Australia Is Indebted To Failed Policies

Australia Is Indebted To Failed Policies

It’s becoming pretty obvious that the time has arrived for governments to stop blaming the Global Financial Crisis (GFC) and start recalibrating the economy. The only problem with such a suggestion is do they have the wherewithal and economic nous to make such decisions. The mining industry has commenced operation wind back where now the attention diverts to a recovery in the property sector. Again on a wing and a prayer the government is hoping for a miraculous free fall of the Australian dollar that would then allow manufacturing to start paying taxes again.

I guess the reality of the GFC was that certain industries are no longer competitive in the modern – age where they are now better suited in the recycle bin. Post GFC should be more about a period of enlightenment where businesses engage via technologies, which is exactly what the consumers are now doing. Simply put: Australia must reignite business confidence together with productivity which is falling faster than the European carbon price.

Start by removing this class war rubbish – when businesses are performing well employees are at their happiest given this resonates through job satisfaction. On the other hand when businesses are performing badly staff morale falls to rock bottom given they are then concerned about job security.

Then we have the upcoming budget which is looking more and more like a year one university student authored it. The Grattan Institute recently released a paper which concluded that “federal and state budgets will be generating yearly combined deficits of $80 billion within a decade unless welfare, health and education spending is cut”. Seems a tad strange to digest given the National Disability Insurance Scheme (NDIS) has just received the green light and Gonski is all but there. What remains to be seen is where these so called budget cuts will come from.

Altona

BUY PRINT

Last week we informed you of a reported $33 million Point Piper sale where I commented this would be the highest sale for the year. One week later – Altona (pictured above) has reportedly set the highest price for a residential home in Australia at $50 million plus.

The “World’s Greatest Treasurer” is in a spot of bother with his Fudge – where he will deliver his sixth budget deficit (somewhere between $10 – $20 billion). Somewhat fascinating given a $1.5 trillion economy where last year’s tax receipts totalling $317 billion still saw the government spending more. We now see a $3bn carbon hole in budget: report where The Australian Financial Review reported “the government plans revise down the projected price of carbon in 2015 – 16 from $29 a tonne to around $15, after the European price collapsed to around $4.20. Tax revenues from the Carbon Tax were projected at $6.7 billion to now $3.35 billion so where are those missing $3.00 billion plus the $12 billion ‘black hole’ missing revenues going to come from?

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Disastrous news – Dwelling approvals “lose momentum” with surprise fall of 5.5% in March led by NSW and Victoria: ABS what this tells us is as a result of the continuing declines this then eventuates in more manufacturing and small businesses closing due to contracting demands. Chronic declines in construction only add to rents continuing to rise as too property prices.

Poor priced out of Sydney rental market where Anglicare Sydney analysed the cost of 12,880 properties for rent in greater Sydney this month only 23 were affordable for people on welfare benefits.

This week we saw the Australian Taxation Office (ATO) reveal that negatively geared property investors lost $13.25 billion in 2010 – 11. These losses are tax payer funded. The ATO revealed in 2010 – 11 Australia had 1,811,174 property investors with 1,213,597 posting losses despite all time high rents. The problem for the government is if they were to abolish negative gearing this would send the Australian economy into immediate recession.

Another black hole!

A slight increase in stock levels this week although well down on the levels seen in 2012.

Source: Australian Property Monitors

MOSMAN – 2088

• Number of houses on the market this time 2012 – 111
• Number of houses on the market last week – 76
.Number of houses on the market this week – 83
• Number of apartments on the market this time 2012 – 104
• Number of apartments on the market last week – 75
.Number of apartments on the market this week – 85

CREMORNE – 2090

• Number of houses on the market this time 2012 – 14
• Number of houses on the market last week – 11
.Number of houses on the market this week – 17
• Number of apartments on the market this time 2012 – 35
• Number of apartments on the market last week – 19
.Number of apartments on the market this week – 17

NEUTRAL BAY – 2089

• Number of houses on the market this time 2012 – 19
• Number of houses on the market last week – 5
.Number of houses on the market this week – 7
• Number of apartments on the market this time 2012 – 66
• Number of apartments on the market last week – 32
.Number of apartments on the market this week – 29

For this week’s sales in Cremorne real estate, Cremorne Point real estate, Mosman real estate, Beauty Point real estate, Clifton Gardens real estate, Balmoral real estate, Neutral Bay real estate, Cammeray real estate.
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For this week’s open for inspections
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Like never seen before the federal government now has to stop buying votes in the endeavour to win the next election – we are kidding ourselves if we pursue the train of thought that the Australian economy is in a world of its own. Australia’s government finances are best described as annus horribilus where there is no silver bullet.

The problem is silver bullets and silver linings forever remain at the forefront for political speak. High time it was acknowledged that Australia’s tax system is severely broken and corrupted. The Henry Review suggested Ctrl|Alt|Delete.

Until our elected politicians garner such a mindset Australia will forever remain indebted to bad policies.

Cheers ^__^

2 Responses to “Australia Is Indebted To Failed Policies”

  • Gordon says:

    At last, the Feral Government may have given up on its sole discernible policy priority of buying votes at any price.

    So now it’s flat out making deathbed constructs of hugely expensive monuments to itself, for which we (and our children) will pay dearly over an entire generation.

  • Yes – Gordon policies that are rotten to the core! Expenditure still exceeds income where it would appear the Gillard government has decided that this the problem for the incoming government. Obviously tanking the economy to ensure that a surplus in the short term will be near impossible.

    Hardly the right actions from a responsible government.

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