Same horse different jockey – Giddy Up Gillard takes over the Reins

Same horse different jockey – Giddy Up Gillard takes over the Reins

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It started as a two horse race then a last minute scratching but were they polls apart? A ruthless party room coup that saw The Emperor now destined for the Ministry of Where Are They Now – this was described by some as a professional hit by a broken party feeding on its own the execution of Kevin Rudd. On a sadder note we lost an interesting character here at Virtual Realty News – bugger! Gillard becomes Australia’s first female prime minister as a tearful Rudd stands aside – Operation Ranga which left The Emperor’s curriculum vitae resembling a post – it note.

Giddy Up Gillard announced the cull – a good government was losing its way and straight into a gallop, cancelled  the tax – payer funded mining advertising campaign. Ironic  that this was strongly supported by the newly anointed deputy prime minister Wayne “Left – Right” Swan. During Question Time they kept exiting Finance Minister Lindsay Tanner won’t contest seat so the “Big Four” – Rudd, Swan, Gillard and Tanner  has been reduced to the “odd couple”. The Emperor has become the first Labor prime minister to be removed from office in his first term. Giddy Up Gillard will be hoping in a short space of time, that  they become polls apart. Fort Fumble is today looking more like Fort Chaos  – all over the place with no compass in sight.  Will it sink as it takes  in water?

Chaos

BUY PRINT

Another major stoush earlier in the week caught my attention and what a beauty this one is shaping up to be , with only Wayne “Left – Right” Swan left in the ring.   Watch this space.

It has been suggested over time in the media that Treasury and the Reserve Bank of Australia (RBA) don’t always see eye to eye insofar as economic policy is concerned and  here is the proof. Stephen Bartholomeusz from Business Spectator filed Warwick the wise “Reserve Bank board member and leading economist Warwick McKibbin has shown some courage in making an explosive contribution to the debate about the Rudd government’s management of the economy and the quality of the design of its proposed resource super profits tax.” He “accused the government of panicking in response to the crisis and ramming through decisions “fraught with risk”. It had over spent in its stimulus package (and, indeed, is still stimulating even as the RBA raises official interest rates to control growth) and then they come up with the RSPT to try to compensate.“

24-06-2010 4-31-09 PM

“So, the government panicked in response to the GFC, committed too much spending that couldn’t be reversed and, for   political reasons – the perceived need to claim a  fiscal surplus – for which he said there was no economic basis – it had came up with the idea of raising the profits of the resource sector. McKibbin also accused Federal Treasury of becoming an arm of political policy and Treasury officials of producing “what I consider to be fairly politically – based evidence in support of a political policy, not economic policy” and criticised Treasury secretary Ken Henry for not only failing to consult experts on economic issues but also trying to silence them.”

In only what can be described as an extraordinary outburst Henry tells economists “to put down their weapons” and get behind proposals such as the resources super profits tax. What we are seeing is simply unprecedented within Australia’s political history – guns at twenty paces. Just like the execution of The Emperor a public stoush between the RBA and Treasury will add more pressure  at Fort Chaos.

But wait,  there’s more!   Former federal Liberal treasurer Peter Costello jumped into the ring declaring If its tax reform you want, try GST as next week marks the tenth anniversary of the GST. So it was only to be expected when we  read Ken Henry should get a new career – as a pollie and  it is hard to remember a time when such differences of opinion dominated Australia’s political landscape. Rudd under fire from Labor MPs over mining tax ads the rest is history when Rudd’s golden honeymoon ends in a bitter divorce.

We will be reading about this coup for weeks as there are some who believe Labor wastes a perfectly good PM although it has been conceded that Gillard’s Labor must now change policy tack which I assume means more back – flips.

Most embarrassing for the government is that Australia’s housing stock is currently short 178,400 dwellings and this number is growing not reducing. This is certainly not helped with now the sad news: higher rates a certainty as the gap closes on fixed, variable rates which further explains why the RBA is at odds with Treasury. Perish the thought that Giddy Up and Left – Right may be forced to curb their ongoing stimulus spending.

A newly elected prime minister and deputy, the RBA and Treasury bluing over economic policy and  the inflation genie now up and away. Throw in a federal election then a back – flip with the RSPT and the budget will have an almighty big hole in it. Alan Kohler wrote today on Business Spectator Gillard must mop up Swan’s mess “Julia Gillard’s biggest and most immediate problem is her deputy, Wayne Swan, and specifically the budget he brought down six week’s ago.

“Wayne Swan must bring down a mini budget that fixes his and Ken Henry’s catastrophic mess of May 11, so the RSPT can be removed as an election issue before the Prime Minister asks “the Governor – General to call an election so that Australian people can exercise their birthright and choose their prime minister”, as she put it yesterday.”

Gillard admits that her government was losing its way, but who was the navigator ? The Governor – General should cancel any plans for a holiday in the near future.

Taking a bullet for the party just took a whole new meaning.

Cheers ^__^

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6 Responses to “Same horse different jockey – Giddy Up Gillard takes over the Reins”

  • Gordon says:

    Yes, Robert, we’ve got a brand new (well, slightly altered) face as the Reigning Ranga of Fort Fumble, so of course everything will now be completely different to the bad old big spending days of Captain Krudd.

    It all seems just like the charade we have here in Fort Crumbled, where the same people put in the same very cosmetic change, and everything is now perfect.

    So there’s probably no need to ask if the grubby faction bosses think we are stupid.

  • Robbie Mac says:

    “On a sadder note we lost an interesting character here at Virtual Realty News – bugger!” Just wondering what this really means?

    Welcome the “Orange Roughie”, as correctly predicted here a couple of weeks ago. So we now have a full house – GG/PM/Guv’nor/Premier/Mayor. What is a man to do???

  • Snow White says:

    Interesting week. Here are two send ups.

    Censored

    http://www.youtube.com/watch?v=7PE_vr0t3FA

  • Snow White says:

    Charlie Aitken – Southern Cross

    Positive outlook under Gillard – benefit of the doubt.

    One of the key reasons I got heavily and publically involved in the RSPT debate was because I believed the very public fight between Canberra and the mining industry was doing Australia a tremendous disservice in terms of global capital markets perceptions of Australian assets.

    We consistently wrote over the last month that the government and mining industry should take their fight behind closed doors. However, that was never going to happen under the previous leader of the Nation.

    I think Prime Minister Gillard’s first step towards a ceasefire with the mining industry was both prudent and necessary yesterday. I congratulate the new Prime Minister of Australia for her conciliatory stance, which was also matched by industry leaders BHP Billiton, Rio Tinto and the Minerals Council of Australia.

    While many, many people are sceptical of her comments regarding the RSPT, and that is understandable, I believe there is some substance behind them and want to give her the benefit of the doubt.

    From what I understand, private polling results show the Labor Party will lose power if they go to an election with the RSPT in its current form. It is highly unpopular even amongst traditional Labor voters, and clearly played the major role in former Prime Minister Rudd’s approval ratings collapsing which led to his decapitation by the party machine. You can actually chart his accelerating approval ratings collapse from the day he announced the RSPT. Note well that Gillard is already distancing herself from Rudd, repeatedly describing decisions made by the “Rudd Government” as if she wasn’t part of it.

    I don’t think we should underestimate the sentiment and share price damage that has been done by claim and counter claim between Canberra and the mining industry. The fact Prime Minister Gillard was prepared to extend the olive branch in her first public address as Prime Minister shouldn’t be underestimated, neither should the willingness of the Australian mining industry to genuinely negotiate a new taxation regime. I actually believe there is a genuine solution to be found here and it has to come before the election.

    The ridiculous aspect of all this is it should have happened six months ago. All the major miners I know were always willing to work with the Federal government towards mining sector taxation reform. This fight was totally unnecessary and destructive. I think I described it as similar to having “a fight with your wife in a restaurant”; it was destructive, unnecessary and classless.
    From the emails and press coverage I received over the last month or so, it seems many of you believed I was either some Liberal Party “stooge” or mining sector “stooge”. Neither is correct; I am a “stooge” for Australian capital markets and the true long-term National interest of Australia. I believed neither was being served over the last month, and that is why I took the strong stance that I believed was in the long-term interests of Australia and Australian capital markets. I probably won’t be getting a Christmas card from the Rudd’s this year.

    I do strongly believe yesterday’s events were a step in the right direction for Australia and Australian capital markets. As an Australian capitalist I wish PM Gillard well in her new role. Hopefully from an Australian equity strategy writing perspective I no longer have to second guess Canberra to write accurately. That would be good for all of us and positive for the rating of Australian assets. I am of the view that perceptions of sovereign and regulatory risk in Australia have peaked (CDS rates also confirm this).

    In the mean time, and despite short-term volatility, I continue to believe the path of least resistance is higher in markets, and maintaining a “risk on” trading strategy will be rewarding, particularly in Australian sectors that had been “Rudded”. The two most “Rudded” being mining and mining services.

  • Snow White says:

    Here is the link to the sanitised version of the Rudd Downfall spoof video, with the 4 letter words blanked out.

    http://www.smh.com.au/national/rudd-tweets-his-thanks-to-supporters-20100625-z9hm.html

  • Ann says:

    Hi Robert,

    Certainly an interesting week in politics. Should be gripping to see what happens in lead up and during election campaign.

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