Fort Fumble now faces its very own financial crisis!

Fort Fumble now faces its very own financial crisis!

In life when individuals face that much dreaded financial crisis it’s the  outgoings that need to be harnessed so it comes as little surprise that Fort Fumble is facing a funding dilemma. There are very big cracks appearing (both internal and external) for a Government in serious difficulty to make ends meet as Julia Gillard warns of tough budget. A tough budget can have serious ramifications with consumer confidence.  This  then resonates through business by stymieing economic growth and strangling productivity.  Executives expect sales to fall on rising fuel, wages – study.

Allow me to apply the KISS Theory – (Keep It Simple Stupid.)

Facing a budget deficit of $41.5 billion in 2010/11 the Gillard Government now needs to borrow in excess of $110 million every day to meet its debt commitments. Despite forming Government in 2007, and then being dropped into a global financial crisis or (northern hemisphere financial crisis as many now call it). Fort Fumble would love nothing more than to get its hands on that $20 billion surplus and zero net debt, inherited when it  came to Government.

The Wayne Swan economic theory – “Shout the Bar” recovery is now considered a dismal failure.

Company tax slump puts hole in budget where Treasury minutes identify that 2010/2011 tax revenues will reach only $60.6 billion which is 10 per cent down on last year’s revenue forecast of $66.5 billion. Before last year’s election Treasury was projecting company tax revenue of $80 billion – which equates to a $20 billion or a 33 per cent bum steer. The 2010 Budget also factored in an exchange rate of US90c which is approximately 15 per cent lower than today’s rate. Economists are now projecting that the Aussie dollar will be at US1.10 by year’s end. Bugger – Wayne Swan has no Plan B given natural disasters forecast to cost economy $9 billion.

Saving Swan from himself thanks to our commodity price boom the budget bottom line would be woeful. As Malcolm Turnbull pointed out in a speech in Melbourne yesterday. “Treasury now calculates that the resources boom generated revenue windfalls of approximately $65 billion during Labor’s first three years. Of course every cent and more was spent.” He added that Treasury projects that a further $30 billion is set to flow into government coffers in 2011 – 12 as a result of the boom. But, he added, ‘when Wayne Swan delivers the 2011 – 12 Budget on May 10, you can safely bet every cent of that will be spent too.” When one clearly looks at the entire economy it becomes blatantly obvious that mining hides flatlining economy. Which takes us to the next level of discussions Turnbull first and clearest on the need for a sovereign wealth fund.


Without jumping to obvious conclusions, Fort Fumble’s directive for an immediate tools down order is estimated to be worth more than $12 billion – a signal that this project is now headed backwards. High prices force NBN to suspend cabling tender process and look elsewhere and as day follows night NBN head of construction Flannigan quits. So far Fort Fumble has spent $1.400 billion and to date, only 500 Tasmanian households have been connected.  This equates to a cost (per household) of $2.800 million for each connection and it will only get worse as fears National Broadband Network bill could top $44bn.

Freedom of Information revealed PM’s carbon tax to cost households $16.60 a week, Treasury figures show then an unintelligent  rebuttal  by Climate Change Minister Greg Combet who dismissed the finding, saying “they are not modelling that would reflect the Governments current approach.” Of course Mr Combet is banking on the fact that much like company tax projections, his Treasury has a 33 per cent over projection?  The only problem with the rejection is that the Government can’t correct the Treasury figure because (it appears) that it is yet to cost a carbon price. Or, if such a carbon price does exist, why does it remain a secret as detail of carbon compensation up in the air.

Source: The AustralianI was wrong to ditch emissions trading: Rudd

Reserve Bank holds back on interest rate rise given underlying inflation which has slowed to its lowest level in a decade, despite soaring petrol and food prices. You can also throw in residential rent increases which increased nationally by 1.4 per cent and by 2.7 per cent in the capital cities according to the RP Data March 2011 Quarterly Rent Review. The average rent for an apartment in Sydney is now $430.00 per week and that does not include utilities and an extra $16.60 per week for a  carbon tax. If Fort Fumble was not in such a dire financial position, would a carbon tax have been considered? Is it to reduce emissions or reduce Government debt?

No home price growth over the next year: NAB which is not a bad thing as economic markets reconfigure and stabilise. I don’t support the Australian housing bubble argument and those comparisons to what happened in America. Firstly, our banks are up there with the best performing on a global scale. Secondly, in Australia (unlike America) you can’t send the keys back when the going gets tough without facing the financial consequences. Thirdly, Australia has a rapidly growing population and a severe under-supply of housing.  Australia’s affluent suburbs have been driving up the national average although the measure relates to average income. Those with an average income do not purchase in the affluent suburbs.  Those with above average incomes do. The Australian property bubble will only burst if the ‘above average’ earners find themselves in dire financial circumstances that necessitate an immediate property market withdrawal – which won’t be happening anytime soon.

Australia today is just one of a handful of countries remaining, where the sale of the family home is tax free . Nor is it tax deductible as is the case in the vast majority of countries.  Maybe the Australian housing formula is what other countries should be adopting,  to ensure that their property markets remain stronger during a financial crisis? It is very hard to argue with the property facts – and facts are obviously missing with the carbon tax debate.   This  is why support for Labor and Julia Gillard plunges again as carbon tax takes its toll and this week’s sin – binning of the NBN Co will only make matters worse. For Labor it’s Julia or bust given the party she leads is starting to make the Estate of the Late Fort Crumble look like the perfect political party.

What you didn’t read in The Sydney Morning Herald this week was Jonathan Chancellor quits SMH to set up rival site. Sadly, we can reveal that he won’t be joining us here on Virtual Realty News as he doesn’t want a tax problem. After Virtual Realty News Jonathan’s Title Deeds column is the most popular weekly read in real estate!!!

Crikey! After 25 years, this real estate legend has well and truly stood the test of time. Another newspaper journalist moving from broadsheet to online.  Who would ever have  thought?

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

9 Responses to “Fort Fumble now faces its very own financial crisis!”

  • Ann says:

    The pressure on Gillard & Swan will be unbearable following the Budget.

  • Hotly Spiced says:

    Incredible how it only takes one or two idiots to erode a nation (in record speed) of $20 billion then plunge them into $41.5 billion of debt. Had they any financial clue that $20 billion would still be there plus more, and funds needed to recover from our recent natural disasters wouldn’t be an issue.

  • Patricia says:

    Robert – To regress to local real estate for a moment, on Deb Cameron’s ABC 702 program this morning, Jonathan Chancellor reported that while ‘…Mosman is miserable…’ he noted positive news in that two non-waterfront Mosman properties (intimating they were on Balmoral slopes) sold this week for about $15m each.

  • I think all ‘off shore’ buyers looking for the elusive “bargain” on the Lower North Shore should read this weeks edition.

  • Patricia – that is correct one is listed above in the graph at number 4, in Stanley Avenue. The other sale I understand exchanged yesterday and is about 50 metres away to the north of Stanley Aveune.

    Correct both on Balmoral Slopes.

  • P.S. Love the shot of Bilgola Beach Tim… my old stomping ground. I can see my previous abode in the shot.

  • Patricia says:

    Andrew Blaxland – Any offshore buyers looking for a local bargain will have their efforts frustrated by the local currency as well!

  • Robbie Mac says:

    And still no $5m+ analysis. Leaving that for Mr Chancellor? Hehe!

  • Ann says:

    Yes Robbie,

    We need promised kept in blogs

Leave a Reply

Your email address will not be published. Required fields are marked *