The Victorian election delivered a shock to the Liberal Party and joy to Daniel Andrew's Labor Party. Labor's majority in the new State parliament will be overwhelming and Liberals will be a shattered husk that seems unlikely to be competitive again for two four year terms at best. New South Wales may be the next domino to fall and the outlook for Federal Liberals looks grim.
How could this happen? we hear you cry. Premier Andrews has been busy abolishing rail crossings, building infrastructure paid for on borrowed money. The debt incurred seems not to bother Victorian voters. The Premier said when challenged on Sunday morning about his borrow and spend policy said with his policies, State debt would be' merely' equal to one year of State revenue. Australian households are in aggregate not far off being twice household income, making Australian householders world champions in the dangerous game of borrow and spend. When interest rates rise to more normal levels, as they must, many householders will be in trouble, as well as Daniel Andrew's borrow and spend government.
Apart from Labor's furious activity, and promise of more, other reasons for the collapse in popularity of Liberal politicians in Victoria included: 'A leader who failed to attack Labor or to cut through with attractive policies; the demise of Malcolm Turnbull in Canberra; Kelly O'Dwyer's superannuation tax heist; lack of funds; and ... name your own reasons, gentle readers. In my view, Liberal's lack of popularity is largely due to lack of a general Liberal economic narrative that promises spending restraint (allowing future tax cuts), strong anti-terror policies, more effective plans to keep bad people off the streets and plans for a national population policy that meshes with affordable infrastructure development.
Our great Trust Crisis
This is the theme of Paul Kelly's weekend missive, and strikes me as a very important hypothesis about political life in the democratic nations.
'The trust crisis derives from abuse of power and pursuit of self-interest by too many elites. Why did the government and parliament fail to protect consumers on energy policy? Why have corporate leaders been allowed to pocket huge remuneration and treat customers with a substandard service culture? How much does market concentration in our business sector promote self-sustaining networks devoid of real competition?
'Consider this week’s warning from Reserve Bank governor Philip Lowe. Highlighting that trust lies at the heart of a viable finance system, Lowe called for a distinction to be made between bad conduct and unsuccessful conduct (in terms of loan decisions). The distinction is pivotal.
'Lowe said: “We need banks to be prepared to make loans in the full expectation that some borrowers will not be able to pay them back.” In short, risk in lending cannot be fully eliminated and it is folly to try.
'Offering a dose of wisdom, Lowe said: “It is unrealistic to expect that an appropriate culture can be created through regulation and penalties. Creating the right culture is a core responsibility of boards and management.”
'Many will dispute this view. It is an enduring variation on an old theme — you cannot legislate for integrity.'
Read on gentle readers. This is a crucial issue that must be recognised and dealt with.
This article must be read by anyone wishing to improve the world.
Fiona Prior visits Nick Cave’s cavernous fairyland ‘Until’, only to discover that there are metaphorical syringes in this sandpit of sparkling dust. More here.
Predictably enough the Australian Rugby team, (with key players omitted for minor misbehaviour), held England to equal scores at half time (and a dud umpiring decision was required to get the poms to that position) but collapsed in the second half. I'm sticking by our lads, however, as my bones tell me better things will come soon.
Henry went with his older son, Bert, (who paid for the tickets), to the 'G' Friday night to watch the T20 captain snick the second ball of the innings to the Indian wicket keeper. Other batters also committed hari kari, perhaps wishing to get out of the drizzle for a hot cup of horlicks. The tail put on a fair recovery, but steady rain prevented any Indian batting. There goes Bert's $100 entry fees, Henry mused as Bert got us a cheap Uber ride to our respective homes.
The Aussie shielas have fared brilliantly in the world cup and we look for slight relief from them. But as previously noted, poor sporting achievement is usually negatively related to economic performance. Australia's currently booming economy confirms that hypothesis and any improvement on the sporting front might pose a threat to the economy.
Image of the week - thanks to Kudelka