Budget 2012: On A Wing And One Almighty Prayer!

Budget 2012: On A Wing And One Almighty Prayer!

Another fascinating Fudge–it which evoked more of a class war than anything else with the Australian Labor Party (ALP) continuing down that wobbly path of trying to re-unite with a disintegrating party base. Gone are the days of self promoting their initiative where the Henry Tax Review is now more a case Federal Budget 2012: Wayne Swan and Henry who?

It is abundantly clear that Budget 2012 was more about a cash splash to calm carbon fears which begs the question: If the Carbon Tax is going to have such an extreme impact on household finances, the Gillard Government has just confirmed it – in bold lights.

Just as interesting that at the previous Fudge–it, the deficit was forecast for this year at $23 billion and has now come in at $44 billion. This is somewhat extraordinary, given Wayne Swan expects to see tax receipts increase over the next twelve months. On the other hand, business owners will tell anyone who wants to listen that business today, is much harder than it was twelve months ago.

To add further starch to my recent comments, futures markets are strongly pricing in a cash rate of 2.5 percent for March quarter 2013. Bearing in mind at the bottoming of the Global Financial Crisis (GFC) Australia’s cash rate bottomed at 3.00 percent on April 8, 2009. Somewhat scary financial markets are already factoring a cash rate at 50 basis points below the GFC trough.

Property buyers should definitely be locking in variable rates.

BUY PRINT

So we have Wayne Swan’s dangerous debt game which (not mentioned in the Budget papers) – If China’s economy stumbles, Australia’s deficit will soar.

In recent editions I have been harping on as to why our Reserve Bank of Australia (RBA) is the only G20 central bank that works from out of date data.

The reason, why?

Lack of funds leaves Reserve Bank relying on out – of – date data so why, did the “World’s Greatest Treasurer” Wayne Swan not address this in his Budget 2012 – hardly an ALP endorsement for its “working families”. In a 2010 submission to the 16th Series Review of the Consumer Price Index, the RBA said it was “strongly of the view” that a monthly CPI constituted “best practice” and more frequent data would help the bank make better assessments of inflation data.

So what would this cost the Gillard Government?

The Australian Bureau of Statistics estimates that it would cost $6 million to commence publication of monthly data, with another $15 million required to keep it going. Quick to pay Craig Thomson’s legal bills yet not interested in providing the RBA crucial data – try working that one out given again this was missing from the budget.

Everyone was no doubt amazed when yesterday, the jobless rate in surprise fall what an embarrassing fudge this is. If you work just one hour a week you are considered fully employed – another broken system within the Australian economy. For the record: the unemployment rates across the states was Tasmania 8.3 per cent, Victoria 5.3 percent, South Australia 5.2 percent, Queensland 5.1 percent, NSW 4.9 percent and Western Australia 3.8 percent. The real Australian unemployment rate would be fluctuating around 9.5 percent.

Lower North Shore prices revived slightly in March: Residex with the Lower North Shore recording a slight price revival during the March quarter with house prices rising 3.79 percent. No doubt Julia Gillard read this report when she announced this week, Tony Abbott should “get off” Sydney’s north shore and talk to some “real families” in the “real world”. In the “real world” Ms. Gillard, seventy three percent of Australians don’t support you and that percentage is getting higher!

Another fascinating scorecard for local real estate this week where the number of available properties actually keep falling (at this point in time). Vendors are recognising price discounting and buyers are engaging with limited competition. This is the first week, where we have seen the majority of suburb data identifying lesser stock levels than previously recorded last week.

    MOSMAN – 2088

    • Number of houses on the market last week– 111
    • Number of houses on the market this week – 113
    • Number of apartments on the market last week – 104
    • Number of apartments on the market this week – 98

    CREMORNE – 2090

    • Number of houses on the market last week– 14
    • Number of houses on the market this week – 11
    • Number of apartments on the market last week – 35
    • Number of apartments on the market this week – 32

    NEUTRAL BAY – 2089

    • Number of houses on the market last week – 19
    • Number of houses on the market this week – 19
    • Number of apartments on the market last week – 66
    • Number of apartments on the market this week – 62

Source: Domain Property Monitors

For this week’s sales in 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

For this week’s open for inspections –
• Click Here

The grubby side of politics will dominate in coming weeks although it’s interesting to note that Wayne Swan’s (tough budget talk) actually ended up resembling that of a marsh mellow.

Federal parliament is fast becoming untenable – don’t rule out a visit to the polls in 2012.

Cheers ^__^

 

6 Responses to “Budget 2012: On A Wing And One Almighty Prayer!”

  • Robbie Mac says:

    I’m back!

    Alas, no pithy insights this week, as it has been summarised neatly above. Federally, the behaviours and stench are reflective of NSW ~18 months ago, and we all know where that led! Until Canberra is sorted, business and property will be in a holding pattern for some time, and the duration of that might include not only a change in government, but a waiting period to see the new government’s capability (or not).

    Groundhog Day.

  • Welcome back Robbie – I have been thinking about your Bigpond issues and have come to the conclusion the reason why, Virtual Realty News was blocked at your server is a conspiracy theory.

    The Communications Minister Stephen Conroy did not want to see you sharing your insightful economic knowledge on Virtual Realty News so he blocked you.

    The troubles some politicians will go to the avoid the truth – having said that I don’t believe he is on his Pat Malone 🙂

  • Ann says:

    Hi Robert,

    Yes the cash splash No 3 is to rescue voters in “Labor Heartland” but just the rusted on segment, will do nothing for the marginals. If will be interetsing to see the Poll on Tuesday.

  • Ann says:

    No opinion poll bounce for Labor

    The first major poll published since the budget has done nothing for the standing of Labor and Prime Minister Julia Gillard.

    Looks like a chilly winter in Canberra, maybe she would be warmer at Altona?

  • Dave says:

    Another great newsletter, Robert.

    There’s one thing I disagree with. As a homeowner, I must say I’m happy to pay my share of whatever the carbon tax costs. It’s a vital policy and to complain about its price is like the patient on the operating table carping about the price of his open heart surgery. He just wants the Dr to get on with saving his life.

    Rather than complain, we should just hope we can slow global warming and switch to an innovative green economy fast enough to save our economy and country from the hole into which coal and oil are sinking us.

    I believe that in 20 years Julia Gillard will be seen as a brave leader who sacrificed her own career to accomplish one of the great, necessary reforms of the Australian economy. Even those who voted against her will be thankful for what she did for us.

  • Ann says:

    @ Dave

    The carbon tax does nothing for Australia climate or the World, even Labor acknowledge that?

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