What is the real state of the economy?

[Maggie5]

no

the future fund was set up to start to cover other debts we already incurred

Source? Link?

 

[Max zero]

I've been to China & they are literally choking to death on their economic miracle.

Its been said that for the worlds population to live in a comfortable western style middle class we will need the resources of 9 Earths. Again all this 'development' is simply unsustainable. We need to change how we measure our economic growth. We need to account for the environmental damage we are causing. We need to value quality of life more than the value of the rubbish we buy & waste, & often dont need.

Simple really

Would they rather go back to living on farms?

You may well be right. So you suggest we tell them to stop progress?

You want to deny them the lifestyle you yourself enjoy?

 

[Power Raid]

Source? Link?

http://www.futurefund.gov.au/__data/assets/pdf_file/0020/965/FutureFundAnnualReport_v5.pdf

The Future Fund was established to make provision
for unfunded superannuation liabilities that will become
payable during the period when an ageing population
is likely to place significant pressure on the Australian
Government’s finances.

http://www.futurefund.gov.au/__data/assets/pdf_file/0020/965/FutureFundAnnualReport_v5.pdf


Govt didn't have to pay super into accounts like the rest of industry. Rather they gave you an IOU number on a piece of paper and just hoped they had enough in the future to cover it. Yep, just another intergeneration con. but hey, kids can't vote so f em (their view, not mine).

 

[Power Raid]

Cool explanation. Can you elaborate?

when a nation spends more than they earn over long periods or in large amounts the economy suffers. The rich and established do well during these periods but the youth, the disadvantaged and the poor suffer the most.

in your example a person borrows money, receives the benefit of the asset and pays it back. It is perfectly fair.

In a nations example, the money is borrowed to prop up the asset values of the established and then the next generation have to pay back the money in a climate of lower wages, lower opportunity and a market with higher subsidised asset values.

I simply believe we should let the rich and grey rinse take their medicine in downturns. I don't see why the youth, the disadvantaged and the poor should prop up the asset prices of the rich and established or repay their debt whilst earning less or having less opportunity.

 

[Maggie5]

http://www.futurefund.gov.au/__data/assets/pdf_file/0020/965/FutureFundAnnualReport_v5.pdf

The Future Fund was established to make provision
for unfunded superannuation liabilities that will become
payable during the period when an ageing population
is likely to place significant pressure on the Australian
Government’s finances.
http://www.futurefund.gov.au/__data/assets/pdf_file/0020/965/FutureFundAnnualReport_v5.pdf
Govt didn't have to pay super into accounts like the rest of industry. Rather they gave you an IOU number on a piece of paper and just hoped they had enough in the future to cover it. Yep, just another intergeneration con. but hey, kids can't vote so f em (their view, not mine).

Huh? So they have set aside money to provide for it? What is wrong with that?

 

[Power Raid]

Huh? So they have set aside money to provide for it? What is wrong with that?

nothing, it is a good thing

 

[Power Raid]

if you back back through the comments, my post responded to a post of how could we not save money during the biggest boom the nation has seen.

but we did having paid off our last generation of labor's debt and even had a surplus of $120b and and education fund of $10b. evidencing we can save with a bit of discipline. unfortunately we then went on to spend $360b more than we have earned.

our sovereign wealth fund can not be classified as savings as it doesn't cover all our unfunded super liabilities.

 

[geelong_boy]

if you back back through the comments, my post responded to a post of how could we not save money during the biggest boom the nation has seen.

but we did having paid off our last generation of labor's debt and even had a surplus of $120b and and education fund of $10b. evidencing we can save with a bit of discipline. unfortunately we then went on to spend $360b more than we have earned.

our sovereign wealth fund can not be classified as savings as it doesn't cover all our unfunded super liabilities.

When you write things like the 'last generation of labor's debt' you do realise that almost half of that was from the Fraser/Howard government, yes?

 

[Power Raid]

When you write things like the 'last generation of labor's debt' you do realise that almost half of that was from the Fraser/Howard government, yes?

fair comment

I am also on record of saying the Keating debt was worth the pain as he modernised this nation. Fraser, Rudd, Gillard and now Abbott have caused pain for no gain.

 

[Elroo]

if you back back through the comments, my post responded to a post of how could we not save money during the biggest boom the nation has seen.

but we did having paid off our last generation of labor's debt and even had a surplus of $120b and and education fund of $10b. evidencing we can save with a bit of discipline. unfortunately we then went on to spend $360b more than we have earned.

our sovereign wealth fund can not be classified as savings as it doesn't cover all our unfunded super liabilities.

What $120 billion surplus?

 

[Power Raid]

What $120 billion surplus?

$120b in net assets would be more accurate

It was one of the reasons the future fund was established as, I understand, the australian federal government would of had to hand back the funds to the states. instead, they chose to crystalise the unfunded super liabilities which were paid out of treasury as they are called. by doing this, they crystalised the debt and thus could hold onto the capital. I can't recall how big the fund was when we had the biggest net asset position but at a guess $75b plus the $10b education fund. If the numbers are correct, that leaves $35b.

 

[GuruJane]

fair comment

I am also on record of saying the Keating debt was worth the pain as he modernised this nation. Fraser, Rudd, Gillard and now Abbott have caused pain for no gain.

My recollection is that |Rudd and Swan spent all the money Costello put into the education and health funds?

 

[Power Raid]

My recollection is that |Rudd and Swan spent all the money Costello put into the education and health funds?

I think your right

That said, all I am suggesting is we did save during the biggest boom in our history but we look pretty foolish given we gave all that hard work back and more.

 

[Long Live HFC]

In a nations example, the money is borrowed to prop up the asset values of the established and then the next generation have to pay back the money in a climate of lower wages, lower opportunity and a market with higher subsidised asset values.

I simply believe we should let the rich and grey rinse take their medicine in downturns. I don't see why the youth, the disadvantaged and the poor should prop up the asset prices of the rich and established or repay their debt whilst earning less or having less opportunity.

this isn't a fair representation at all; our recent deficit spendings were to 'prop up' the labour market, by avoiding a recession (a period when the rich and grey rise certainly aren't the ones bearing the brunt of the bad medicine).

it's monetary policy that 'props up' asset values.

 

[madmug]

Would they rather go back to living on farms?

You may well be right. So you suggest we tell them to stop progress?

You want to deny them the lifestyle you yourself enjoy?

I might ask who is really improving their standard of living in China?

At the rate they are shooting corrupt officials, it probably tells you!

Anyway, what is the outcome if we continue this relentless drive to production & export in China & India? I've already mentioned the comment that the world cannot sustain 7 billion people in the middle class given they way we produce things. We simply dont have the resources on the planet. Let alone can we handle the environmental devastation being reeked.

The way we measure growth in 'economics' must include all the costs of production, including environmental costs. We will pay for it at some stage, one way or another.

 

[Power Raid]

this isn't a fair representation at all; our recent deficit spendings were to 'prop up' the labour market, by avoiding a recession (a period when the rich and grey rise certainly aren't the ones bearing the brunt of the bad medicine).

it's monetary policy that 'props up' asset values.

monetary and fiscal policies are intertwined. That's why the RBA had to keep interest rates high, whilst the government spent our way into debt. As a result of the high interest rates, foreign investment flooded our economy leaving our AUD high. That in turn put unnecessary pressure on retail, manufacturing, our exports including squeezing margins on mining.

An example of policies that protected the asset value of the rich and building companies was the first home owners. I'm sure it some jobs but ultimately passed wealth from the poor and those who weren't established to the rich. this was discussed previously and it was noted both sides of politics did this.

long term, let's see how the job labour market protections work. as what is borrowed to stimulate has to be repaid and will contract the economy. Emphasising we have turned short term pain into a problem for a generation.

 

[Power Raid]

I might ask who is really improving their standard of living in China?

At the rate they are shooting corrupt officials, it probably tells you!

Anyway, what is the outcome if we continue this relentless drive to production & export in China & India? I've already mentioned the comment that the world cannot sustain 7 billion people in the middle class given they way we produce things. We simply dont have the resources on the planet. Let alone can we handle the environmental devastation being reeked.

The way we measure growth in 'economics' must include all the costs of production, including environmental costs. We will pay for it at some stage, one way or another.

Will the population of the world reduce? if so, how?
or do you see the rise of middle class just result in war as people fight for the resources?
if they do fight, who wins?

 

[Long Live HFC]

monetary and fiscal policies are intertwined. That's why the RBA had to keep interest rates high, whilst the government spent our way into debt.

huh? RBA rates dove from 2008 onwards as the financial crisis went global. it had nothing to do with fiscal policies but was a response to the global outlook. certainly labor's 'spend-a-thon' didn't begin until this time either.

long term, let's see how the job labour market protections work. as what is borrowed to stimulate has to be repaid and will contract the economy. Emphasising we have turned short term pain into a problem for a generation.

i don't disagree with this except for the bolded. the level of contraction that would occur depends entirely on where the money goes- if 100% of the debt was owed to australian bond investors then it's simply a shift from tax payers/government to bond investors. obviously that's not the case, but still a fair amount of government bonds are owned by aussies or australian companies.

the ongoing problem of deficits is a structural issue primarily caused by tax cuts we can no longer afford.

 

[Power Raid]

if the rba was responding only to the GFC and its impact on our economy, they would have reduced rates. but to tackle inflationary effects of a poorly targeted and over-cooked stimulus, they had to work against the government and increase rates.

 

[Power Raid]

I understand Rudd didn't want a recession on his watch and the rest is history

rates increase in 08 and began to decline as the inflationary stimulus was eased. The FX went through the roof due to the interest rate differential in OZ and overseas and thus put unnecessary pressure on retail, manufacturing and exports through late 08 to late 11.

 

[Power Raid]

and our fx

emphasising that our stimulus was over-cooked, leading to higher interest rates from late 08 and in turn a higher than necessary fx. this of course punished our industry.

so we have an economy with less manufacturing, less blue collar jobs and a giant debt to pay off.

 

[Long Live HFC]

thanks for that. i wasn't aware spending had increased prior. i stand corrected.

 

[madmug]

Will the population of the world reduce? if so, how?
or do you see the rise of middle class just result in war as people fight for the resources?
if they do fight, who wins?

I

The best outcome, as I see the experts propose, is that technology is our best hope of attaining sustainable economic growth. New technology includes renewable energy systems, even nuclear fusion at some stage.

Better methods of recycling are vital. Whatever happens we cant go on as we are continually using non renewable resources at such a rate, & poisoning our planet & ourselves.

It appears that our population will grow until we become middle class, as middle classes dont have so many children, ie Europe & Japan in particular. So Its HOW we become that middle class population which concerns me & is a danger to our future.

Does that help you understand where I'm coming from?

Anyway, It certainly shines a poor light on what this dumb Gument of ours see as our future in Mines & Coal. No room for renewables in this country!

I certainly hope it doesnt get to the stage of fighting for ever scarcer resources. Water seems to be one limited & vital substance that could pose a problem in parts of the world. Another reason to stop people wasting our precious water resources.

 

[Power Raid]

I

The best outcome, as I see the experts propose, is that technology is our best hope of attaining sustainable economic growth. New technology includes renewable energy systems, even nuclear fusion at some stage.

Better methods of recycling are vital. Whatever happens we cant go on as we are continually using non renewable resources at such a rate, & poisoning our planet & ourselves.

It appears that our population will grow until we become middle class, as middle classes dont have so many children, ie Europe & Japan in particular. So Its HOW we become that middle class population which concerns me & is a danger to our future.

Does that help you understand where I'm coming from?

Anyway, It certainly shines a poor light on what this dumb Gument of ours see as our future in Mines & Coal. No room for renewables in this country!

I certainly hope it doesnt get to the stage of fighting for ever scarcer resources. Water seems to be one limited & vital substance that could pose a problem in parts of the world. Another reason to stop people wasting our precious water resources.

I think everyone sees room for renewables, including this government, but we are likely to be customers rather than design or manufacturing.

in regards to new technology; I absolutely agree. we have an exciting journey ahead, with the inevitable speed bump.

 

[madmug]

I think everyone sees room for renewables, including this government, but we are likely to be customers rather than design or manufacturing.

in regards to new technology; I absolutely agree. we have an exciting journey ahead, with the inevitable speed bump.

We (as a nation) must at least be part of the research, development & design efforts of some of these sunrise technologies. Otherwise we are FORKT. Even some high tech specialist manufacturing is not beyond us. We do need to invest in these areas before we lose too many more quality researchers to OS.

Biomedical is another area we must invest more in before we fall behind forever.

I'm not sure if this Gument understand the idea or urgent need for such Investment. IMO this bunch of visionless bean counters seem to want to economically 'act in haste', only to have us all 'repent at leisure', to use an old saying.