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Category Archives: Oz Politics

Many people believe that in 1985-87, when Negative Gearing was abolished in Australia by the Hawke/Keating government, that rents rose, and rose dramatically.  This is certainly the assertion of the Turnbull government as part of its 2016 Federal Election campaign strategy in which the spectre of massive rent rises coupled with a  dramatic fall in housing prices is daily utilized as a scare campaign.

In fact, during that period 1985-1987, while rents did rise in Sydney and Perth as NG was abolished, they fell in Adelaide, Hobart and Brisbane and remained steady in Melbourne. In other words there was no relationship between the abolition of Negative Gearing (NG) and rental prices in that period.

The predominant reason that rents increased in Sydney and Perth during that time was tight rental vacancy rates. Sydney, in particular had very low vacancy rates (less than 1%).

If the abolition of Negative Gearing leads inevitably to rent increases it should have done so in all cities during 1985-1987.

It did not.

This alone is enough to disprove that abolition of Negative Gearing has a dramatic influence on rents.

Even the recent (March 2016) BIS Shrapnel report which modelled a particular set of assumptions about Negative Gearing and which has been used by the Turnbull Government to forecast general economic disaster should Negative Gearing be abolished, agrees that rents did not rise during 1985-1987. It says

neither rents nor dwelling prices displayed any notable change of behaviour or deviation from trend during 1985-87 [when negative gearing was abolished]

The CEO of the Commonwealth Bank, Ian Narev, whose bank owns a $400 Billion property portfolio says that Negative Gearing is only a minor influence on housing prices. He said:

I can tell you having a $400 billion home loan book – your assumptions on unemployment and what’s happening in global interest rates will dwarf whatever assumptions you’ve got on the modelling about the impact of negative gearing by a factor of…I can’t tell you the number but it’s a big number.

It would appear that the BIS Sharpnel model is drivel.

Macrobusiness characterises the BIS Sharpnel modelling outcome as hoplessly inconsistent on its own terms:

 [BIS Sharpnel say] restricting negative gearing to newly constructed dwellings would somehow crash dwelling construction, raise rents, and destroy employment, the Budget and the economy? Even in its own terms this makes no sense. How does a sagging economy and rising unemployment lead to a rental cost spike?

One should also note that the NG scenario that BIS modelled is significantly different from the actual policy that the ALP has proposed, though Prime Minister Turnbull and Treasurer Morrison used the BIS Sharpnel scenario to criticise the ALP’s NG proposals.

So Why, Then, Was Negative Gearing Restored In 1987 ?

We are thus left to answer the question: So if Negative Gearing has a negligible effect on housing prices and rents, why then did the Hawke/Keating government resume Negative Gearing in 1987 ? My assessment is that they caved in to political pressure, possibly due to the upcoming NSW State Election being fought in a climate of rental stress and declining construction activity.

The Cabinet Submission prepared by Keating in 1987 said, in general agreement with Ian Narev above, that

Evidence suggests local factors rather than tax measures dominate in metropolitan rental markets

But the submission nevertheless stated an expectation that Negative Gearing would re-stimulate the construction sector, which had dropped off over the prior 18 months, during the time that Neg Gearing had been abolished. Keating’s submission said

restoring negative gearing could be expected to provide some stimulus to construction in the medium term

This ‘expectation’ of Keating’s is nowhere backed by evidence in his submission.

As we have already noted, the actual available evidence (listed in detail in the submission) points to ‘local factors’ driving rents. Not Negative Gearing..

My contention is that Keating was feeling political heat and just wanted to be seen to be doing something to assist the Building Construction sector and ease rents. But he knew re-establishing Negative Gearing wouldn’t help much, if at all.

The failure of Negative Gearing In Australia to provide its stated aims of stimulating Housing Construction and reducing rents is well-established by the prominent Australian economist Saul Eslake.

An Expensive And Failed Policy

In 2013 Eslake noted that 92% of housing investors buy established dwellings, so NG has not significantly improved housing supply. All it does is assist investors to buy established homes, this bidding up prices on the existing housing stock.

Eslake also notes that in the decade 2001-2011 Australian Housing Stock grew at a rate less than the population growth. Negative Gearing has simply been ineffective at increasing housing supply to any significant extent, if at all.

In fact, by rewarding speculative investment in Housing,  The National Housing Supply Council, of which Eslake is a member calculates that NG has assisted in the suppression of  investment in new housing during 2001 and 2011, such that the national housing stock was 228,000 dwellings less than would otherwise have been under historical rates of housing formation.

In summary then

  • Abolition of Negative Gearing did not increase rents between 1985 and 1987
  • Negative Gearing does not stimulate housing construction
  • Negative Gearing is a very minor factor in housing prices
  • Negative Gearing does not reduce rents
  • The March 2016 BIS Sharpnel report is based on a faulty and self-contradictory model of Negative Gearing effects.







From the perspective of Liberal Party donors, could Abbott’s Prime Ministership actually be seen as a colossal success ?

He destroyed the Motor Vehicle and associated Components Industries which has eliminated thousands of unionists and crippled a major Union.

He also destroyed the Submarine Industry, eliminating even more unionists.

He has made Carbon Pricing politically impossible for at least two Federal Election cycles – until 2020 at the earliest.

He destabilised the Renewable Energy sector. Some repair now in progress by Malcolm Turnbull.

His Royal Commission Into Trade Unions (TURC) has full potential to make both Unionism and the ALP synonymous with crime in the public mind.

He has pushed de-Federalisation of Public Education and Public Health into a live Federal issue. The next budget may well make this a centrepiece of the LNP policy platform, masked by an election campaign based on TURC smear, thus sneaking defunding of public education and health through as a ‘mandate’ while the election is fought on other issues

This will kill two more Unions and eliminate all Federal spending on Health and Education. Hey Presto – Budget surplus and LNP proven again to be great economic managers.

Passed legislation to conceal earnings of company board members, CEOs and the like. Prevents questions arising about stratospheric and ridiculous salaries self-awarded by board members who are mostly LNP voters, members and donors and also dampens calls arising for higher income taxes to be levied on the super-wealthy. Remember most board members are members and CEOs on multiple boards.

Declined to give the iconic Australian company and important regional employer SPC (Shepparton Preserving Company) Federal funds to maintain operations. This almost killed off more unionised jobs, but regrettably for LNP donors the Victorian State government provided emergency funds and kept SPC trading. SPC used the funds for strategic capital investment and now look set to continue profitable operations, an outcome which unhapplly for LNP donors has maintained some unionists in employment.

So there is the list of achievements: Tony Abbott – greatest and most effective LNP Prime Minister of all time as seen from the perspective of LNP donors.

Minister for Immigration, Scott Morrison, treats asylum-seekers worse than cattle.

The asylum-seeker Reza Barati was recently murdered in Manus Island, Papua New Guinea, while resident in an asylum-seeker detention centre operated by Mr. Morrison. Barati had a rock dropped on his head while he lay helpless on the floor having been beaten by a marauding mob armed, like Frankenstein’s villagers, with iron bars and whatever other industrial weaponry lay at hand. Barati’s head was caved in. He died.

This does not trouble Morrison. Five months after the incident no one has been charged and a major suspect has fled Manus. From Sarah Whyte’s article in the SMH

One of the four chief suspects in the killing of Iranian asylum seeker Reza Barati had fled Manus Island and his whereabouts were unknown.’…It was ‘an ongoing case,’ a PNG police spokesman, Dominic Kakas, said, and ‘no-one had been charged, or interviewed.’

As Bob Ellis puts it, quoting Morrison in the article, Morrison seems unamazed, and even untroubled, by this. Said Morrison, I have no further information,’ he said yesterday, ‘than what is already, publicly available..

One might wonder how much effort Morrison would put into an investigation in which an asylum-seeker was alleged to have killed a Navy officer during on-water operations. Of course, Morrison and his team of 95 Media advisors would be working around the clock to characterise the asylum-seeker as a diseased, evil, lazy, ungrateful, criminal, jihadist whose associates in Australia need to be monitored by a volunteer citizen-informer network similar to, say, Ceaucescu’s Romania. It would be front page news for six months. The Daily Telegraph would print souvenir mourning issue for the State Funeral. Andrew Bolt would be incandescent with fury. Of course.

But Reza Barati is a non-human, a non-entity. His life does not matter. He can be treated worse than cattle.

So right at this moment, the High Court is hearing preliminary argument into the illegality of Morrison’s surreal Border Force and its arrest of 153 Tamil asylum-seekers who were taken prisoner by Morrison while in international waters on their way to New Zealand (yes you read that correctly).

Morrison does not release any information about this incident to the Australian public, claiming that to do so would assist people-smugglers. This is an obvious lie by Morrison. All asylum-seekers carry mobile phones and are in instantaneous contact with people smugglers. The target of Morrison’s secrecy is the Australian public, whom Morrison has decided may object to his cruel and inhumane methods should they become generally known.

Today at the High Court hearing we learnt that the asylum seekers are being detained in windowless locked rooms with men kept apart from their families…they have not been asked to discuss their reasons for leaving India.. that Morrison has argued that outside of Australia’s territorial waters, asylum-seekers have no rights under the Australian Migration Act.

So, even though the Tamils have no rights in Australia, Morrison has the right to arrest them lock them up and deport them to whatever country he sees fit.

How come Morrison has complete rights of the destiny, life , health and fate of these people and yet they have no rights at all in Australia ?

That has to be piracy by any reasonable definition.

The article concludes that the case will be heard at the end of the month i.e. prison ship to continue for six more weeks with a continuation of the windowless locked room policy. Those in Nauru and Manus and indeed even in community detention in Australia will continue to suffer multiple intentional cruelties which lead to mental illness and inevitable to suicide and self-harm, about which Morrison (and Abbott) care zero. Asylum seekers are not people. Why should we care how they feel.

You wouldn’t treat cattle this way.
Morrison believes that asylum-seekers may be treated worse than cattle. They are not truly human.

And why ?

Because to Morrison, asylum-seekers represent the threat of Islamic colonisation of Australia. Now Tamils aren’t usually Islamic, but Morrison must stop all asylum seeker vessels to break the will of people smugglers with Islamic cargo. Morrison would prefer to send 100,000 people to suicide than allow one to enter Australia.

And the thing is he could simple de-ratify Australia from the International Convention on refugees and give himself a truly legal reason to deport every single asylum seekers, but he won’t, because to de-ratify from that convention would cause him embarrassment. By maintaining Australia as a signatory Morrison can claim ‘we support genuine refugees’. In this way, Morrison justifies his cruelty to the poor and dispossesed of the world just to maintain his personal reputation.

And the really scary thing is, I don’t think Morrison cares less.

He is ideologically insane.

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Expert Panel Delivers Joy To Cannibal Serial Killers

Instantly go to First Dog On The Moon’s The Age Of Entitlement Will be Over When I Say It Is. I reproduce it here as the beautiful, unsettling, lacerating poetry that it is. Thanks, First Dog.

The Age Of Entitlement Will Be Over When I Say It Is

Close those women’s shelters
And cast those women out into the street
Send them home to the men who will beat and kill them
and their children
Do it

Throw the weak and lazy off the dole
Down into poverty and homelessness
Just say no
Do it
Save my ever loving tax dollars
I will sleep soundly at night

Please spend my tax dollars on your smug glossy children
And their remarkable schools
Do it
Just do it

Spend them on great smooth roads
And killer planes
Do it
I will be warm and dry

You must never wake at 4am
With a fear in your gut
Realising how you climbed across the backs
Of the rest of us
Don’t do it
Never doubt my resolve
You owe it to my taxes

We put you there
Tiny feculent gods
Dancing to consolidated revenue
My vote is lurking
Ever vigilant

Hurry! Build your great fetid looming obelisks
To your mercurial glory
Poison the sky
Do it
But don’t you waste my goddam taxes
Have some decency.

First Dog’s poem reminds me of Adrian Mitchell’s To Whom It May Concern (Tell Me Lies About Vietnam). The link between the two is the concept of immunity from (First Dog) or self-delusion of safety from (Alan Mitchell) harm. In Age Of Entitlement this concept is conveyed by the pivotal line I will be warm and dry. Tell Me Lies conveys this idea in its title and also the remedies for the intrusion of reality e.g Fill My Ears With Silver.

Here is reproduced Tell Me Lies About Vietnam:


To Whom It May Concern
(Tell Me Lies about Vietnam)

I was run over by the truth one day.
Ever since the accident I’ve walked this way
So stick my legs in plaster
Tell me lies about Vietnam.

Heard the alarm clock screaming with pain,
Couldn’t find myself so I went back to sleep again
So fill my ears with silver
Stick my legs in plaster
Tell me lies about Vietnam.

Every time I shut my eyes all I see is flames.
Made a marble phone book and I carved all the names
So coat my eyes with butter
Fill my ears with silver
Stick my legs in plaster
Tell me lies about Vietnam.

I smell something burning, hope it’s just my brains.
They’re only dropping peppermints and daisy-chains
So stuff my nose with garlic
Coat my eyes with butter
Fill my ears with silver
Stick my legs in plaster
Tell me lies about Vietnam.

Where were you at the time of the crime?
Down by the Cenotaph drinking slime
So chain my tongue with whisky
Stuff my nose with garlic
Coat my eyes with butter
Fill my ears with silver
Stick my legs in plaster
Tell me lies about Vietnam.

You put your bombers in, you put your conscience out,
You take the human being and you twist it all about
So scrub my skin with women
Chain my tongue with whisky
Stuff my nose with garlic
Coat my eyes with butter
Fill my ears with silver
Stick my legs in plaster
Tell me lies about Vietnam.

…also somewhat in this genre …

I Like To Know About A Story From You Your Heart Your Feeling Your Way Of Looking At It

Literary Genius

Open Hearts In Arnhem Land

Five Things To Know About Me

I Feel Like Having You As A Pet

The Truth About Bugs
T-Shirt Of The Week

Driving home last night I tuned into 2GB to see what the crazy people were thinking. Steve Price was running a propaganda blitz on how brilliant the LNP HECS changes are, largely focused on how protesting Uni students are lazy bludgers sponging off hard working tradies and TEH TAXPEARZ!!!!11!!

Price was beautifully suckered by Orlando from East Dubbo* (from 24:39 on the audio) who rang in and said he was doing an MBA on-line from a private institution in Adelaide which was costing him $18,000 but said he was amazed when the UNSW quoted him $90,000 for the same workload. WHY ? Steve Price was non-plussed at the grotesque overcharge.

Steve’s in-studio expert quickly chimed in to ‘splain. Orlando’s institution is a private education provider which does not qualify for inclusion in the HECS system. UNSW is a HECS provider and charges $90,000 simply because ‘they can…supply and demand’. UNSW run a popular course and can accordingly by the power of market forces charge 5 times as much. On-air expert was starry eyed at how Joe Hockey’s brave new HECS would be MUCH SIMPLER because now both courses would be accessible through HECS and both would qualify for 45% Govt. contribution. This being the case we now have a before and after scenario for Orlando’s degree:

Total Cost: 18000
Upfront Cost Borne By Taxpearz: 0

Total Cost: 18000
Upfront Cost Borne By Taxpearz: 8100

So sainted TAXPEARZ PAY MOAR under the LNP scheme.
And obviously should any existing course blow out to 5 times current levels in brave new degregulated LNP HECS, TAXPEARZ are footing the BIGR BILZ AGEN. That’d be 40500 – 8100 = 32400 a pop under Orlando’s example.

Steve Price just let the horror of unregulated market forces pass unremarked. Sweet.
(Also more upfront public debt load under Coalition not v. important)

* Orlando from East Dubbo is really Jeff From Western Sydney. I just jazzed the name up a bit.

Andrew Blot just called.

The winning distance in Olympic Men’s Long Jump has been in decline since 1968. The cooling trend proves that money spent on Long Jump for half a century is a complete waste, not to mention a self-loathing anti-human Green-Left conspiracy which is destroying the minds of our children.

The data is incontestible

BARNABY JOYCE MP, MINISTER FOR AGRICULTURE: He comes across as sort of the effervescent, sometimes bumbling character and that is a ploy. You do not get to where you are by being a fool. You’re a fool if you think he’s a fool.

Can we please dispense with the nonsense that somehow Clive Palmer and PUP will be a hindrance to Tony Abbott and the LNP?

They both want the same things: destruction of The Greens and repeal of the Carbon and Mining Taxes. Palmer is a Coal Miner. From this all else follows. The Great Barrier Reef, the Tasmanian Wilderness and everything else is valueless to Palmer except insofar as they may sit on gigantic seams of coal. And Abbott’s organisation is funded by coal maniacs.

As we get closer to the new Senate taking their seats from 1 July 2014, Palmer has become explicit on his utter disdain for the (non-coal) natural environment, AGW Climate Change and the IPCC. Here are some Palmerisms on these subjects:

On PUP’s Intention To Repeal The Carbon Tax :-

As a matter of principle, we favour the repeal of the carbon tax, as does the Government,” Palmer said.

“And our party has the balance of power in the Senate right now, even if we’re unsuccessful in the election in WA, which we won’t be. So the carbon tax is definitely going. It’s a fait accompli.”

On Climate Change :-

There’s been global warming for a long time. I mean, all of Ireland was covered by ice at one time. There were no human inhabitants in Ireland.

On How AGW Is A Conspiracy :-

I can get a group of scientists together and pay them whatever I want to and come up with any solution. That’s what’s been happening all over the world on a whole range of things

On How The IPCC Is Completely Useless :-

TONY JONES: [The IPCC Fifth Assessment Report is] based on 309 scientists from 70 countries and the summary for the policymakers has to be agreed line-by-line by 115 countries. I mean, that’s the sort of consensus that you’re rejecting here.

CLIVE PALMER: Well I think it’s a – camels were designed by a committee. With so many people, you’re really not going to get anything worthwhile. You need to have a proper report with people that can do something. But, look, I’m just talking about …

It has been fashionable for the media to treat Palmer as a buffoon and somehow as a hindrance to Abbott’s anti-Carbon agenda. It is the media who are buffoons for entertaining these propositions. Even the estimable Lenore Taylor imagined PUP intransigence on Carbon Tax repeal. While it it entertaining to see Abbott squirm a bit while Palmer teases him about the possibility of non-cooperation, it should have been obvious that the interests of Palmer and Abbott are aligned, not in conflict.

Palmer will make Abbott pay a premium for the passage of the Carbon Tax repeal. This premium will be composed of a small populist gesture, most likely the restoration of increased benefit payments to orphans of deceased servicemen, removed by Abbott in his typically heartless manner, and a very large personal premium to Palmer personally, which will be favourable conditions for the opening and servicing of Palmer’s huge coal tenements, currently closed. Abbott will pay these premiums and the Carbon Tax repealed.

The genesis of Palmer’s fall-out with Abbott is built around Liberal/National power dynamics within Queensland State politics. In brief, Abbott is a supporter of Liberal Party federal vice-president, Queenslander Santo Santoro. Santoro is an opponent of Palmer. The Australian Financial Review covered the issue in The Clive Problem: Why Palmer is Abbott’s Nightmare Best Friend.

Santoro’s modus operandum as a political fundraiser had so shocked the Queensland LNP that in 2008 it sent a dossier on his activities to the police. The police exonerated Santoro and the subsequent LNP internal feud left the Liberal arm in control and the National arm sacked from prominent positions and disenfranchised. The Liberal state arm was supported by John Howard, who championed Santoro’s career in Queensland politics, Abbott and Premier Campbell Newman.

Palmer’s opposition to Santoro is principled. Palmer feels Santoro’s methods are unhealthy and could divide or even corrupt the the Queensland LNP.

“Santo’s a very divisive fellow,” Palmer told the Financial Review. “He gets his power by raising funds for individual ­politicians. “My donations have always been to the party, that way you can’t affect the internal politics.”

Palmer’s opposition to Santoro has been costly for him. Palmer wants to develop his China First coal project in Queensland’s Galilee Basin but his plans have been blocked by the Newman government in apparent retribution for Palmer’s stand against Santoro. Santoro, for his part, has held a grudge against Palmer for the way in which Palmer engineered the merger of the Queensland Libs and Nationals in 2008 and probably for Palmer’s role in forwarding Santoro’s dossier to the police. Santoro resigned from John Howard’s ministry and from the Senate in the wake of a number of breaches of the Ministerial Code of Conduct and of the Register of Senators’ Interests. He is still a Federal Liberal vice-president and important fundraiser. This last would explain his support from Abbott.

Newman and Santoro are very tightly linked. The AFR story implies that Newman stalled Palmer’s China First mine in the Galilee Basin and other ventures because of Palmer’s opposition to Santoro. Palmer criticised the Queensland LNP government for stalling his mining operations and was promptly dismissed from the LNP. Shortly afterwards PUP was born.

So, PUP exists as a vehicle for Palmer’s personal enrichment. Palmer himself only teases and taunts Abbott as a means of payback for Abbott not supporting Palmer in the power struggle with Santoro. The criticism of Abbott is also intended to strip some votes from Abbott and the LNP and draw them to Palmer and PUP. Hence Palmer’s criticisms of Abbott over orphans’ benefits.

And as for buffoon – Barnaby Joyce was spot on. Anyone who thinks Palmer is a buffoon is themselves one. Since the moment Abbott supported Newman and Santoro over Palmer, Palmer has been assiduously working for balance of power in the Australian Senate and he has achieved it. Clive wins. Tony must now deliver.

But all the talk and teasing from Palmer masks the basic confluence of interests between the two men. Palmer will get his China First mine approval and Abbott will get his Carbon Tax repeal. Quid Pro Quo.

If I may play Captain Obvious for a moment, the secrecy around Operation Sovereign Borders is not for one moment intended to deprive people smugglers information about on water goings on. Indeed it cannot. People smugglers are of course first hand witnesses and participants in the events. As are the asylum seekers, who all have mobile phones and who will immediately call their relatives to inform them of their fate.

In fact, Morrison and Abbott want and intend that the asylum seekers immediately inform their friends and relatives back in Indonesia what has happened to them, to describe how horrible it was and how cruelly they have been treated, so that their failure to enter Australia may dissuade others. S&M inc (hat-tip Bob Ellis) do not at all intend secrecy for operational matters in the information flow going back to Indonesia. They want that megaphoned.


The target of the secrecy is you and me, the Australian public. (Hi.)
Morrison and Abbott directly lie to us when they say otherwise.

Why Would They Lie ?

Because in lying, Morrison and Abbott serve a higher good than that of truth. For Abbott its the re-election of the LNP. For Morrison its the de-Islamisation of Australia. Lies, cruelty and torture, for these men, justify the purpose of serving their Higher Truth.

But they know that even the bigots and fearful in Australia can only stomach so much. That why secrecy is paramount.

Kurtz: I expected someone like you. What did you expect? Are you an assassin?
Willard: I’m a soldier.
Kurtz: You’re neither. You’re an errand boy, sent by grocery clerks, to collect a bill.
Apocalypse Now (1979)

Figured it out. Its about destroying Unions.

More specifically its about destroying the voter base from which the ALP draws its support, an important component of which is Unions. Viewed from this perspective several of the Coalition’s supposed blunders in the past three months since taking power can be seen as a cohesive strategy and therefore make logical sense as opposed to being seen as inept, crazy or politically miscalculated. This was the error I made in my first blog on this issue.

The objective of political parties is not actually to govern the nation. This is merely the role assigned to them by democratic theory. The objective of political parties is actually to gain power for their donors so that the financial stakeholders (e.g Gina Rinehart, the CFMEU) and their administrative spokesmen (e.g Tony Abbott, Bill Shorten) may divide money and power between them according to their personal proclivities. Such proclivities may include trying to improve the lives of ordinary Australians, or at least the self-delusion that making party donors rich or powerful will do so as a by-product.

Someone once said, politics is the shadow cast by business over society. Precisely. This gets to the point that retail politicking (election campaigns and the like) is merely a proxy war fought by the powerful for power and money. So we may say, moving to the next level of analysis, that each decision of a political administration has as its true objective the continuation of the rule of the current ruling class or faction thereof and/or the disbursement of benefits of power to that faction. Any benefit that may flow to wider society is a necessary cost of power in a democracy, a grudging concession to the need to appease the none-core constituency i.e. those not financial donors or administrative tools. A majority must be garnered and maintained; and propaganda has limits. Voters demand to see the cash / education system they were promised. Unless you can talk them out of it.

The power base of political parties persists beyond each election campaign and their objectives are stable. Gina Rinehart wants to destroy unions today just as much as she did 30 years ago and her donations to the Liberal Party are intended, as they always have been, to procure that objective. Her servants and fellow ideologues, Graham Morris and Mark Textor (LNP strategist), have the same objective. They are constantly looking for ways in which to not only defeat but ultimately destroy the ALP. And the way to do that is to destroy their voting base of which Unions are an important component. This is achieved by Legislation (Work Choices), Propaganda (Rupert Murdoch, The Australian) and, where necessary, the Police or Military in support of legislation (Patrick Stevedores).

Morris Exultant

Here Graham Morris alludes with exaltation to the collapse in Union membership since 1980 and how this has gutted the voter base of the ALP:

GRAHAME MORRIS: Well, I think what we’ve talked about is the Labor Party problem. It is hard to think over the next decade or two where the Labor Party in any part of this country can from here on in govern in its own right. The labour, L-A-B-O-U-R, vote and support has just collapsed. It is down under 30 per cent

A major landmark in this long-term decline was the collapse in Manufacturing, especially Auto, under Keating in the 1990s, following the drastic reduction in tariffs that Keating administered. As George Megalogenis has described, many of those blue-collar workers, formerly unionized, became self-employed as couriers, landscape gardeners and the like. They became self-employed small businessmen and with it LNP voters. This was the genesis of Howard’s Battlers, low-income entrepeneurs, a voting bloc first recognised and effusively courted by Howard and the LNP and ever since a vital cohort of swinging voters, essential to electoral success. The ALP knows them as ‘Working Families’.

And that brings us to the decision to let Holden die, and with it quite possibly Australia’s entire Automotive sector. The decision is insane only when viewed from the perspective of national industrial capacity and diversity, skills retention, research and development and associated goals always considered part and parcel of rational and strategic national objectives.


But sane governmental objectives are only tangentially associated with political power. The Automotive sector is heavily unionized. It is crawling with ALP voters. Therefore from the perspective of long-term Liberal Party power interests it is better to destroy the Automotive Industry. So they did: Morris, Textor, Minchin and Cormann I mean. Abbott too. Though frankly Abbott seems unlikely to know with any certainty what day it is. He’s a messenger boy. At best a figurehead. As for Hockey: he too will do what he’s told.

And why kill the industry now ? Because propaganda conditions are ripe. The public is ready to accept it. Unions are long-regarded as evil and European Debt and the GFC have been leveraged by Murdoch to mark government spending, most especially government debt as cardinal irresponsibility, a national shame and a hallmark of incompetence. In short, the public now believes, as per consistent repetition, that there is no reason, place or rationale for subsidy. Except for themselves, personally. If they are middle-class or higher. Subsidy for low-income and unemployed is evil. As instructed.

The next step, almost achieved in the USA, is to train the public to believe that government itself is evil. Then corporations will be able to rule unhindered by any form of regulation.

And the next next major step after that is the dismantling of middle class welfare which happens sometime after voluntary voting is introduced (Freedom TM, Democracy TM). The middle class is only cosseted now because it determines election outcomes. The voting franchise will be moved higher and higher up the socio-economic ladder as circumstances and propaganda permit. That damnable Obama motivated poor people to vote again! This is his true odium.

Cohesive, Logical, Insane

To summarize thus far, the LNP is destroying the Australian Automotive Industry because it is Unionized. By this destruction of Unions they hope to further gut the ALP vote and garner another voter wave of self-employed entrepeneurs, their set-up costs funded by their redundancy payouts.

Seeing the destruction of the Automotive Sector this way makes sense of other decisions taken by the Credlin government: namely Gonski backflips and Child Care pay rise withdrawal.

The LNP wants to destroy public education
because teachers are unionized and because publicly funded schools teach communitarian principles such as conservation and, well, community. The LNP ideal is for each voter to be an atomised, personally obsessed and entirely self-funded microbe operating in complete disassociation with any other person in Australia. This the LNP calls freedom. From communitarian principles spring horrific ideas like taxation, conservation, anti-defamation laws, national parks, equal opportunity and such. These impulses must be resisted and destroyed. Gonski would have strengthened public education. So it had to be undone. And it was.

Pyne was neither a fool, nor out of control, just a bit messy and arrogant. He did precisely what was intended and very effectively. He will be promoted and rewarded within the parallel Universe of the Melbourne Club, by Ambassadorial appointment, Chairmanship of the ICC or indeed whatever the heck he asks for. He may even get a Presidential Freedom Medal from the American Enterprise Institute or whom/whatever for services to crushing socialism in human thought.

Private education, on the other hand, teaches merely personal Values TM from which Libertarianism can be later extrapolated via Uncle Rupert’s wall-to-wall messaging. This is why the LNP gladly subsidizes private education.

The withdrawal of the funding of child care workers pay rises was done simply because the pay rises had to be made under an Enterprise Agreement which allows Unions more entrée to the process. This is plenty reason enough for the LNP to veto it.

Continuous Opportunistic Destruction

The delegitimisation and preferably destruction of unionized or communitarian ideals and institutions is continually in the forefront of the minds of Liberal strategists. Taking advantage of propitious conditions Peter Costello took the opportunity to eliminate compulsory student unionism on University campuses.

While superficially the abolition of compulsory student unionism appeared to be a childish misuse of Federal Government time and power, a juvenile continuation (and it was) of undergraduate politics club feuding into the sphere of national government, this move makes perfect logical sense if viewed as an opportunistic strategic strike against ALP leadership training and the entire legitimacy of unionism as a social institution. A strategy of moral panic was deployed by the Liberal Party in its successful campaign to delegitimise Student Unions by pointing out that Student Unions had sent money to Palestinian Solidarity groups. This rationale was simplified into panic-speak by claiming that Student Unions support Hamas.

The delegitimisation of Unionism has been a constant theme of The Australian since Abbott became LNP Leader Of The Opposition and has continued seamlessly into government. Unions are constantly portrayed as criminal, parasitic and wasteful inhibitors of national prosperity. This caricature is now the standard received Truth about unions for a goodly proportion of Australians.

Class Warfare

All of these decisions: kill Student Unions, kill Automotive, kill Gonski, kill Child Care pay rises were taken because each of them weakens the voter base of the ALP. They are extremely important and strategic decisions taken by the LNP-that-matters (hello Nick Minchin). Class warfare anyone ?

All of these decisions have political cost, i.e. they are all unpopular, and the LNP is now behind in the polls in record quick time for a new government.

But, hey, there are three years until the next election and two weeks until Christmas. People forget. In this way the LNP is doing what all new governments do which is get the bad news out of the way quickly and in plenty enough time for voter amnesia. Most Australians will have forgotten about Gonski and Child Care, let alone Debt Ceiling, by the time they dump the Christmas wrapping paper in the bin.

But the LNP has taken a very big gamble with the Automotive Industry. 50,000 jobs and a string of small component makers. That’s a lot of brothers, cousins, uncles and dads on the scrapheap. And not all at once. Component makers will drop out week in week out for who knows how long. Toyota may hang on for two years and then go. So this particular decision, to let Auto die, crosses the ideological line from long-term Liberal Party political strategy into national destruction.

Maybe the LNP have hamstrung themselves in the first week, like Gillard did with Carbon Pricing.

Mayhap, Touchwood, mayhap.

I think its because they want a budget surplus. Yes, the vision is that small. Please prove me wrong. (Hang on I just did: here)

Data in this post largely plagiarized from Political economist Dr Remy Davison from Monash University speaking on The World Today

The Australian Motor Vehicle Industry and associated components manufacturers provide 50,000 jobs. The level of subsidy Australians provide is relatively low by international standards. The US government just subsided its own car industry to the point of partial nationalization. ALL national governments heavily subsidize their Motor Vehicle Industry: China, Japan, South Korea, Germany and France.

The level of subsidy may well be $48,000 per year, per job as Treasurer Hockey says, but that’s $25 per head annually which is what the current assistance of $500 million amounts to.

The Motor vehicle Industry produces a $23 Billion dollar gross value add to Australia’s economy and is a $3.6 Billion dollar export industry.

Sorry. I am not seeing the urge or logic here. Where is the over-spend ? Isn’t it obvious that the asset has value ?

Australian banks are subsidized at least 4 times as much as the Motor Vehicle Industry at least $100 per person per year.

The Mining Industry receives $4 billion a year in subsidy. That’s about $200 per year per head or 8 times as much as the Motor Vehicle Industry.

The Australian car industry spends over $600 million per year on R&D. That will stop if the Motor Vehicle Industry dies.

Wasn’t Abbott and his team hysterical when Rudd announced the end of Fringe Benefit Tax concessions on Company Cars during the 2013 election campaign? Wasn’t that going to decimate the car industry ? The same one they are now willing to let die as a costly festering Stone Age heap of useless slag ?

Here’s a quote from the Coalition’s election material on Rudd’s FBT changes:

The Coalition does not support Labor’s $1.8 billion hit on the car industry.

Tony Credlin-Abbott said that Rudd’s FBT cancellation was

a disaster for a motor industry which is already under pressure

and that the FBT concessional support should be maintained to support the industry.

Today it seems the Coalition is happy to see the Industry gone altogether. No, not true. They sincerely want it to survive, but without one cent of government assistance. Which happens nowhere in the world. Its a fantasy.

As Ian Credlin-McFarlane-Credlin, our current Federal Industry Minister said just six weeks ago

every vehicle in the world was subsidised, either directly or in kind, be it through tariffs, currency manipulation or other means…All countries subsidise. Most subsidise much more than we do…If you don’t subsidise the industry, it won’t be there. I accept that argument. I’m not sure that my colleagues do yet.

What drives the Coalition fantasy of a subsidy-free Motor vehicle Industry ? A small headline saving on the 2014 budget spreadsheet ? One which would be dwarfed by the ensuing loss in economic value add ?

Surely not.

Something Worth Subsidizing

So what does the Coalition think is worth subsidizing ? Well, hospitals in marginal electorates. In 2010 Abbott offered Andrew Wilkie $1 bn to re-build Hobart Hospital in exchange for Wilkie’s support in a minority government. The promise was unfunded.

So 50,000 jobs in the Motor Industry is not worth a $500 million subsidy.
1 job in the Federal Parliament, the PMship for Mr. Tony Abbott, is worth a $1 bn subsidy.
Taxpayers should feel…informed.


Actually, back on Hockster’s per job figure I’ve just calculated it. That’s a subsidy of $10,000 per job. Not $48,000 as per Hockster, who must be using direct jobs in direct car manufacturing alone even though he knows the direct manufacturing jobs support the entire component industry. Sneaky old Hockster.