Our Governments Are Going For Broke!

Our Governments Are Going For Broke!

I’m not sure about you, but here we are in 2012 and every government in Australia is crying poor. Without drilling too deep, the common denominator is usually, bad management and policies. So why are they stone motherless broke? In fairness it is not unique to Australia it is a worldwide epidemic. Why is it that we have in our businesses and homes, state of the art technologies with the world’s highest electricity prices? This reminds me of the saying “politicians and nappies have one thing in common – both need to be changed regularly, and for the same reason”. Best practice is replaced with best guess where budgets are premised on a wing and a prayer.

State budgets face deficits on commodity prices the WA and Queensland budgets could be thrown into deficit to the tune of nearly $2 billion dollars as falling commodity prices hit their resources dependent economies. The lies that blind and mining suffers – “When is the duty of a state premier, or any leading minister, to tell the public the whole truth?” All we see with mining companies is the governments now taxing the bejesus out of them so little wonder that pipeline of investment starts to be scaled down. Australia (well our politicians) now find themselves in the position where – promises, promises, now it’s time to do the sums.

Businesses furious over govt cuts to tax breaks corporate Australia has reportedly been told (despite their protests), Labor is planning to go ahead with cuts to tax breaks and incentives worth a total of $6 billion to help achieve budget tax savings. The federal budget has collapsed which would explain Poll position: Gillard arms Labor for early election with new committee the word on the street is a March election. The Gillard government won’t go to the polls after the May budget in 2013 due to a massive blow – out! The bust that Swan didn’t see, remember where you heard it first!


In real estate talk Altona (pictured above) is spoken as Australia’s premier property given its amazing pedigree. Altona, the Point Piper harbour front, officially listed at $US56.9 million which is an amazing revelation or one huge faux pas on behalf by one listing agent, considering that up until now, the asking price has been somewhat of an industry secret.

Shock horror – residential property capital growth has stalled in five years since GFC: RP Data’s Cameron Kusher. Apart from the economic factors, the slowdown in capital gains can also be attributed to the fact that consumers have increased their level of savings and have subsequently reduced their levels of spending (particularly for housing).

Unit starts boost residential construction in June quarter but house starts fall to 11 – year low so true although there has been absolutely no government enquiry (to date) as to why? The pressure test for the top-end Sydney markets were dumfounded this week when Pacific Bondi Beach buyers riding the property wave through to the 2015 tide where the first release (last weekend) saw 74 of the 76 apartments selling for the asking prices. The sales ranged from one bedroom apartments for $1.900 million (70 squares) to penthouses for $10.3 million. These are boom market results although I agree new housing construction recovery a year off and will be uneven: BIS Shrapnel’s Frank Gelber.

With interest rates and unemployment low, there are economic positive signs all around: Mark Bouris which leads me to explain why. There is too much emphasis on what the Reserve Bank of Australia (RBA) does with the cash rate. Interest rates should be organically controlled through completion. This week, the home loans war got angrier when ME Bank cut its 3 year rate to 5.39 percent which is about 0.50 percent below the major banks. No RBA intervention (because they know) rates will go a lot lower. ME Bank left the first clue – without RBA intervention.

The Mosman September marketing campaigns conclude over the next week (from Saturday) before the school holidays commence (again). If I’m reading the market correctly, the 120 houses on the market this week should start reducing.

Source: Domain Property Monitors

    MOSMAN – 2088

    • Number of houses on the market last week– 115
    • Number of houses on the market this week – 120
    • Number of houses on the market this time 2011 – 111
    • Number of apartments on the market last week – 91
    • Number of apartments on the market this week – 84
    • Number of apartments on the market this time 2011 – 93

    CREMORNE – 2090

    • Number of houses on the market last week– 17
    • Number of houses on the market this week – 21
    • Number of houses on the market this time 2011 – 14
    • Number of apartments on the market last week – 17
    • Number of apartments on the market this week – 18
    • Number of apartments on the market this time 2011 – 26

    NEUTRAL BAY – 2089

    • Number of houses on the market last week – 19
    • Number of houses on the market this week – 19
    • Number of houses on the market this time 2011 – 12
    • Number of apartments on the market last week – 45
    • Number of apartments on the market this week – 45
    • Number of apartments on the market this time 2011 – 79

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.
Click Here (We do draw to your attention that APM is experiencing a computer glitch where sales have not been recorded for the last two weeks.)

For this week’s open for inspections
• Click Here

On the flip side Iron Ore prices to likely recover in Q4 although the same can’t be said for our respective governments budgets. When businesses (not governments) experience revenue declines they reduce overheads.

It has become very obvious that in Australia, business and governments bear absolutely no resemblance when it comes to best practice.

If you gathered the top 10 ASX listed CEO’s in Australia for a day (or two, or twenty) to review our state and federal governments’ finance models, the revelations would be fascinating.

The problem with Australian politicians today is the “I” word – they are not independent, but incestuous! In Australia, governments could employ a ‘Dream Team’ of business brains. Just a shame they are not smart enough to think of that. Too much politics, me thinks!

Cheers ^__^

5 Responses to “Our Governments Are Going For Broke!”

  • Gordon says:

    Great point, Robert, about pollies and nappies, but we’re not going there!

    As you say, every government in Australia is crying poor. And it’s not hard to find the common denominator.

    We’ve had wall-to-wall ALP governments, so now we must pay the price. As the political wing of the unions, the ALP always overboost government employment (most public servants belong to unions who helpfully donate large amounts of their funds to the ALP).

    Nicely circular for the ALP, but not good for anybody else. We have to put up with poor services because of the gross misallocation of resources, and pay excessively for everything for the same reason.

  • Gordon we can’t go upsetting the brethren now – can we! On that basis and you have an elected Labor government in power and every worker joined a Union we would then have zero unemployment.

    Now that would be the envy of the world – shame about the bottom line though!

  • Gordon says:

    No problem, Robert, every Labor treasurer knows how to fix the bottom line:

    1) Buy printing presses;

    2) Print more money.

    See, it’s simple.

  • Stuart McHardy says:


    I think you maybe right about an early election. Mr Swan was never ever going to deliver a budget surplus, I can’t wait to see who will be to blame & how much of a blow out it will be as for Altona I was thinking of something a bit modern.

    regards & happy selling

    Stuart McHardy

  • Stu – I will change your buying criteria on our database!

    I take it that you still don’t require garaging? 🙂

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