s assess the need first, then decide the policy, then review in the bigger context, rather than have a sound bite, populist, lowest common denominator goal. Finally, the media are picking up and running with this, listening to the genuine experts, albeit six months too late. I hope those sitting in the centre benches think a little harder about it too, as they have wonderful leverage, and apart from some dramatic theatre last winter, they haven’t really used it as they should.

    Why is this important? We are economically robust, but a series of poor decisions will erode not only the reality, but also the perception. That won’t be good for investment, Australia, or property prices.

  • Jolyon Bone says:

    Generous assistance to those who are in desperate need for “re-building Queensland” following the ‘unprecedented’ floods is entirely reasonable – even if it requires a levy to do so…….but wait a minute……what are these funds to be used for? When you build a city on a flood plain what can you expect when it floods? “Unprecendented” as Julia Gillard regularly asserts?? Just look at the data: http://www.bom.gov.au/hydro/flood/qld/fld_history/brisbane_history.shtml

    These floods are not climate change in action, they are a regular and certain feature of the whole Brisbane basin.

    So we are going to “re-build” things as they were? OK, so things are better now because of the Wivenhoe Dam. An extract from Wikipedia:

    “During a flood the dam is designed to hold back 1.45 million megalitres (1.18 million acre feet) of additional water for flood mitigation or 225% capacity. Under the water release plan which is defined by law, excess water must be released from the dam within seven days of it reaching 100% capacity. Between April 2004 and September 2008, a 165-metre (541 ft) wide auxiliary spillway with a three-bay fuse plug was installed on the western portion of the dam to further mitigate flooding. In 2007, a feasibility study concluded that Wivenhoe Dam failed to satisfy the Australian National Committee on Large Dams (ANCOLD) guidelines on acceptable flood capacity.”

    During these last floods, Wivenhoe was exposed to 2.5 million megalitres of flood water, against a design capacity of 1.45.

    Can anyone tell me what is wrong with this picture and why the levy is to be used to “re-build” so the same thing can happen again – without any apparent plan for the major increase in flood mitigation infrastructure so clearly required?

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