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JOB’s – JOB’s – JOB’s … and WHY Political Leaders keep saying these three words …

The-EYE-BALL-Opinion-Header-2 Advertise Here
Title: “JOBS – JOBS – JOBS …”
… the reality … and WHY Political Leaders keep saying these three words …
Thought of the Day …
… Let not the hard road distract you from your purpose …

The Hon Martin FergusonMartin Ferguson – Minister for Resources, Energy and Tourism was on a ABC 24 interview Friday last – he was being asked about the Western Australian budget move to lift Mining Royalties – thus eating $2 billion worth into the Federal Governments new mining tax revenue. His response comments were the continuing Labour party line and the Novice WA Premier will feel the Fed backlash when they have to deal with diminished GST disbursements at the next round ‘piggy-bank’ splits.

The interview broadened on comments by Mr Ferguson and with his deep Unionist background – he began to pulpit talk about the only thing the ALP can talk about these days. That is of course ‘JOBS-JOBS-JOBS’ – I gotta tell you – if I hear one more Minister spruik those words – I’ll throw my dinner at the tube …

This ‘catch cry’ – JOBS-JOBS-JOBS – is directionless – the Government looks to the economic releases that rolls out weekly and then month on month – the only real positive in all this data is the Unemployment rate – and even that gives mixed signals on a monthly basis. The rate is hovering around 5% – and when compared with Spain’s latest numbers – 22% total unemployment – and included in that numbers is 45% youth unemployment – Australians have much to be thankful for.

Yes – creating JOBS is good for the economy – but you can’t just pluck them out of thin air. The Government sees JOBs as a means to fund its spending agenda. Hardly inspiring Leadership – JOB’s are a by product of Industry – Manufacturing and Commerce – if the incentives are not there – then the only market for employment is the Public Sector. I went looking for Public sector employment – and I am still looking for the research material in which to make comparisons.

By all accounts – most of the job creation since the GFC has been in the Public sector – Governments – State and Federal – boosting their employment ranks to take up the slack within the private sector … [yes, I am still looking for the data to support this.] Nevertheless – This same ‘JOB’s JOB’s JOB’s’ screech has been uttered by most Front Bench Ministers when a microphone has been shoved anywhere near them in the last week or so – from recollections – this politicised version of ‘Oi Oi Oi’ has been the same headline comment given by – Messes Conroy, Swan, the PM, Arbib, Albanese and the like.

It is becoming a reason to ask some questions about how real it all is. Along these lines the research was able to uncover some data that paints a picture …


Source: http://www.skillsinfo.gov.au/skills/LMI/

Source: http://www.skillsinfo.gov.au/skills/LMI/

The Tables above and to the left shows an Industry breakdown of employment according to the 2006 Census. Later data is still being researched. However – this data is pre GFC – and will make interesting comparisons when current data can be obtained. The Charts below show the main Government revenues and expenditures and is provided by the RBA and its database of statistics. Also below is a bar chart of OECD and RBA data relating to the Australian GDP – the RBA in $A terms – and the OECD data in US$ terms. This makes interesting reading and once again – there is mammoth disparity between the numbers.


Source: http://www.rba.gov.au/statistics/tables/index.html#overseas


Source: http://www.rba.gov.au/statistics/tables/index.html#overseas


Source: http://www.rba.gov.au/statistics/tables/index.html#overseas
… and
http://www.oecd-ilibrary.org/economics/gross-domestic-product-in-us-dollars_2074384x-table3

The ‘crow’ factor in this Governments success is the ‘unemployment’ number. Every month this number comes out and every month the Government finds a new way to say – JOBs JOBs JOBs … The WELFARE spend in 2009 has reversed – and the PAYEE collection flatline from 2009 has also again started to increase. Mr Swans rhetoric on BUDGET night about getting the 5% unemployed and disabled back into the work force to fill the jobs the market is creating – has such a desperate ring to it. 

This was and is a hollow cry – unemployment rates are at their lowest levels in a generation – and over the last 25 odd years – the Government has enticed mothers and stay at home dads into the work force to grow their payee tax collections. What they pay out on the other side in ‘child-minding’ services and other incentives – has all been a marketing exercise that has winners and losers.  Immigration as a means to grow the labour force is political suicide and demonstrates the closed minds of both side if the House.

The losers in this ‘both parents working equation’ – are the children.  The winners are Government’s – and in the middle are the mixed emotions of parents not being able to personally be there and take care of their children as they grow from babies to teenagers. Of course thee is the children not getting the benefit of parental time that they would otherwise enjoy.

There is a social cost in all this – it is transferring to the mental health debate now being faced by the  Nation – for when the understanding is faced and understood – it is easy to recognise how society is now dependant on dual incomes to pay for the mortgage and normal cost of living expenses.

Banks have shoveled out the easy cash through Credit Card limits to help cater for this splurge of income as credit commitments rise just as quickly as income does.  How seriously has anyone considered the thought of a parent giving up work to stay at home and raise a real family – has that option become so unthinkable?

SO – the JOB’s-JOB’s-JOB’s play on words cuts no sway with my opinion – the Governments – on both sides – have played this game and as one looks to the ALP – where almost every Minister and backbencher has come from some type of Union exposure – you would think that a more conciliatory debate would emanate from that side of the house.

It is my opinion that Families need help – they are under pressure on so many fronts – home mortgage – electricity costs – food – petrol – lack of savings – education coasts – child care costs – all directly linked to the household spend. Nobody ask’s the question – who is taking care of the children – third parties – day-care – schools – and none of them give a damn about your children like you do. This social cost is a sleeper – mental health is a by product – so the JOB’s-JOB’s-JOBs – call by a Labour Government has no creditability with me on the ‘family values’ debate.

You show me a Government prepared to fight for the family on real issues – to try and keep family values intact – then I’ll tell you about a Government I am prepared to support. 

What is wrong with splitting family income – to reduce the tax burden and allow parents to chose to stay at home it they want.

I tell you – children are being raised by the State or by third parties in many situations now – and it will only get worse as this money trap lifestyle where Banks and Government Tax collectors rub their hands together with glee – all to balance the outgoing’s on the other side.

I tell ya … for many years Government Budgets have been framed around expenditure and not income.  As the above bar charts show – when the ‘payee‘ revenue flatlines next time – think before you press the replay button on JOB’s JOB’s JOB’s – and think about how to start a procedure to build real policies that help all Australians.

_______________________________

The EYE-BALL …

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  1. Herman
    May 23, 2011 at 8:19 am

    Here I see two central arguments. The first is fiscal stabilisers. The second is an addiction to GDP growth at any cost. Possibly they are the same.

    A fiscal stabiliser is a government policy that automatically stimulates the economy in recession and automatically returns the economy to surplus in periods of economic growth during the economic cycle. The best example is unemployment benefits. Should industry stand down employees due to economic uncertainty, then the government will pay those workers a corresponding unemployment benefit. They also receive lower company tax and lower income tax. In reverse when employment grows government outlays from social security falls while both personal tax and company tax receipts rise. Therefore in the perfect Keynesian way those policies counterbalance with deficit or surplus being the balancing item. At times there are vicious leads and lags, particularly brought about by uncertainty.

    On GDP growth, this is a feel good number. What really matters is per capita GDP growth. It has a long term trend increase of approx 1.75% pa. Is that number deflated when inflation is increasing at approx 3% (RBA target inflation). No. How many consumers can observe increased spending power or increased savings ratio due to this trend increase in GDP?

    What is so central to all of this is the distribution of that GDP growth. The share for Shareholders, the portion for wage earners, the portion for social policy and initiatives (government) and so on.

    This government is a big spending government. That is established. Since Nov 2007, total government debts have got to the point where the treasurer now needs to increase the debt ceiling. They are reliant on new taxes. Most of this can be brought down to polls and popularity. In recent polls as the opposition pulls in front, all ministers try to say they do not care about polls, but they are addicted to 3 year election cycle, and being in a winning position when elections do come around. They tend to take the electorate for fools, always wanting to appeal to their livelihood of jobs, jobs, jobs and GDP growth.

    Is the electorate so fickle as to be fooled by such short sightedness?

  2. yoda
    May 23, 2011 at 10:42 am

    I was more interested in you throwing your dinner at the tube. It may cost jobs,jobs,jobs for those meals on wheels people if you do that!

  3. May 23, 2011 at 11:02 am

    Witty and cryptic and oh so YODA …

    The mass’s are happy hearing whatever people want to tell us – and soon … oh so soon … it becomes the gospel truth – the numbing of the mind has taken these mass’s to the place where intelligencia is a forgotten past-time – think YODA – you might be king of these numbed-down hooray cheer leaders …

    When was the last time you heard anything of substance and something that had relevance from an Australian Politician … you give me an agreed answer to that question and I will eat the humble pie in front of you and all those mass’s who might wake from their slumber to see such an event …

  4. May 23, 2011 at 11:09 am

    Your take on the story is a tangent to it’s intent – disparity between OECD and RBA data is important and needs to be understood why each others numbers are so far apart …

    Your take in the realism of what GDP represents as a spending exercise and a feel-good for Political and economic book-worms … it can only be used as a measure to spending and that takes us to why GDP becomes important.

    What if Australians saved 15% of their after tax earn rather than use it to pay down the credit card spend that contributes to the GDP – how would Governments think of a plan to have us borrow more to take up the GDP impact so they can spruik to the world about a ‘growing economy’ as opposed to a ‘contracting economy’

    THE GDP is a measure and if it is debt fuelled – what is the other side to the equation …

  5. Herman
    May 23, 2011 at 2:47 pm

    I simply give little credibility to either source. ABS and RBA often conflict. OECD draws their stats essentially from Australian sources and often need to re work them to draw comparatives.

    Sadly even what are termed as key indicators generally require interpretation. Great example is Unemployment rate. It is based on statistical sampling, and smoothed. This is why the Job adverstisement series is often referred to as a lead indicator. Far too often ABS data is freakishly high or unexpectedly low.

    On saving ratio Australia has a historically low % of GDP (comparatively on a world basis). At this time retailers are putting down the decrease in discretionary consumer spending to paying off credit card debt. That is supported by aggregate credit card outstanding by RBA.

    Again this is not diffusing any question or query. That is economics. It is not a pure science (mathematic). It is an applied science. There is not a simple formula, inflation equals, or unemployment equals. Where this science is currently at; is more like low unemployment is correlated to inflation by approximately ?% (Negative correlation of unemployment to inflation). That is intuitive. This is why the banks economists often quoted on current affairs style programmes appear to state the obvious or can be very vague. We believe that the RBA will raise official rates by???? within a time horizon. All practioners including markets are hypothesising rather than knowing. WHat does that say about politicians?

  6. yoda
    May 23, 2011 at 2:47 pm

    You eating pie would not be a moment to wake up for.
    Alternatively with regard my being King, just remember in the land of the blind, he with “one eye” is King untill someone with 2 eyes comes along.

    My spiritist form says I have a third eye.
    Unfortunately you won’t qualify because two arseholes gets you up shit creek!

  7. yoda
    May 23, 2011 at 4:24 pm

    This debate came about because I indicated that the Australian savings ratio in the past 2 years has risen to 10%, one of the highest in the world. Eyeball refused to believe it. I then quoted numerous sources, including the deputy governor of the RBA. I then explained to Eyeball how statistics mislead and in his case he denigated Australian Banks as having a high ratio of wholesale to retail funds base. I happen to know this is not the case but the issue is so misleading as banks internally allocate with no laid down methology. This example confused Eyeball because basically he did not understand, that he did not understand.
    He will reply to this by defending his statistics, it does not matter, because his subjectivity was blinded by both his arrogance and his inability to understand the problem. He is currently running everywhere to clarify the OECD vs RBA vs the Hopscotch kids, the inference is that he can’t understand what even the Reserve Bank does not understand. He never the less will go with his rhetoric and bias and then he doesn’t see that he is no different to Politicians and their spins and biases. I explain this simply as humanity!

  8. May 23, 2011 at 4:37 pm

    The squirt came out all fiesty and used his light sabre to try and trim the edges of the debate …

    The chart below with the accompayning comments is what the squirt is on about:
    ______________________________________

    AFI Off Shore Borrowings

    This chart is most telling – the straight line spike in the middle of the GFC when Lehman’s went under – highlights to what degree Australian Banks had to go to the Global wholesale funding window to borrow wholesale funds to cover domestic savings shortfall. These funds remain in the Banks deposit base and are rolled over on a regular basis. With domestic Home lending still the only real asset growth in the Australian Financial sector – apart from Government borrowings and Credit Card expenditure … these wholesale funds are the Australian Banks achilles heel when it comes to interest rate stability in the home loan sector.

    There is a big plus for the Banks holding these offshore borrowings in US$ terms – the A$ appreciation has seen a 40% capital gain – meaning that the principal owed has diminished in A$ terms thus bring a massive windfall to the Banks.

    ________________________________________
    The point is that Australian Banks are reliant on wholesale offshore funds – every Bank is tapped into this sorce of professional money pool – as the demand around the world grows in public debt (i.e. that’s Governments Borrowings squirt ,,,) the cost of this pool will rise and as a consequence – Australian Banks will have to manage the cost of thes efunds with respect to their domestic lending costs …

    It’s a complex debate – but when the RBA Deputy comes out and relies on a set of numbers to prove a point at a well groomed dinner with Financial wizz kids – the data needs to be correct – and the spam in that debate is that the OECD numbers for the same period – obtained from presumable the same sources – re completely at odds with the point that the RBA spokesperson was telling his audience ..

    So for the squirts edification – when the RBA confirms the reason for the descrepiencies … the result will be posted hereto …

  9. yoda
    May 23, 2011 at 9:33 pm

    Dare I say spoken like a politician! nearly even a bit eachway, your looking more like one every day!

    PS If you knew anything about funding, I could create an argument that wholesale funding by underwritten note issues are actually more stable than some deposits classified as retail. You will find that whatever short term deposits are being taken by our banking system, they will have a matching undrawn committed facilities.
    The banks have what you call an ALCO which is Assest Liability Management Committee,
    This ALCO is a sophisticated process that identifies basis risk, interest rate risk and is managed dynamically on an interest income “outcome”. You would be surprised at the management process involved in this endeavour.
    To naively think that banks’ do not manage this risk only illustrates your lack of understanding of how such generic statements of mismatch are misused by commentators who do not understand that they do not understand.

  10. May 23, 2011 at 9:49 pm

    Turning this debate technical with intent to confuse and shoot over the capabale knowledge of laymen – let me just say to you to bring the debate from the lofty levels you want to go to – wholesale funding is not teh problem in this debate – the cost of those funds are – any Bank can borrow funds when they need it – the variable is cost and that os a risk weighted decision – so when Australian Banks are downgeaded because of their exposure to wholesale funds – and that appears to have bene a concession on your part – i.e. you now agree that the Banks have wholesale exposure – with a lower credit rating the cost of those funds will go up and that then becomes a round table swing – i.e. one begets the other …

    What ever ALCO is and how it is structured for each individual Bank – and how they manage liability maturity and exposure – is what generates Bank profitability – get it right and profits go up – get it wrong and borrowers pay and shareholder returns diminish …

    At the lebel you served – Treasurer of a regional and small Bank – you have said that your ideas for funding and management of the Banks liability exposures were so far advanced to what they could come upwith – they contacted you first to give them ideas – so drawing a line – I would not place a whole lot of faith in Bank staff being too clever when it comes to advanced funding modules –

    Please keep the debate simple … o those that don’t understand – can understand ….

  11. yoda
    May 25, 2011 at 10:11 am

    Conflicting RBA/OECD data on “Household Savings Ratios” used in a speech by Mr Philip Lowe – Feb 2011.
    ABS Interesting( conflicts with OECD)again the point is lost on you)You have made your opinion and convicted and hung the perpetrators…too late if you are wrong, just keep saying your right and defend your position, its seems that no one understands, that they don’t understand or do they ? and like you dont want to admit they dont understand that they dont understand, by the way, I understand that I dont understand that puts me way ahead of you.I haven’t accused anybody. Maybe you were involved in the Catholic inquistion in a past life, would explain why you don’t let the facts influence your opinion.

    You also said the following;
    “At the lebel(assume level) you served – Treasurer of a regional and small Bank – you have said that your ideas for funding and management of the Banks liability exposures were so far advanced to what they could come upwith – they contacted you first to give them ideas – so drawing a line – I would not place a whole lot of faith in etc”
    This is a total misquote and shows again that you “don’t listen”.
    My comment was quite simply “they did not know or understand how individual banks classified the difference between wholesale and retail”
    Further to your disparagement I also worked in the CBA’s Investment & Economic Research Division to reinforce my opinion of how banks classified these transactions”
    I also note that your graph refers to AFI (Australian Financial Institutions)and as such is I would assume inclusive of NBFI’s as well?

  12. security
    August 4, 2011 at 8:30 am

    Your information Helped me Thanks you Much

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