Budget Smudge it

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HOPE
Creative Commons License photo credit: DieselDemon

Renegade Economists Podcast 89


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As broadcast on the almighty www.3cr.org.au on Wed May 13th.

Show Notes: More speculative handouts revealed in this unique budgetary analysis. Dr Gavin Putland is our guest this week as he analyses the pro’s and con’s of the pandering to lobbyists. Anything in italics is our additional commentary and not the authors.

How $539 million turns into a $4.6billion handout for the lucky few.

19% larger First Home Owners loan between Feb this year and last year – $52,700!

268,200 av FHOG loan in Jan 09,
280,600 Feb 09 – 4.7% jump

anyone’s wages gone up 5% in the last month?

Can u see the asymmetry between slavery and rent hikes?

Farewell to fairyland: It’s time to give back

Well, brothers and sisters, that is the way it’s going to be from here on. In the good times, the Howard government slashed income tax so deeply, particularly for high-income earners, that it has fallen from 12.5 per cent of gross demostic product (GDP) to 10 per cent. This has transferred almost $30 billion a year from the Government to us. It has helped put the Government into deep deficit, and now the Government must find ways to get it back.

In its last 10 years, the Howard government ran up $103 billion of surpluses. In the next five years, the Rudd Government, even after all these savings, is contemplating $219 billion of deficits.

Things will get a lot nastier — particularly when the Henry review of taxation sets out to reduce tax breaks seriously.

But life should not be this nasty for the unemployed. How could Labor, the battlers’ party, ignore the pain of those who lose their jobs and tell them to survive on $32 a day?

Ridiculous plan at heart of pension rise By Alan Kohler

The increase in the old age pension of $2.7 billion in 2009-10 is all borrowed.

And tellingly, the report on which the decision is based – Dr Jeff Harmer’s Pension Review commission last July and published in February – does not actually recommend an increase.

The Budget papers say: “The findings of the Harmer Pension Review have been central in framing the reform of the pension system.”

Jeff Harmer’s key finding was that single pensioners aren’t paid enough relative to couples – that the gap is too great. But he also found: “… The rate of pension paid to couples appears to be adequate.”

So Wayne Swan’s recession Budget, amazingly, has as its central plank a debt-funded increase in old age pensions that is recommended by the review on which it is based and provides an incentive to retire when all other policy is aimed at encouraging people to keep working.

Kohler excellent! incentives are for boomers to retire and speculate

From the budget papers – Infrastructure Overview

The Northbridge rail link (the Hub) represents the important first stage of an urban redevelopment project
for Northbridge

The Government is investing $236 million to sink the central city section of the Perth to Fremantle railway line
and construct a new rail platform. This will mean around 50,000 square metres of land will become available for
urban redevelopment. This newly available land offers significant opportunities for development and growth.
Why isn’t this land being leased or a Land Value Capture component being included so we can share some fo the ensuing land bounty that will occur? That’s why our deficit is so great. Poor tax policy.

$1.3b to help close Indigenous divide

However the full amount of the Federal Government’s Indigenous funding will not be rolled out for another 10 years.

Of these funds, $807.4 million will go towards closing the gap in the Northern Territory and will include safety measures for women and children, police training and new police stations.
***close divide by increasing the police state????

Clean energy gets $4.5b Budget boost

The Federal Government has committed $4.5 billion to clean energy in the 2009-10 Budget ….

The funding will include $2.4 billion in low emissions coal technologies as well as $1.6 billion to position Australia as a world leader in solar energy technology.

Under the plan, which includes $1 billion in existing funds, the Government aims to have 20 per cent of Australia’s electricity coming from renewable sources by 2020.

First-home owners rush for loans

The number of home loans, seasonally adjusted, increased 4.9% in March from an upwardly revised 1.2% in February data from the Australian Bureau of Statistics, marking the sixth consecutive month of increases.

Australian Major Banks’ Bad Debts Hit 16 Year High

The banks’ results were, however, significantly impacted by a near-trebling of bad debt expenses to $6.5 billion – a 16 year high – up 178% per cent over the prior corresponding period.

Goldman Sachs Pays $60m to stop sub-prime investigation

In the first major settlement involving Wall Street’s role in the subprime mortgage business, the Goldman Sachs Group agreed on Monday to pay up to $60 million to end an investigation by the Massachusetts attorney general’s office into whether the firm helped promote unfair home loans in the state.

The money will be used for a loan modification program that would allow Massachusetts homeowners with mortgages from Goldman entities to write down their principal balances by as much as 50 percent.

The program requires Goldman to reduce the principal on first mortgages by up to 30 percent and on second mortgages by up to 50 percent. It would be one of several such programs throughout the country. But the complications involved in changing the terms of securitized mortgage packages, resistance by some lenders and controversy in Washington have slowed the start of many of these programs. Of the $60 million settlement, $50 million will go to reworking loans in Massachusetts, with the rest going to the state.

Music

Culture Zap – Girlfriend revolution
Winnie the Shit – I Love You

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