#alp

ABC goes bananas but slips up on cold truths that split the narrative

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On March 18,  CM wrote about the gross inefficiencies at the ABC, which have rapidly deteriorated over time. We said,

Since 2008, the average salary of ABC’s staff has risen 25% from $86,908 to $108,408. Total staff numbers have risen from 4499 to 4769. Therefore salaries as a percentage of the ABC revenues have risen from 37.1% of the budget to 50%. The ABC’s ability to generate sales from content has fallen from A$140mn to A$70mn last year. The multicultural SBS has seen its budget grow from A$259mn in 2008 to A$412mn in 2017. SBS staff numbers have grown from 844 to 1,466 over the same period with average salaries rising from A$82,689 to A$88,267 or 7.2%. Which begs the question why is the SBS able to operate at 31% of the budget in salaries while the ABC is at 50%? Surely the ABC’s economies of scale should work in its favour? Clearly not.

According to The Australian, in response to the budget cuts coming over the following three years,  the ABC responded today with,

The ABC says there is “no more fat to cut” following the federal government’s announcement to slash $84 million in funding from the public broadcaster…News director Gaven Morris has hit back at the three-year funding freeze announced in Tuesday’s federal budget, which maintains more than $1 billion a year for the broadcaster.

“Make no mistake, there is no more fat to cut at the ABC. Any more cuts to the ABC cut into the muscle of the organisation…We’re as efficient as we’ve ever been…We’re the most minutely scrutinised media organisation in Australia…$84 million over three years, there is simply no way we can achieve that without looking at content creation and certainly looking at jobs within the organisation.”

Well perhaps if the ABC stop airing radical feminists who demand that parents seek approval from their babies when changing nappies or called conservative politicians who served in the military as “c*nts” perhaps it might justify for more budget.

It is a pretty simple. Online media pretty much allows such a wide array of choice that we do not need a taxpayer funded media (which readily breaches its code of conduct with regards to political bias) to provide so much content.

We have multiple ABC TV & radio stations plus multiple websites. One could argue for one each. We certainly do not need to give the ABC more money to expand its platforms to make up for a shortfall in quality content to arrest declining market shares.

If everything is so great then why is our political scene so broken?

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Queensland’s state election said it all. Both the incumbent parties lost massively even though the incumbent Labor Party looks like holding on to power. While Pauline Hanson’s One Nation party looks like it fared poorly in terms of seats it still got 13.8% of the vote from 1% in 2015. Forget the headline results but think of what the political turmoil In local, state and federal levels is telling us more broadly.

Think logically about it all. If the economy is booming, jobs are abundant and prosperity is on the march then there is little need for governments to be running deep deficits let alone facing hung parliaments and acts of desperation. Surely the incumbent governments of the day can laud their own achievements and their constituents would happily keep returning the status quo. The majority should continue to be happy. More by rights should be winners in such a world of record housing prices, steady wage growth, low unemployment and 25 years of economic growth as experienced in Australia.

Yet PM Turnbull turned on many of the traditional supporters of the conservative wing of his Liberal National Party (LNP) coalition who turned their back on him to hand Labor the victory in Queensland. Not so fast Prime Minister. They didn’t leave the party. The party under your incompetent stewardship left them. At all levels the LNP is divided. There are some quarters suggesting that the Nats may split from the Coalition in the next election in Queensland to leave the stench of the Liberal Party to themselves. This is when personal ambition trumps wish to serve a nation.

While the LNP was handed the most valuable and recent lesson of the disaster that was the Rudd-Gillard-Rudd internal factional knifing during their time in power, it completely buried its judgement and started following a left leaning press, weak poll numbers and copied Labor’s folly. Now we have a hung parliament (not withstanding the dual citizenship fiasco) with chronically weak and misguided leadership. One that tells voters that they have no clue rather than introspection that the party may indeed be the problem.

It used to be said that Australia enjoyed the most stable politics in the Asia Pacific region. That encouraged foreign investment and gave Australia low interest rates, a superior credit rating and a regulatory platform that ensured trust (important for corporations), the envy of many nations. Yet inside a decade we have had 5 (soon to be 6) prime ministers which has thrown that ‘reputation’ in the toilet. In a world where international capital is more mobile than ever and asset prices are peaking, instability in government eventually carries severe financial market penalties.

For Aussie banks, levered up to the gills with inflated mortgage books on their balance sheets, such things have negative implications for the 40% reliance on global wholesale credit markets to fund themselves in the face of a tightening US interest rate cycle. Do not underestimate the negative connotations of a federal government that has lost its way, no matter which major party is in power. Where the average Aussie can’t bear anymore on the mortgage, a third admitting they can’t pay the home loan if they lose their job for 3 months or more. Almost 1,000,000 Aussie households would be in severe mortgage stress if rates moved 150bps(1.5%). Think of the spill-over effects on consumption which would only lead to a recession and lay offs, exacerbating a cycle, all the while bashing the currency making international funding even more biting. If only we had a stable government that had a decent fiscal position to weather that storm. Oh, that is right we squandered that in 2008.

One Nation in Australia, AfD in Germany, Party for Freedom in The Netherlands, Front National in France, 5 -Star Movement in Italy, Fidesz in Hungary, FPO in Austria, the Sweden Democrats, Vlaams Belang in Belgium,  Progress Party in Norway, Trump, Brexit…these patterns aren’t random. It isn’t just populism but protest votes to establishment parties that aren’t delivering. While we are constantly told how great our lot is, sadly the gap between haves and have nots is widening globally. Politicians who are ditching political correctness and making waves on publicly uncomfortable issues are thriving. Why could that be?

Donkey (informal) votes in Australia have seen numbers soar from 2.2% in the 1950s to over 5.0% in the 2016 election. Some electorates in NSW saw as high as 14% informal votes. These are powerful messages in a country that has compulsory voting, which has slid to 90.9%.

The sad reality is that the electorate is making louder noises every election that things are not pointing in the right direction yet the muppets are still being returned to their box seats on a dwindling majority. Why? Because not enough voters are heeding the warning signs that are sounding in front of them. Of course politicians still continue to sell comforting lies backed by ever more unaffordable promises to keep themselves in power for as long as possible when we all need to be facing the unpleasant truths that will happen whether we like it or not.

Indeed those deplorables who voted One Nation might have spurned the LNP but not without good reason. In time, they will be viewed as the wiser ones. Not because they necessarily believe in Pauline Hanson’s platform but because they believe in Turnbull and Shorten’s even less. It all rings like a Premier League football coach making a litany of excuses for his team’s woeful performance that ignores the fact that the collection of individuals have absolutely no cohesion as a team. All the fans can do is bury their heads in their hands until the point they can’t bear to watch another game until the coach is sacked.

Snigger if you have to but the bigger trigger is in the voter figures

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The latest Galaxy Poll ahead of the Queensland state election on Nov 25 has the One Nation party surging to 18% of the vote. It was a mere 0.9% in 2015. Once again the stench of the two major parties completely buried in political correctness and tip-toeing around issues that are bothering voters are losing their core supporters. Say what you like about One Nation leader Pauline Hanson’s “in yer face” style but it appears to be working. For all those that look at anyone who would vote for her as being a bigot, racist or fool, the major parties must do soul searching as to why a growing number of voters would look to select her.

It is one thing to ridicule her voters. It is more telling that these mainstream parties can’t seem to win their trust via sensible policies of their own. Surely even bigots and racists have enough common sense to vote for parties that have the best balance of law making. Yet the LNP and Labor parties continue to bleed support heavily.

Yes we can jump to conclusions by pinning it on the “populist” thematic that seems to be sweeping across the world. People are growing sick on tired of governments that lack accountability, The mass screw ups in public policy. They’re sick of seeing limp wristed responses and more laws that gag voters who question their incompetence.

So to mainstream parties across the world. You need to look within rather than blame voters. You either have dreadful delivery, policy that is out of touch or both. Still you will eventually learn that experience is a hard teacher – you get the test first and the lesson afterwards.

 

The McTurnbull Burger – 2017 budget that says ‘waistline be damned!’

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Remember the Big Mac jingo? “Two all beef patties, special sauce, lettuce, cheese, pickles,  onions on a sesame seed bun?”  Well the 2017 budget From the Coalition might as well be called the super sized McTurnbull Burger. Two all thief parties, special porkies, levies, fees, spun on a $600bn dollar bomb. While the government needed to introduce a vegan budget of lentils, tofu and alfalfa to get the country’s nutrition properly sorted they’ve said waistline be damned. Morgan Spurlock couldn’t keep up with this super sized meal. As my wise sage Stu told me last week, “About as well-timed as Mining Super Profits tax – ding ding ding – top of the banking cycle just called by inept bureaucrats”

If people wanted a tax and spend party they’d have voted Labor. In a desperate attempt to supersize the meal they’ve made of the economy since Turnbull took office the debt ceiling will be raised. Wage growth has slowed for the past 5 years from 4% to under 2% according to the RBA. Throw higher Medicare on top why not?!. Cost of living is soaring. So let’s look at the extra calories they’ll inevitably load on the taxpayer.

1) Let’s tax the big 4 banks. That’ll work. What will they do as responsible shareholder owned organizations? Pass those costs straight on to the tapped out borrower where 1/3 mortgagees already under strain and 25% odd have less than a month of buffer savings. NAB already jacked interest only loans 50bps.

2) allowing retirees to park $300,000 tax free into super if they downsize their empty nest. Wow! So sell your $5mn waterfront property so you can park $300k tax free into superannuation. Can see those Mosmanites queue up to move to Punchbowl to retire. Hopefully the $1mn fibro former council shack the Punchbowl pensioner flips will mean they can move to a $500,000 demountable in Casula in order to free up the property market for the first home buyer who is getting stung with higher interest rates, .

3) Australia has a property bubble. The Reserve Bank has recently had an epiphany where they’re afraid to raise rates to crash the housing market and they can’t cut because they’ll fire it up more. Allowing creative superannuation deposit schemes (max $30,000 per person & $15k/year) to help with a deposit only doubles down on encouraging first home buyers to get levered up at the top of the market using a system designed to build a safety net for retirement. When governments start abusing sensible policies in ways it was never designed for then look out for trouble down the line. This doesn’t help first home buyers it just pushes up the hurdle to enter.

4) Australia’s credit rating is on the block. Australia’s main banks are 40% wholesale financed meaning they have to go out into the market unlike Japanese banks which are almost 100% funded by their depositors. Aussie banks could see a rise in their cost of funds which the RBA could do little to avoid. That will put a huge dent in the retail consumption figures.

5) speaking of credit cards. Have people noticed that average credit card limits have not budged in 7 years. If banks are confident in the ability of consumers to repay debt, they’d let out the limits to encourage them to splash out! Not so – see here for more details.

6) Infrastructure – I live in the land of big infrastructure. Jobs creation schemes which mostly never recover the costs – especially regional rail. The Sydney-Melbourne bullet train makes absolute sense. We only need look at the submarines to know that waste will be a reality.

7) small business – tax concessions of $20,000 not much to write home about. Small businesses thrive on a robust economy which is unlikely to occur given the backdrop. Once again this budget is based on rosy assumptions and you can bet your bottom dollar Australia won’t be back in surplus by 2021.

Some  media are talking of Turnbull & Morrison stealing the thunder of the Labor Party, providing a budget more akin to their platform. Sadly I disagree that this legitimizes Turnbull. It totally alienates his base, what is left of it. Tax the rich, give to the poor. Moreover voters see through the veneer. The stench of the Coalition is so on the nose that without ditching Turnbull they have no chance of keeping office. Labor is not much better and One Nation and other independents will hoover up disaffected voters by effectively letting the others dance around the petty identity political correctness nonsense.

In the end the McTurnbull Burger meal will look like the usual finished product which resembles nothing like the picture you see on the menu. A flattened combination of squished mush, soggy over-salted fries and a large Coke where the cup is 90% ice. Yep, the Coalition has spat between your buns too. This is a meal that won’t get voters queuing up for more. Well at least we know Turnbull remembers that smiles and selfies are free after all ‘he’s lovin’ it‘! After all virtue signaling is all that matters. All this to arrest some shoddy poll numbers which will unlikely last more than one week.

Good on Bill Shorten (for a change)

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For once I’m going to pat Bill Shorten on the back. I’m not a fan of the Australian Labor Party (ALP) or the current Turnbull Coalition to be honest but Shorten’s ad is harmless. What is it with the regressive left that has to mock those in the ad? Instantly it gets the identity politics treatment. Because they’re all white. Assuming they put some other ‘colours’ in the ad then the next level of identity would come into play. How many LGBT were used? Then if that had been checked off then how many religions were represented? You can’t win. What if those ‘whites’ in the ad are LGBT, Buddhists or Muslims? It would be a bigger outrage if one was a Jew! We don’t know but by pure deduction we see memes accusing him of the ‘White Australia Policy”. Bill Shorten is a dyed in the wool trade unionist but the only thing he really shares with former Prime Minister Billy Hughes is the name. When will society grow up? If we have to check off boxes to guarantee inclusion then we set off the exact triggers for victimology to run riot. Why can’t merit decide who gets selected? Pathetic.