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EYE-BALL Guru on – Joe Hockey’s misfires on Welfare – he should be made to serve a lifetime on welfare existence …

April 19, 2012
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Title:
Joe Hockey’s misfires on Welfare – he should be made to serve a lifetime on welfare existence …
Fereral Opposition Treasury spokesperson Joe Hockey came out overnight whilst in London on a Political Jaunt, and made statements saying that Australia’s welfare spend should be more aligned with our Asian trade partners.  A full text of his speech delivered to the Institute of Economic Affairs  – London,  can be read via this link.

Included in comments in a press conference after his speech and on ABC’s Lateline – he went on to say that the cause of the global financial crisis is aligned with the result of ‘parents not being able to say no’.

His live ABC interview can be read and viewed using this link.

An extraction of Federal Government Budget numbers since John Howard took office in 1996 – and as provided by the Reserve Bank database of statistical information – shows a decline in ‘welfare’ spending as a percentage of the total budget spend in the last three years.  See chart below – click on the chart to view a larger image in a new window.

This chart data is extracted from the following table of reported data: also you can click on the chart to view a larger image in a new window.

As can be seen from the ‘WELFARE’ spend over the last 15 years – again click on image to view a larger table in a seperate window – Howard’s spend on welfare – mainly targeted at middle and upper class income earners – drove up to welfare spend.  How Mr Hockey can now claim after some 13 years in office – he expects his policies in any new Government to reverse these policies.   Mr Hockey wants to align Australia’s welfare and social policies with emerging Third World economies – it is beyond comprehension to consider on what planet Mr Hockey’s statements make any sense.

From the year 2000 and up until the Howard Government was removed from office – the WELFARE spend was well over 40% of the total Government Budget expenditure.  Since that time the spend has reduced to 33% in a 4 year declining value from the 41+% in the last year of Howard’s Government.

What more is Mr Hockey expecting?

When the Governments tax revenues diminish as they are at the moment – why do Governments always look to the Welfare sector to trim expenditures?

It can be argued that during the boom times when surplus’ over the three years between 2006 and 2008 measured some $77 billion – Mr Howard allowed wealthy individuals to pump $Millions into super and raised all the means test levels for health, and social welfare that alowed the wealthy and upper class to tap into the welfare purse.

An example – I know is a retired public servant who was a ‘Scrooge’ with his money all his life.  He invested well and owned a number of taxi’s when he retired.  That retirement is some 10 years old and he now aged 70.  He currently dabbles in equities and grants options against his equity positions, and still has taxies.  He earns very good annual income from his vested activities.   Yet – despite his immense wealth and annual income he pays no taxes on any of his activities.   He even boasts at how stupid Howard was when he introduced these wealthy welfare reforms.

The other side of this equation is the single unemployed person – they receives a fortnightly pension of $490 – add some rent assistance of $110 and his annual income is $15,600 – and they currently pay 15c in the dollar tax for all income above $6,000 – (excludes rent assistance).    That brings the disposable income back to around $525 a fortnight.

Rent across Australia varies – but a mean average for city dwelling for a single person would be $200 a week – in the country this might be as low as $125 a week.   Take the city cost of rent of $400 a fortnight – this leaves the welfare recipient $125 a fortnight to live on.

Prey tell Mr Hockey – if you think you can live on the unemployed welfare pension – or any other pension for that matter – why don’t you give us the proof of a human trial on your part and just show how it can be done.   This same poverty existence applies and extends to aged pensioners and disability welfare recipients as well.   These latter recipients are unable to work – how can they help themselves?

Howard’s Government and those since and before have their expenditures all about-face.   Government is the only ‘business’ in existence that forms its budget on expenditure and then goes about finding ways in how to fund the expenditure.  It is ass about-face … business looks to revenues before they make any decisions on expenditure.  Once an expenditure policy is introduced it has consequences for decades to come unless it is scraped or altered as circumstances come to hand.

This single welfare policy initiative announcement by Mr Hockey has rendered his party as misers and penny pinches.  Their current expenditure policy’s have a $70 billion black hole – that is to say that they have not been able to find the budget savings or revenues to cover their promised expenditures.  All this from a Government who believed the wealthy sector of Australia needed a leg-up when the budgets were in surplus’.

A Review of Parliamentary Members Credentials:

  1. Fact 1: Name any Minister of Member of Parliament who has been Chairman of the Board, of even the CEO or MD of a large public listed company.  Answer – None.
  2. Fact 2:  Name any Minister of Member of Parliament who has any Business or Financial credentials obtained as an employed person in the private sector – other than managing their own personal financial position.  Answer – very few.
  3. Fact 3: Why does Craig Thompson sit on a Review Panel  that oversees the operations of the Reserve Bank?  Who on that panel has financial markets credentials, or any other financial background that would give them knowledge to understand the depth and breadth of the RBA operations – in fact when the panel is reviewed below – none have any financial markets experience – none have intricate knowledge of the workings of international ‘swap’ and derivative’ markets – how could they possibly understand the intricate workings of the RBA on a day-to-day basis.

The Members who sit on this panel include: [Members have been linked to their Parliamentary web page profiles where their credentials and bio can be viewed – or not.]

Ms Julie Owens MP as Chair – ALP

Qualifications and occupation before entering Federal Parliament

  • BA (Qld Conservatorium of Music), MBA (Syd).
  • Production Manager, Lyric Opera of Queensland 1985-89.
  • Senior Program Officer, Australia Council 1989-93.
  • Small business owner 1994-2000.
  • Chief Executive Officer, Association of Independent Record Labels 2000-04.

Mr Steven Ciobo MP as Deputy Chair – LNP

Qualifications and occupation before entering Federal Parliament

  • LLB, BComm (Bond University), LLM (Queensland University of Technology).
  • Senior Associate, Australasian Institute of Banking and Finance.
  • Consultant, Coopers and Lybrand 1996-97.
  • Senior Consultant, Pricewaterhouse Coopers 1998-2000.
  • Adviser to Senator B Mason 2000-01.

Mr Scott Buchholz MP as Member – LNP

Qualifications and occupation before entering Federal Parliament

  • Ringer 1985-87.
  • Agri-finance manager 1989-91.
  • Managing director from 1992.
  • Chief of Staff to Senator BTG Joyce.

Mr Stephen Jones MP as Member – ALP

Qualifications and occupation before entering Federal Parliament

  • BA (Wollongong), LLB (Macq.)
  • Research officer, Australian Quadriplegic Association; disability support worker and youth worker 1985-91.
  • Various positions incl. NSW Branch Secretary and Communications Division Secretary, Community and Public Sector Union 1993-2004.
  • Lawyer, Australian Council of Trade Unions 2004-05.
  • National Secretary, Community and Public Sector Union 2005-10.

Dr Andrew Leigh MP as Member – ALP

Qualifications and occupation before entering Federal Parliament

  • BA(Hons), LLB(Hons)(Syd.), MPA, PhD (Harvard).
  • Lawyer, Minter Ellison, Sydney and London 1995-1997.
  • High Court Associate to Justice Michael Kirby 1997-98.
  • Senior Trade Adviser to Senator the Hon. PFS Cook 1998-2000.
  • Research Fellow, Progressive Policy Institute, Washington DC, 2001.
  • Professor of Economics, Australian National University 2004-10.
  • Principal Adviser, Australian Treasury 2008-09.

Ms Kelly O’Dwyer MP as Member – LNP

Qualifications and occupation before entering Federal Parliament

  • BA, LLB (Hons)(Melb).
  • Lawyer, Freehills 2001-04.
  • Adviser to the Federal Treasurer, the Hon. PH Costello, MP 2004-05; Senior Adviser 2005-07.
  • Executive, National Australia Bank 2007-09.

Mr Craig Thompson MP as Member – ALP

Qualifications and occupation before entering Federal Parliament

  • BComm (UNSW), LLB (UTS).
  • Industrial Officer and Assistant Secretary, Health Services Union (NSW).
  • National Secretary, Health Services Union 2002-07.

Then there are the Supplementary Members –

Mr Adan Bandt MP – Greens

Qualifications and occupation before entering Federal Parliament

  • BA(Hons)(Murdoch), PhD (Monash).
  • Research officer, Swinburne Student Union 1996.
  • Research officer, Royal Melbourne Institute of Technology Student Union 1997.
  • Solicitor and Partner, Slater and Gordon 1997-2008.
  • Barrister 2008-10.

Mr Tony Smith MP – LNP

Qualifications and occupation before entering Federal Parliament

  • BA(Hons), BComm (Melb).
  • Research Assistant, Institute of Public Affairs 1989-90.
  • Media Adviser to the Hon. P Costello, MP 1990-98.
  • Senior Political Adviser to the Treasurer, the Hon P Costello, MP 1998-2001.

Each of these named members sitting on the RBA Review Committee receive a substantial boost to their salaries for the task assigned – yet the question has to be asked – what do they actually review about the RBA’s activities?  WHat searching questions do they ask? What is their base level knowledge in understanding the RBA’s daily and overall functions?

I challenge any one of the above named Members sitting on the RBA’s Annual Report for 2011 review panel to debate their understanding of the RBA functions, and day-to-day monetary policy ‘tweaks’ the RBA considers during their market activities – including domestic and offshore activities, currency settings and interventions, and management and debt structures.

I would suggest that if such a test was presented – none would pass with a ‘B’ or ‘A’ pass mark.  Then why are they sitting in review of the RBA’s operations?

The RBA Feb 2012 Review in question can be read as a PDF file and as presented on the Australian Parliament website – here.

The ‘Terms of Reference’ as quoted in the Report states:

The House of Representatives Standing Committee on Economics is empowered
to inquire into, and report on, the annual reports of government departments and
authorities tabled in the House that stand referred to the committee for any
inquiry the committee may wish to make. The reports stand referred in accordance
with the schedule tabled by the Speaker to record the areas of responsibility of the
committee.

The review report goes on to make reference to the Background and the ‘Scope and conduct of the review – and as presented below:

Background

1.1

The House of Representatives Standing Committee on Economics
(the committee) is responsible for scrutinising the Reserve Bank of
Australia (RBA) and for ensuring its transparency and accountability to
the Parliament, the community, and the financial sector.

1.2

The appearance by the Governor of the RBA at biannual public hearings of
the committee is an important element of the RBA’s accountability
framework. The details of this framework are set out in the Statement on
the Conduct of Monetary Policy, agreed between the Treasurer, the Hon
Wayne Swan, MP, and the RBA Governor, Mr Glenn Stevens. The
statement formalises the biannual appearance before the committee. The
statement, which is reproduced at Appendix B, states:
The Governor has also indicated that he plans to continue the
practice of making himself available to report on the conduct of
monetary policy twice a year to the House of Representatives
Standing Committee on Economics.

The Treasurer expresses support for the continuation of these
arrangements, through which the transparency and accountability
of the Reserve Bank’s conduct of monetary policy are in line with
international best practice. These arrangements enhance the
public’s confidence in the independence and integrity of the
monetary policy process.

1.3

A second procedural mechanism for achieving this accountability is set
out in the Standing Orders of the House of Representatives, which provide
for the referral of annual reports within a committee’s area of portfolio
responsibility for any inquiry the committee may wish to make.
Accordingly, the committee may inquire into aspects of the annual report
of the RBA.

Scope and conduct of the review

1.4

The fourth public hearing of the committee with the RBA during the 43rd
Parliament was held in Sydney on 24 February 2012.
1.5 The audio proceedings of the hearing were webcast over the internet,
through the Parliament’s website, allowing interested parties to listen to
the proceedings as they occurred. The transcript of the hearing is available
on the committee’s website.2

1.6

Before the hearing, the committee received a private briefing from
Ms Su-Lin Ong, Managing Director, Head of AU/NZ Economics & Fixed
Income Strategy, RBC Capital Markets. This briefing provided valuable
background information for the committee and perspectives on issues for
discussion at the public hearing. The committee appreciates Ms Ong’s
cooperation and assistance.

1.7
Public hearings with the RBA continue to bring issues of monetary policy
into the public arena, and have assisted in providing a public face to
parliamentary committees and the RBA. The committee welcomes the
Governor’s frank and open comments at the hearings. In addition, the
hearings are an important means whereby financial markets can be better
informed on the current thinking of the RBA.

1.8

The report focuses on matters raised at the public hearing, and also draws
on issues raised in the RBA’s Statement on Monetary Policy. The Statement
on Monetary Policy may be viewed through the RBA’s website.3

The Hansard transcript of this Committee meeting with the RBA Governor and his Deputy’s held on the 24th Feb 2012 can be read in full – here.

It is a must read to get some idea of the benign questions the Committee ask of the RBA Governor.

For Example – not one question was asked about the ‘cash and carry’ trade whereby offshore investors can buy the A$ and invest in the domestic interest rate differentials as compared with their own domestic interest rate levels – and what impact that is having on the Australian economy.

This is a very relevantand important question of RBA policy with respect to the mandate they have targeting inflation and the using of interest rates to moderate inflationary pressures.

None one of the Committee members understand this ‘ripping off’ of Australia’s wealth by the back-door – nor do they have the knowledge base to ask the RBA Governor to explain why Australia’s mortgage belt continue to be forced to pay interest rate costs far in excess of our major trading partners.

This ‘cash and carry’ trade acts as a siphon – stripping wealth from Australia and Australian’s and depositing that wealth in foreign lands – largely at a cost to the mortgagee holders in Australia.

‘Thunderheads’ like the named parties above, and sitting on these types of review panels/committees do no service to the Australian Public.  They have the appearance of propriety interest’s being served – but if they don’t understand the way markets work, nor how they impact on economies – why allow those without the base knowledge sit on these panels.

It is noted that some experts from the private sector came and gave the Panel statements and answered questions from the panel.

The Panel knows it is deficient in the base level knowledge required to ask relevant and searching questions of the RBA Governor.   This is a massive failing within all Parliamentary Committee’s in that they get divided up among the Members like poker stakes, and in return all they have to do is turn up and grunt a few times when the Chair ask’s for a vote count.  Totally bogus – and to the detriment of the Australian parliamentary process and the welfare of the Australian economy.

____________________________________________

Back to Mr Hockey as the Opposition Treasury Spokesperson – he should also be made to take the test – I assure that given his credentials – see below – he would bring up the rear in result scores.

Mr Joe Hockey – MP – LNP

Qualifications and occupation before entering Federal Parliament

  • BA, LLB (Syd).
  • Director of Policy to the Premier of New South Wales.
  • Banking and finance lawyer, Corrs Chambers Westgarth.

His ‘Banking and Finance’ lawyer qualification would need some explanation on the strength of his dismal performance and ability to fund his party’s stated policies objectives.  Also – he was 29 when he went into Politics as the Member for Nth Sydney in 1996 – he was also the former State President of the Young Liberal Movement, (NSW) before he went into Federal Parliament.

So – at such a tender age, and as a ‘Banking and finance lawyer, with Corrs Chambers Westgarth.’ – what are his real financial credentials and his depth of knowledge to espouse commentary about welfare expenditures in a budgetary context – and to serve as the Opposition spokesperson on Treasury?

Especially – when the Opposition have eminent barrister and former well respected Merchant Banker Malcolm Turnbull sitting on the bench.

As a Political observer and commentator – and a financial Markets operative of some 30 years – with funds management and global market experience, I am qualified to speak on these matters.

I belly laugh at Hockey’s attempts along with his more elder partner in Mr Robb as they both fumble and usurper themselves when trying to explain the LNP’s budgetary position.  In the same light – it is obvious that Mr Abbott the Leader of the Opposition is equally ignorant of the finer points of financial management.    God help us all if these clowns do take charge of the Treasury.

Perhaps an image that did the rounds a while ago gives some perspective on Mr Hockey’s budgetary understandings – he uses monopoly money –

Not that the existing Treasurer in Mr Swan is any more aware of the workings of the RBA and its bullshit mandate that has no relevance to the Global economy, nor how the Australian economy is sliding backwards into recession – all due to the inability of Mr Swan to deal with or find a workable policy to stop the A$ making everything about Australia uncompetitive.

____________________________________________

The EYE-BALL Guru …

 

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  1. click shrink
    July 21, 2012 at 11:59 am

    Thanks, great post. Have bookmarked you and will be back.

  1. April 20, 2012 at 12:36 pm
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