Tuesday, February 28, 2012

Five reasons Aussies should feel smug

WE'RE not Greece, in case you were confused. I suppose our government's about as stable. But our collective fiscal funk has recently compelled Treasury supremo Martin Parkinson to point out this obvious geographical fact. So let's cut through the persistent gloom and doom and look at how our country stacks up.

1. Government debt and deficit

As a proportion of gross domestic product, the IMF says we owe 24 per cent. The US has racked up 100 per cent, Italy 120 per cent and Greece 152 per cent.

Yes we have a deficit - tiny by world standards. The IMF says it was minus 2.8 per cent in 2011 and the government has crossed its heart and hoped to (ahem) die that it will be a surplus by 2012-2013.

France's comparable figure was minus 5.7 per cent, Spain's minus 8 per cent and the US's - tut tut - minus 9.5 per cent. Greece's is ratcheting up so fast it will be wrong before I type it: the 2012 forecast is 6.7 per cent.

That country is now widely expected to default and Fitch's credit rating of "C" reflects it. Ours is "AAA".

2. Resources and economy

Remember we were the only Western nation that didn't go into recession during the global financial crisis. One of the reasons was mining.

An embarrassment of riches from resources means we can feed the insatiable industrialisation of developing Asia. Indeed, the governor of the Reserve Bank, Glenn Stevens, told Friday's parliamentary economics committee the boom is "still building" and "will take the share of business investment in GDP to its highest level for 50 years".

The mining tax - whatever you think of it - is designed to spread the proceeds.

Meanwhile, most commentators believe the EU is back in recession and Greece never climbed out of it.

3. Interest rates

Here they are relatively high on a world scale, precisely because our economy is strong and needs to be kept in check, but they're also far lower than they were in the 1980s.

As a consolation to mortgage holders, the RBA has a loaded gun if it needs to shoot its way out of another crisis. And if you are cashed up, you are laughing all the way to the proverbial.

4. Employment and wages

This is what's really making us uneasy. And it is hard to ignore headlines about mass redundancies in industries struggling due to factors like the high Australian dollar - for example, manufacturing - as they scramble to stay viable. Others - think retail and media - are under pressure because they're at the pointy end of dramatic consumption shifts.

But it's important to keep it in context. Unemployment last month actually fell slightly to 5.1 per cent, which boffins consider close to full employment. Although that is expected to tick up as global growth slows, some industries, like tourism and mining, are even reporting worker shortages.

Perhaps it's our comparatively cushy existence in Australia that causes us to fixate instead on cost-of-living pressures, however it seems we should stop our whinging. CommSec research using The Sydney Morning Herald archives shows we have far more purchasing power for goods - wages relative to prices - than our parents and grandparents 30, 40 or 50 years ago. Housing is another story.

Want a little more perspective? In Greece they're contending with unemployment of more than 20 per cent and a 22 per cent cut to the minimum wage.

5. Retirement

God bless super. As controversial as its introduction was - and however inadequate it ends up being - it's a salvation for our sunset years. What's more, it's in our names and our control. Many Greeks are instead getting 12 per cent wiped off their pensions.

So it seems Australians' confidence - which a global Nielsen survey of 56 markets has just found is the highest in the developed world - is justified.


Hold the hyperbole, Labor's problems are just same old same old

According to Barry Jones, a minister in the Hawke Labor government, the "current national situation" is at the lowest point he can recall. Writing in The Age on Saturday, he maintained that politics was worse today than when the ALP spilt in 1955, or when Arthur Calwell led Labor to a massive defeat in 1966, or when the governor-general John Kerr dismissed the Whitlam Labor government in 1975, or when Paul Keating lost to John Howard in 1996. As bad as that. He puts Labor's problems down to the inability of Julia Gillard and Kevin Rudd to work together.

For the most part, this is an exaggeration. In 1955, Labor split primarily over its approach to communism. The Labor split led to the creation of the Democratic Labor Party - it gave first preferences to the Coalition and saved Robert Menzies and John Gorton from defeat in 1961 and 1969 respectively.

Calwell's defeat in 1966 was Labor's eighth loss in a row and was not unexpected. Under the leadership of Bob Hawke and Paul Keating, Labor provided good government but Keating fell victim in 1996 to a feeling that it was time for a change. And in dismissing Gough Whitlam in November 1975, Kerr did Labor an unintended favour in that he diverted attention from the disaster that was the Whitlam government.

Certainly the opinion polls at the moment do not look good for Labor. However, like the Coalition, Labor invariably recovers relatively quickly from its darkest moments, provided the party does not split. Labor was down and seemingly out in 1966 and 1975 but back in office in 1972 and 1983 respectively. Labor's inability to win in 1998, 2001 and 2004 reflected the strength of the Howard government and Mark Latham's unsuitability in the last of these unsuccessful campaigns from opposition.

Jones believes that in the 2010 election "there was no debate about ideas" and there was "an infantilisation of debate on refugees and climate change". But it's just that Jones regards Tony Abbott's opposition to a carbon tax leading to an emissions trading scheme as inappropriate. Likewise with the Coalition's hard line on border protection. Opposing an emissions trading scheme and campaigning on border protection may be good policy or bad. But it is not infantile.

In any event, negativity does not amount to poor politics. Today Malcolm Fraser is a hero of the leftist-luvvies set and receives standing ovations at taxpayer-funded literary festivals. It was not always so. Fraser took over the Liberal Party leadership in March 1975. He proceeded to become one of the most negative opposition leaders in Australian history. Under Fraser's leadership, the Coalition defeated numerous Whitlam government bills in the Senate and eventually blocked supply.

In the 1970s, the most authoritative gauge of public opinion was the Morgan Gallup Poll, published in The Bulletin. The last poll taken when Fraser was opposition leader had his approval rating at a mere 29 per cent with a disapproval rating of 53 per cent. The Bulletin headed its report "Fraser's appeal at record low". Fraser went on to record the biggest victory in post-World War II Australia - despite campaigning on an ill-thought-through and, at times, contradictory policy agenda.

On ABC News Breakfast yesterday, 7.30 presenter Chris Uhlmann gave vent to the familiar Canberra press gallery refrain that Abbott's relatively low approval rating might mean he is replaced as Liberal leader. Experienced observers should know that what matters in polling is the party vote - not the leader's approval rating.

Jones, Kevin Rudd and more besides now refer to the events of June 24, 2010, when Gillard replaced Rudd, as a "coup". Not so. What happened in 2010 was not dramatically different from what occurred in 1941 (when Arthur Fadden replaced Robert Menzies), 1971 (when Billy McMahon replaced John Gorton) or 1991 (when Keating replaced Hawke).

Dictatorships have coups. Parliamentary democracies have leadership election ballots. In this system, prime ministers and opposition leaders are chosen by their peers. On The World Today yesterday, Rudd strategist Bruce Hawker declared that Rudd "won the public opinion war but lost the battle in the caucus". But Hawker knows that "people power" has no role in parliamentary democracies, where MPs choose leaders. It was no different when Keating replaced Hawke.

The electorate gets to choose a government in Australia every three years - it's up to elected members of the legislature to choose who will head the executive. Billy Hughes led the conservatives to victory at the 1922 election but stood down as prime minister when he found he did not have the support to form a government.

There is a lot of exaggeration around. However, there is in fact nothing all that unusual about contemporary politics in Australia.


Government cash keeping car industry afloat

GOVERNMENT subsides of more than $300 million a year are the only thing keeping Australian car making alive, says the man who led the small-car revolution that deposed the Holden Commodore.

Mazda Australia's Doug Dickson said subsides as high as $100 million a year for Ford, Holden and Toyota were the only thing keeping them alive as local makers.

The baby Mazda3 was officially Australia's favourite car last year, leading the Mazda boss to question the viability of the Commodore and Ford Falcon.

"If the car makers continue to get subsidies, they will remain here," Mr Dickson said. "It guarantees them dominance and gives them a competitive edge with fleets, government and private buyers, who like the fact that they are here."

Mr Dickson said he "desperately" wanted an Australian motor industry. "As an Australian, I don't care what they make as long as they provide the infrastructure for young Australians to become good at making things."

"As a industry figure I want the industry to be strong because we become a whole lot more important as an industry. Without manufacturing here we would just stand in a long line waiting for attention."


Australia's first 4G tablet on sale today

Telstra is from today selling the new Samsung Galaxy Tab 8.9, Australia's first 4G tablet, which it says allows users to surf the mobile web up to five times faster than on other models.

It comes as Australians flock to tablet devices, with analyst firm Telsyte estimating that 1.4 million tablets were sold in Australia in 2011. Over two million tablets are expected to be sold this year.

The Samsung Galaxy Tab 8.9 4G - which comes hot on the heels of the Motorola Xoom 2 that Telstra began stocking on February 21- runs Android 3.2 (upgradeable to 4.0 in the future) and includes an 8.9-inch screen, 1.5GHz dual-core processor and front- and rear-facing cameras (3-megapixel and 2-megapixel, respectively).

The device weighs 470 grams and is available in 16GB or 32GB configurations, which will cost $720 and $840, respectively.

Telstra said the 16GB model was in stores today while the 32GB would launch "shortly". There are both plans and prepaid options, with plans ranging from $29 for 1GB of data to $89 for 15GB of data.

"The leap in internet speeds available ... means customers can stream high-definition video and music over the internet, load magazines faster and enjoy rich internet content traditionally confined to a PC screen," said Telstra mobile executive director Warwick Bray.

Bray's pitch to businesses was that users would be able to get web speeds on the tablet that are comparable to those found in the office.

Telstra is in the process of rolling out its 4G network access the country, and it is already available in all capital cities plus more than 80 regional and metro4g politan centres.

The telco recently launched Australia's first 4G smartphone, the HTC Velocity 4G, which Telstra said was its third highest-selling consumer handset on a plan.

The first 4G devices offered by Telstra were wireless broadband dongles in September last year, and between then and the end of January Telstra said it added 100,000 4G subscribers.

Telstra says its 4G network is capable of download speeds between 2Mbps and 40Mbps, while upload speeds are between 1Mbps and 10Mbps. This is about double download speeds on 3G.

When the user is out of 4G coverage areas the tablet is able to revert to 3G, with dual channel HSPA+ support.


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