A budget base that lights up and ‘mines your own business’!

A budget base that lights up and ‘mines your own business’!

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Somewhat dejected your Virtual Realty News scribe  (again) did not receive an invitation to Fort Fumble’s (Federal Government) budget lock down. Bugger!  Ten years of delivery and yet again we are ignored as a  non – political friendly identity.

A three ingredient budget (sounds like a cook book) red, being iron ore, black being coal and smoke meaning cigarettes, with  these two big new  taxes  (cigarettes and mining)  both less than one month old. Again, more economic policies consistently on the run.  It definitely looked that way when The Emperor (Kevin Rudd) threw a hissy fit on the 7.30 ReportHere (scroll down to you see The Emperor)

The Super Profits Rent Tax (SPRT) is subject to Senate approval yet it remains the nucleus of the budget. We know in real estate, that ‘subject to approval’ means absolutely nothing as Alan Jones reminded Wayne Swan on Wednesday here is the audio – a beauty.  Rudd may be the blip in selling mining tax given Rudd in freefall: voters lose faith. What a difference a year makes. Last year, Wayne Swan refused to mention the budget  ‘D’ word and kept muttering 58 without mention of the next word, namely ‘deficit’. Kevin07 stages election comeback although he is on notice given his party warns PM Kevin Rudd: no more U – turns.

It won’t be easy as Anna Bligh warns of super tax threat to LNG industry as each day goes by it is looking highly likely that the mining companies will lead a massive capital strike in the lead up to this year’s  Federal election.  As well,  the inflation genie is now growing at a rapid rate. The twenty five per cent increase on cigarettes will reap havoc on inflation. A massive mineral shut down would bring Australia to its knees so The Emperor has picked a fight well above his fighting weight. Knock out?

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Who’s next to cop a super tax? A question that needs to be asked should the SPRT be blocked in the Senate. Don’t forget Europe on the brink: the web of debt that threatens the world although we should note that Wayne Swan apparently now considers himself as the leading global economic treasurer. On an economic roll Wayne Swan boasts economic management gave Australia greater clout in G20 so rest easy Australia to withstand Greek crisis – Wayne Swan when he stopped short or serving up his special (Moussaka) economic recipe. A strong possibility that Greece’s debt problems could spread throughout the continent which would significantly increase global borrowing costs – higher interest rates? Europe debt could hurt growth: Lowe.

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Market turmoil sparks rates cut talk although the cash rate is significantly based on what is happening to the consumer price index which was 1.3 per cent for the September quarter 2009/10, 2.1 per cent for the December quarter 2009/10 and 2.9 per cent for the March quarter 2009/10.
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Follow the bouncing ball where inflation is growing rapidly and don’t forget the new Rudd tobacco tax where in all probability, inflation should currently be around 3.5 per cent. Bear in mind that the Reserve Bank of Australia has an inflation comfort zone of between 2.00 and 3.00 per cent. I would also add that in this week’s Federal Budget – Wayne Swan has factored inflation at being 2.5 per cent next year.  The bouncing ball shows that CPI keeps jumping 0.08 per cent each quarter so June would come in at 3.7 per cent and December at 4.5 per cent. We need to reduce spending although The Emperor has a different view on that Greek crisis bolsters need for stimulus spending. The Emperor knows a thing or two about building when insulation clean – up cost hits $430 million and we have asylum refugees residing in four star hotels and costly exercise: asylum seekers’ private jet flights cost $5.6 million.

12-05-2010 10-20-17 AM

Stop the reckless spending The Emperor demanded in 2007 – no budget cuts for Kevin Rudd’s own department. Then sham budget built on two great fiddles Terry McCrann in full flight “The Government’s claim to fiscal rectitude is an utter sham. Wayne Swan’s budget is built on two great fiddles.” Then Peter Costello responded to the 2010 Fudge – it Swan’s balancing act won’t add up which was more like ‘ liar, liar – pants on fire’.

The tradition continues – Hit by another sneaky fee NSW Labor (Fort Crumble) introduced yet another property tax on top of the other countless property taxes that continue to retard property investment /development in NSW. Another day, another property tax where our latest property tax took aim at Australia’s most incompetent government new tax on property under fire which was announced immediately after the Federal Budget – ‘hide n seek? Our NSW government is hopelessly bankrupt and even more hopeless with astute economic policy.

A government in total disarray where the Sydney Sunday newspapers reported Premier Pristine (Kristina Keneally) is headed off to Canberra and Joe Tripodi and Eddie Obeid retiring which suggests that there is no more milk in the NSW cash cow. Time to mooo – ve on it would appear. Then ALP braces for ‘massive flogging ‘in disgraced MP’s seat where Fort Crumble is bracing for a massive 30 per cent swing against them. Not exactly a great platform for The Emperor as he maps his election announcement strategy in 2010. At the next election we could see a Guinness Book of Records entry for a government that records the highest swing against it by the electorates – both Forts Fumble and Crumble.

Whilst on swings – I did a comparative analysis with our March quarter 2009 and March 2010 sales results which draws some interesting conclusions. March 2009 Mosman’s highest recorded sale for the year 6 Buena Vista Avenue Mosman and March 2010, Mosman highest recorded sale (thus far) 19 Morella Road Mosman both subscribers too. Subscriber sales to Virtual Realty News now sit at $949,404,220. Our average house sale value in March quarter 2009 was $4,637,000 and whilst we increased turnover by 89 per cent in March quarter 2010, our average sale price came in at $4,610,937. For apartments, we averaged $653,611 in March 2009 and in March 2010 it jumped to $1,242,000. Apartment sales increased by 18 per cent from March quarter 2009 to March quarter 2010 and apartment sales volume increased by 188 per cent over the same period.

Also on the increase is our population as Marize and Michael Bellomo delivered their first child, Chanel Helena Bellomo and Jacqui and Mike Rowland Smith delivered a brother to Will – Riley Rowland Smith. Marize and Jacqui are doing well as are their beautiful babies (who I will soon subscribe,once they connect to the internet).

Thoughts on the Federal budget or, was it a fudge – it? My concerns are directed to the Consumer Price Index as inflation is sky rocketing. Forget Fort Crumble as everyone appears to be abandoning that sinking ship. Someone should tell Kevin Rudd to stop spending  rate rises in doubt as markets melt down and more importantly arrears rise as rates climb. Spare a thought for mortgage stress hits hundreds of tenants and Fort Crumble’s latest property tax will dampen property market sentiment. Leading data points to housing lull: economists – batten down the hatches the Moussaka economics are showing signs of double dipping – no stimulus this time either.

Inflation is much like a politician’s ego – although this economic measure could also result in their downfall. Should inflation climb to greater than 3.5 per cent during the June quarter 2010 then it could be at 5.00 per cent by the end of the December quarter which then, will create havoc with interest rates. To put this into greater perspective, in the September quarter 2008/09 the CPI hit 5.00 per cent and the cash rate target was 7.00 per cent – today the cash rate is 4.50 per cent.

So it is just not the cigarette tax that went up in smoke and Wayne Swan’s prediction that inflation will be 2.5 per cent in 2011,has as much chance as the Melbourne Storm winning the NRL premiership in 2010.

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

10 Responses to “A budget base that lights up and ‘mines your own business’!”

  • Michael says:

    Robert, the other budget killer is that its based on Australia achieving its best terms of trade for 60 years. I just can’t see how that is possible with the global economy as it is at the moment. If the budget forecasts are indeed proven to be false, when will it become evident. Yes you guessed it after the election before next years budget, where the GFC phase 2 will be blamed as more taxes go up.

    Certainly the new super tax on mining will have substantial ripple effects throughout the entire Australian economy as we have already seen with public and private comments from small – medium sized retailers. Wait until Australians get their superannuation statements in around October, ooops does that mean KRUDD will go early to polls in September.

    Since Federation, has there been a worse decision by a Federal Government?

    I hope all Australians look beyond the sugar and see the real impact of this “policy”.

  • Michael, the joint miners strike/shut down will draw plenty of attention – the SPRT will get very ugly unless Rudd does yet another back flip 🙂

  • Gordon says:

    Robert, Fort Fumble might not have learnt much over the last 3 years, but no doubt they have all watched with interest the changing scene here in Fort Crumbled.

    The worst government in our history has seen its stocks rise after we had our fourth new premier imposed on us. No sexist remarks about the reason, but it seems that The Emperor should be looking over his shoulder. Perhaps he has been, and that might explain a few things!

  • Mae says:

    Hi Robert, great analysis on whats happening. Always an entertaining yet informative read.

  • Michael says:

    Did you notice this week that KRUDD has advised that the valedictory speeches for MP that are not standing for the 2010 election will be held on May 27.

    This is a good indication that KRUDD is getting ready to call an election soon after. Parliament is scheduled to sit until June 26 and then the winter recess sees them not sit again until August 24.

    KRUDD has left his options open to call an election early as many commentators are predicting.

    Tip is that he call it around mid August for a mid – late September poll, right in the middle of football finals distractions.

  • Morgan Poll over last 2 nights: support for ALP 36% (down 3.5% in a week), L-NP 46% (up 1.5%). 2PP coalition 52% (up 2%) ALP 48% (down 2%).

  • Michael says:

    The ALP has shot itself in both feet, with this mining tax. They were already in trouble with the insulation and school building massive waste, as well as immigration fiasco, extra taxes etc.

    The mining tax will ripple through Australia and they will see worse to come.

  • robert says:

    Rob

    Was that you and Steve on the front cover of last weeks Mosman Daily?

  • Robert,

    It was Steve – I forgot to bring my gear so I had to decline the kind invitation 🙂

  • Snow White says:

    Kevin Rudd – our fearless leader

    Kevin Rudd goes on a state visit to Israel …

    While he is on a tour of Jerusalem he suffers a heart attack and passes away. The undertaker tells the Australian Diplomats accompanying him, ‘You can have him shipped home for $5,000,000, or you can bury him here, in the Holy Land, for just $100.’

    The Australian Diplomats go into a corner and discuss for a minute.
    They come back to the undertaker and tell him they want Kevin shipped home.

    The undertaker is puzzled and asks, ‘Why would you spend $5,000,000 to ship him home, when it would be wonderful to be buried here and you would spend only $100? With the money you save you could help pay back some of the deficit, or help the elderly’.

    The Australian Diplomats replied, ‘Long ago a man died here, was buried here, and three days later he rose from the dead.

    We just can’t take the risk.’

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