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  • Writer's picturePete Jonson

Sunday Sanity Break, 31 July 2016

Now Grace Collier has joined the battle to kill the Turnbull/Morrison/O’Dwyer attempt to tax superannuation of well-to-do Australians. Her most powerful point is to quote Kelly O’Dwyer and Scott Morrison asserting superannuation earnings would never be taxed by a Liberal. For example: “We on this side have given an undertaking not to muck around with superannuation … We understand the importance of certainty when people are sacrificing and saving for their retirement. We understand the importance of good and responsible economic management so that the government does not have to put its hand in the pockets of the retirement savings of Australians. It is quite, quite wrong. That is why we will stand up for all Australians who want to work hard … and be rewarded for their efforts. They should not be penalised.”

Read Ms Collier’s powerful article here.

And here is the final paragraph of the article, hinting at an expose to come. ‘It defies belief that a Coalition government would act so foolishly. The question is this: exactly who came up with this stupid idea? The hunt is on, a team of insiders is collecting evidence and the answer is expected in the near future’.

Coming severe recession?

In 2013, Henry said Australia was headed for recession. We had an income recession but not a spending recession. The question is whether actions to shore up spending have (successfully) avoided a spending recession and maintained sluggish employment growth.

Now we have an answer, from an economist far more chronically pessimistic than Henry. Professor Steve Keen of Kingston University in London.

The lead in: ‘Australia's credit binge will lead to a bust as soon as next year, with house prices to fall between 40 and 70 per cent and unemployment to rise sharply, Professor Steve Keen says’.

“Many believe the Reserve Bank has been a steady guiding hand to the Australian economy in the years since the GFC, but Professor Keen believes it has guided the economy "straight toward the shoals" by encouraging households to borrow with low rates which has led to asset bubbles.

"They don't know what they're doing," he said.

"Our debt level according to the Bank of International Settlements, private debt level, has gone from 150 per cent of GDP to 210 per cent of GDP."

‘He argued that means a large part of the growth that Australia has enjoyed since the GFC, while many other countries plunged into recession, has been fuelled by a 60 per cent rise in household debt’.

"Ireland did the same thing when they called themselves the Celtic Tiger and they don't call themselves that anymore," he said.

"Spain was doing the same thing during its housing bubble and we've replicated the same mistakes".

We’ll know soon enough. Full article here.

Return of the Native

Henry tomorrow gets on an aeroplane from Nairobi to Doha, then another from Doha to Melbourne. We look forward to catching up with all the news missed while we were seeing wild animals on safari.


Fiona Prior sees Sydney Theatre Company's latest production, Angela Betzien's The Hanging. Have you ever wondered what really happened to those school girls at Hanging Rock? More here.

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