Then again, if anyone can bring down interest rates even further it's Tone - deep fiscal cuts in the current economic climate will probably necessitate even looser monetary policy to prevent a recession.
TestosterTone is single handedly going to give us an economic bounce starting late Saturday.
That will be fiscally buttressed by a government sector which is currently the only sector actually contributing to GDP growth paring back except for long term commitments to middle class welfare and real estate support.
That is going to be transmitted through monetary policy which neither brings the AUD down, or heads off a property bubble, or does anything to make Australian globally exposed sectors competitive.
The Australian economy in the face of all this will not shed jobs, in fact TestosterTone has indicated that 2 million jobs are in the pipeline.
Some clowns out there are worrying about debt. Hell we have about the lowest government debt levels in the OECD, and private levels dont count, but we should be looking to fire them right up from a starting base of circa 150% of disposable income.
Bring on Joe and Malcolm and the rest of Ruperts anointed team. Let them have their term in the sun. Recession will be warded off with the sacrificial toasting of that utter psychopath KRudd and that utter woman Gullard.
Its all good, You’re good, I’m good, It’s so fucking good all those people down the empty shopping centres near where I live need a right chewing out.
did your lip quiver a bit while typing that?
I am the love child of Tony Abbott and Pauline Hanson
Then again, if anyone can bring down interest rates even further it's Tone - deep fiscal cuts in the current economic climate will probably necessitate even looser monetary policy to prevent a recession.
Interest rates will always be lower under a Liberal government apparently. It doesn't augur well for the economy. House prices, on the other hand...
I agree with the article although not the whole series of booms. I think we will certainly see and upswing in consumer and business confidence which will lead to higher levels of investment. Housing will certainly get a boost once the election is over provided the Liberals win. If Labour some how manages a come from behind victory then confidence will fall, another 3 years of this failed Government.
My personal opinion is a change of Government to the liberals will have a similar effect if the RBA had cuts rates by 50 basis points on Tuesday. Much of the nation will breath easier with Labour out the door. Labour should lose 15-20 seats if not more.
I agree with the article although not the whole series of booms. I think we will certainly see and upswing in consumer and business confidence which will lead to higher levels of investment. Housing will certainly get a boost once the election is over provided the Liberals win. If Labour some how manages a come from behind victory then confidence will fall, another 3 years of this failed Government.
My personal opinion is a change of Government to the liberals will have a similar effect if the RBA had cuts rates by 50 basis points on Tuesday. Much of the nation will breath easier with Labour out the door. Labour should lose 15-20 seats if not more.
So merely shuffling the management crew will have the same effect as actually making borrowing cheaper by 50bp - without actually making it any cheaper?
This kind of confidence fairy must take steroids.
I won't be surprised to see a little bit of a post-coalition victory (yes, they are almost certainly going to win) "sugar hit" - but those hoping for a return to the golden age of Howard and Costello are very likely to be dissapointed.
Still, at least Tone seems to be embracing the idea of fiscal expansion just like Labor - while insisting that it's really fiscal contraction, in the knowledge that most people won't be able to tell the difference.
The fact that the coalition seem to be casting aside the idea of making deep spending cuts in reality while still paying lip service to them bodes a bit better for the economy.
THE next federal government is poised to reap the spoils of a major economic boost and multi-billion-dollar revenue windfall by 2016 as a result of the recent construction boom in Australia's liquefied natural gas and iron ore sectors.
The Australian has analysed a range of economic data, official forecasts, state and federal budgets and resource company profit estimates that all cast doubt on Kevin Rudd's assertions during the election campaign that the resources boom has ended.
Export earnings from Australia’s resources industry are forecast to rise almost 20 per cent — from $186 billion to more than $220bn — by 2017, according to forecasts by the Bureau of Resources and Energy Economics.
Senior government sources have told The Australian that the scale of the economic impact from the next wave of the boom — as projects under construction are commissioned and begin earning revenue — has been little understood.
The spectacular growth of the LNG industry will contribute $520bn to the economy in the decade from 2015, adding 2.6 per cent to national GDP and increasing the annual tax take by $11bn, according to McKinsey.
And the WA government is forecasting that its iron ore royalty income will rise by a stunning 55 per cent — from $4.4bn to $6.9bn — between 2012-13 and 2016-2017.
According to BREE, exports of thermal coal and metallurgical coal exports will increase, by 8 per cent and 4 per cent a year, respectively, until 2018.
HSBC and Commsec both believe in the Abbott bounce
HSBC
Overall, the two major parties are not announcing wholesale changes to the economic or regulatory landscape in the near-term. As such, a change of government is unlikely to have major implications for the growth, currency or interest rate outlook.
More broadly, neither major party has announced major changes to the revenue or expenditure structure of the Australian fiscal system. Australia currently has a structural budget deficit that is expected to persist at least until 2017/18. As a result, the next government is likely to face some tough choices on the structure of Australia’s tax system and the sustainability of government expenditure moving beyond the next parliamentary term.
More importantly, whoever wins the upcoming election, the completion of the election itself could provide a boost to the economy.
Julia Gillard, the former Prime-Minister and leader of the Labor Party, took the unusual option of announcing the 2013 election nine months in advance. While her replacement by Kevin Rudd changed the election date, businesses have now sat through around eight months of uncertainty over the post election regulatory environment. This has been one factor that may have held back business confidence and conditions recently (Chart 2). In addition, firms have likely held of hiring and investment until they have more certainty over the political landscape.
COMMSEC Removal of uncertainty is important for investors, businesses and consumers. Over the past five Federal Elections, both the sharemarket and Aussie dollar have been broadly flat, to slightly lower in the lead up to the poll. A similar trend is in evidence this election period. But in the past five elections both the Australian dollar and the sharemarket have lifted in the three weeks after the poll.
The best outcome on Saturday will be a clear election result. There are good reasons to expect a stronger Australian economy once election uncertainty is resolved…
CommSec expects the economy to lift once election uncertainty is removed. Certainly the housing market is already showing encouraging signs; next we would hope to see some improvement in consumer spending, business confidence and employment.
If there is a clear election result, we would certainly expect the sharemarket to lift. The Aussie dollar is a bit more problematic with Syria and US monetary policy key influences together with domestic politics. But if the Australian economy lifts, the Reserve Bank would be more reluctant to cut rates again, supporting the Aussie dollar.
Certainly there are no fears associated with a change of government. The Liberal Party/National Party coalition have had a good track record in the past as economic managers and the rigorous detail of policy costings have further engendered confidence.
The long election lead time of nine months has largely been the cause of a slowdown across the country, according to HSBC Bank Australia Limited’s chief economist Paul Bloxham and economist Adam Richardson.
In Bloxham and Richardson’s HSBC report Australian Election Observer noted that the long lead time has potentially held back business confidence in recent months, keeping the entire market slow.
“As such, whoever wins, a reduction in tax and regulatory uncertainty postelection, could provide a boost to confidence,” the report states.
“Julia Gillard, the former Prime-Minister and leader of the Labor Party, took the unusual option of announcing the 2013 election nine months in advance. While her replacement by Kevin Rudd changed the election date, businesses have now sat through around eight months of uncertainty over the postelection regulatory environment.
“This has been one factor that may have held back business confidence and conditions recently. In addition, firms have likely held of hiring and investment until they have more certainty over the political landscape.”
Tony Abbott will cut budgets (or at least appear to cut budgets). AND he will (effectively) increase public investment.
How will he perform this magic trick?
He will dress up “public” spending as “private” spending by using public-private “partnerships”, tax-farming deals, and the sale of whatever monopolies are left over after the Howard/Costello era.
The risks will still be borne by the public through take-or-pay contracts, or guarantees, or selective subsidies to raise rates of return to the levels required by the private financiers.
And the rates of return required by private financiers will be reduced by introducing a new private-sector version of the old “20/30 Rule” which will require complying superannuation funds to invest a minimum proportion of their funds in qualifying private infrastructure investments.
New taxes (such as new road tolls) will be imposed but will not be applied until projects are completed, which will be after the next election. Thus, it will be possible to borrow – and spend – against new taxes without the taxes actually having been implemented.
All of this will be a hugely wasteful way of financing public works. It will misallocate risks (like traffic risk). It use illiquid and expensive financing instruments (like project finance) when liquid government bonds would be cheaper, even after adjusting for risk transfer. It will involve vast arrangement fees and other fees. It will entrench monopolists who will gouge the taxpayer for generations to come. It will replace transparent price-based contracting with opaque build-finance-operate packages.
But it will also line the pockets of the people who matter: the finance industry (mainly in Sydney), their support industries, and the major (but not minor) contractors.
This sounds very like the PFI (Private Finance Initiative) that Blair tried in the UK. A huge waste of public money that even the Tories realise now that they're in power. Get all the spending off the public spending book and give private companies huge profits over the long term
There will be a short lived boom then next year then fundamentals will weigh housing down again.
The Libs will be absolutely forced to cut, cut cut, in order to live up to their economic tradition of being savers.
Then property will continue it's downward trend next year, and by 2016 will be 60-70% down.
Abbott will still win the next election, as the media will just blame Labor, the carbon tax, and the boats, which will be funny, seeing as they were the fucking dislikeable persons that propped it up and made it worse, and so in a roundabout way deserve it.
stinkbug omosessuale Frank Castle is a liar and a criminal. He will often deliberately take people out of context and use straw man arguments. Frank finally and unintentionally gives it up and admits he got where he is, primarily via dumb luck! See here Property will be 50-70% off by 2016.
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