A recent ABC investigation has obtained a cabinet document through Freedom of Information (FOI) laws in regards to Industrial Relation Law reforms. It’s nothing new really considering most of what it mentions can be found at the International Monetary Fund (IMF) website such as 2015 article IV consultation with Australia. To me it looks as though it is reported on to get the people used to the idea that this will fix the economy. How about taking some money from the Defence (attack) budget and put it into creating jobs instead of giving it to the weapons manufacturing companies, or we could stop giving corporations tax breaks.
Prime Minister Turnbull said, “I think over time you will see a move to a more flexible workplace”.
This will happen no matter what because a flexible workplace means casual workers will share working a 40 hour week. So 2 workers working 20 hours/week as casual means more money for the company as they don’t pay holiday loading for starters, and the government just added a job to the dodgy unemployment rate.
The document states that the US is in recovery;
“The US has been a bright spot as a strong and broad based economic recovery has taken place”.
The US economy is that strong many countries are dumping US treasury bonds because there is less need to hold them for trade purposes. Some nations are also concerned that the Federal Reserve’s money printing is devaluing their US treasury bonds. Countries are trading with currencies that by-pass the need to use US dollars.
The document states that low interest rates are good for housing;
“Sustained low interest rates continue to encourage record levels of residential investment”.
Record levels of investment lead to a housing bubble that has to ‘pop’. This is agreed by Vernon Smith (a Nobel Prize winner) who suggests the current bubble in Sydney and Melbourne is unsustainable.
The document states there are positives;
“On the other hand, surveys of business plans released since Budget have remained very soft. But there are positive signs, with healthy corporate profits and capacity utilisation at above average rates providing some confidence that will see a lift in activity”.
Healthy corporate profits from monetary policy in the share markets to increase assets values do not mean a strong economy. Those healthy profits usually go to pay dividends or are given out as bonuses to the Executives because the share price is going up.
Looking at this article and the ‘document’ it looks as though the government rely a lot on future positive projections and what could be instead of looking at all the possibilities whether good or bad. We don’t want to scare the public type of thing as suggested in a paper to the IMF by Timothy Irwin.
According to Timothy Irwin’s working paper to the IMF, ‘Getting the dog to bark: Disclosing fiscal risks from the financial sector’, he suggests that governments don’t always report correctly on financial risks before or after a crisis;
“Several factors contributed to the absence of warnings. One, no doubt, was the tendency of governments, like companies, to downplay possible problems. In advanced economies, governments may also have thought that the chance of a financial crisis was extremely low and that the risks were too small to be worth discussing. In addition, much of the risk arose from guarantees that were implicit (that is, not written in law or contract), and governments may have feared that disclosure would strengthen the guarantees, weakening their own ability to resist demands for bailouts and worsening moral hazard (risk taking by banks and their creditors caused by the belief that they will be bailed out). Finally, during the crisis, if not before, governments may have feared that publishing bad news would start a bank run”.
The government to me is just another large corporation. When something good happens they say they are responsible, but when something bad happens they blame external sources just like corporations do. The people are just resources to them and nothing else. So next time you are told by a government what to do, ask why, and ask to see the proof? Don’t rely on an official to tell you what to think or believe. Remember to ask Who, What, When, Where, Why, and How?