http://theconversation.com/menzies-a-failure-by-todays-rules-ran-a-budget-to-build-the-nation-30823

Menzies, a failure by today’s rules, ran a budget to build the nation

Robert Menzies left Australia in far worse financial shape than he found it, at least according to current treasurer Joe Hockey’s favourite debt and deficit benchmark. Having inherited budget surpluses from the Chifley Labor government, the Menzies Coalition government ran small budget surpluses from 1949-50 to 1957-58.

But then Menzies’ “irresponsible profligacy” began, running budget deficits for the last nine years of his reign.

Between 1958-59 and 1966-67, Menzies averaged budget deficits of 1.8% of GDP. His biggest deficit of 3.3% of GDP in his final year in office was larger than the last Swan deficit, which the Abbott government has called a “disaster” and a “budget crisis”.

While Hockey borrowed his “lifters and leaners” line from Menzies, he has not borrowed his fiscal strategy. Spending as a percentage of GDP rose steadily and substantially under Menzies, from 19.4% of GDP to 24.5%. The public sector that Hockey so derides grew by around 25% while Menzies, a Liberal hero to prime ministers John Howard and Tony Abbott – as well as Hockey – was calling the shots.

Tax grew steadily under Menzies as well. The tax-GDP ratio rose from 19.6% of GDP to 21.2% over his time at the helm. Because tax didn’t rise as fast as government spending, the Commonwealth deficit grew steadily.

As budget deficits are typically funded by government borrowing, they usually result in an increase in public debt. Menzies had been paying off wartime debt early in his term, but debt increased to be at 41% of GDP when Menzies retired.

A history of public debt in Australia, Commonwealth Treasury (2009). Katrina Di Marco, Mitchell Pirie & Wilson Au-Yeung To put that into perspective, Commonwealth net debt stood at 12.5% of GDP at June, up from 10.1% in June 2013.

Commonwealth Treasury, Mid-Year Economic and Fiscal Outlook 2013-14
Menzies focused on the economy

So, what was Menzies up to? He clearly wasn’t obsessed with the budget deficits or worried about numbers of public servants that so concern Hockey. The economy grew quite steadily, often growing at more than 6% in real terms. Unemployment was mostly around 2% or less, and only 1.6% when he retired. Over his time in power, you couldn’t even argue that Menzies was trying to balance the budget over the business cycle.

Menzies was interested in nation-building. He not only wanted rapid population growth, but he wanted infrastructure growth and growth in the health and education services that make a society both cohesive and productive.

Like any successful corporate leader, he was willing to use long-run debt financing to fund long-run investments. Menzies knew that a lot of his budget spending was for capital projects that would deliver benefits for decades, so why should he have funded them entirely out of one year’s revenue?

Tony Abbott’s claim that ‘you can’t fix the economy unless you fix the budget’ would have bemused Menzies. AAP/Julian Smith
Hockey, on the other hand, wants to fund a big increase in infrastructure spending with no increase in tax and no increase in debt. He wants to fund more capital spending by cutting spending on essential services and income support for poor people.

The simplistic notion that a deficit is evidence that a government is “living beyond its means” is complete economic nonsense. Leaving aside that historic and international evidence provides no support for the claim that budget deficits cause long-run economic problems, the argument is contradicted by the corporate decision making that politicians pretend to emulate.

During the mining boom, BHP ran large and repeated “budget deficits”. The company’s annual reports provide clear evidence that BHP spent far more than it earned. But rather than criticise BHP for its “irresponsible” borrowing, shareholders reaped billions in dividends and watched their share price grow. How could this be?

Contrary to virtually every word spoken by our political leaders, there is absolutely no relationship between a budget surplus and a profit. They aren’t just different concepts, they are unrelated concepts. They have nothing in common except that people generally think both of them sound good.

Menzies’ deficits also owed something to his predilection for pinching ideas from Labor policies and implementing them, thus cutting off any perception by the electorate of the ALP as an innovative alternative to a Coalition govt. That meant he had to spend to provide whatever the ALP might be promising.

> Menzies had been paying off wartime debt early in his term, but debt increased to be at 41% of GDP when Menzies retired.

after WW2 fighting the war against communists……..and you know all that work on rocketry, guidance systems, ending with blue streak I think, must have cost quite a lot.

oh, and the work with nuclear arms

transition said:

oh, and the work with nuclear arms

You can’t hug a child with nuclear arms, man

http://en.wikipedia.org/wiki/Blue_Streak_missile

Doubts arose as the cost escalated from the first tentative figure of £50m submitted to the Treasury in early 1955, to £300m in late 1959. Its detractors in the civil service claimed that the programme was crawling along when compared with the speed of development in the US and the Soviet Union.

Estimates within the Civil Service for completion of the project ranged from a total spend of £550 million to £1.3 billion, as different ministers were set on either abandoning or continuing the project.

Whitehall opposition to the project grew, and it was eventually cancelled in 1960 on the ostensible grounds that it would be too vulnerable to a first-strike attack. Admiral of the Fleet Lord Mountbatten had spent considerable effort arguing that the project should be cancelled at once in favour of his Navy being armed with nuclear weapons, capable of pre-emptive strike.

Some considered the cancellation of Blue Streak to be not only a blow to British military-industrial efforts, but also to Commonwealth ally Australia, which had its own vested interest in the project.

The British military transferred its hopes for a strategic nuclear delivery system to the Anglo-American Skybolt missile, before the project’s cancellation by the USA as its ICBM program reached maturity. The British instead purchased the Polaris system from the Americans, carried in British-built submarines.

http://en.wikipedia.org/wiki/Robert_Menzies

Sir Robert Gordon Menzies, KT, AK, CH, FAA, FRS, QC (20 December 1894 – 15 May 1978), was an Australian politician and the 12th Prime Minister of Australia. He served over 18 collective years, first from 1939 to 1941 and from 1949 to 1966, and is Australia’s longest-serving prime minister.

> Robert Menzies left Australia in far worse financial shape than he found it

You won’t see me disagreeing with that.

Menzies was hopeless as a prime minister in both peacetime and wartime. It’s even said that he let himself get tricked into embroiling Australia in a war nobody here wanted – including him.

When World War I began, Menzies was 19 years old and held a commission in the university’s militia unit. He resigned his commission at the very time others of his age and class clamoured to be allowed to enlist. It was later stated that, since the family had made enough of a sacrifice to the war with the enlistment of two of three eligible brothers, Menzies should stay to finish his studies. Menzies himself never explained the reason why he chose not to enlist. It should be noted that the two brothers, James and Frank, who did enlist did not do so until 1915 after the landings at Anzac which belies the alleged reason

In 1938 his enemies ridiculed him as “Pig Iron Bob”, the result of his industrial battle with waterside workers who refused to load scrap iron being sold to Imperial Japan

http://en.wikipedia.org/wiki/Robert_Menzies

people are stupid

a man that is in the military yet resigns when a war appears and does his best to feed materials to an enemy that had already been marching around china and asia which then goes on to attack Australia

people kept voting him in

mollwollfumble said:

> Robert Menzies left Australia in far worse financial shape than he found it

You won’t see me disagreeing with that.

Menzies was hopeless as a prime minister in both peacetime and wartime. It’s even said that he let himself get tricked into embroiling Australia in a war nobody here wanted – including him.

Pig Iron Bob.

Menzies sent Australian troops to the Korean War

In 1965, Menzies committed Australian troops to the Vietnam War, as well as the reintroduction of conscription

http://en.wikipedia.org/wiki/Robert_Menzies

yet he wouldn’t go to war himself – what a weasel of a man

>While Hockey borrowed his “lifters and leaners” line from Menzies

feelings and even ideas corresponding with that have probably been around for a few hundred thousand years

transition said:

>While Hockey borrowed his “lifters and leaners” line from Menzies

feelings and even ideas corresponding with that have probably been around for a few hundred thousand years

theres a clip of joe moaning about the government making unis charge fees for tuition

the LNP is no more than a fifth column , labor isn’t much better mark arib is a perfect example – he was outed as an American spy through wikileaks that both labor and liberal want to kill.

its amazing that people vote the jerk offs we have in parliament now

stop voting for them, if you can’t decided rip your vote up , electoral fraud wins elections I’m afraid.

don’t overpost and undermine yourself, wookie, more is not necessarily better, try slamming your cock in a car door maybe and report back later.

transition said:

don’t overpost and undermine yourself, wookie, more is not necessarily better, try slamming your cock in a car door maybe and report back later.

I’m off now anyway

I’ve tried telling people their democracy is fucked and despite the obvious its a waste of time

next election I’m tearing my vote up and I encourage anyone else so inclined to do so, electoral fraud wins elections not voting I’m afraid

oh yes ballot papers have a habit of disappearing overnight when its not the right result

by simply tearing your vote up you are not agreeing to the governments authority over you , nor do you agree to their power over you – they simply have power over you backed up with men with guns.

vote by all means but it won’t save you either way

http://www.bordermail.com.au/story/2590565/indispute-cathy-mcgowan-wont-speculate-on-electoral-fraud-claims/

By NATALIE KOTSIOS
Sept. 29, 2014, 8:24 a.m.

Members of the joint standing committees on electoral matters that follow every election have repeatedly highlighted the system’s gross inadequacies, but the attitude of that supposed guardian of our democracy, the Electoral Commission, has consistently been defensive and dismissive of the need for change.

As former MP Ted Mack put it: “If you ask the Electoral Commission to investigate its own running of the election, it will always come up smelling roses.” The Howard Government, when it controlled the Senate, had the opportunity to legislate for ID at the polling booth, but never ran with the ball.
News Weekly, November 13, 2010

but then again, the electoral process has always been broken in Australia

Richmond, an inner suburb of Melbourne, was constituted as a municipality in 1855. From the outset, its politics were characterised by something less than genteel civility. At the first municipal election, one of the returning officers was himself elected, along with six non-residents of the district, including the British Secretary of State. In the aftermath of the election, angry residents petitioned the Governor of Victoria to disallow the returns, alleging that many electors were debased with drink, and that supporters of both sides in the contest had impersonated voters (Barrett 1979).

Electoral fraud in Richmond took two basic forms. The first was good old-fashioned multiple voting. This involved the impersonation of individuals whose names were on the electoral rolls, but who for various reasons, such as the fact that they had died or had moved away from the municipality some years before, were disinclined to vote.

The second type of fraud involved tampering with ballots. On two occasions, there was evidence of seals having been broken on bags containing ballots. In both of these elections non-labor candidates who appeared to have won, lost their seats after a recount.
http://www.aic.gov.au/publications/previous%20series/lcj/1-20/wayward/ch18.html
Canberra : Australian Institute of Criminology, 1989

electoral fraud in Australia is as aussie as beef pie and kangaroos

dv said:

Contrary to virtually every word spoken by our political leaders, there is absolutely no relationship between a budget surplus and a profit. They aren’t just different concepts, they are unrelated concepts. They have nothing in common except that people generally think both of them sound good.

Certainly the message put out by Hockey and Abbott is overly simplistic, but so is that statement.

The fact is, there is a relationship between budget surplus and profit, it’s just more complicated than saying at any given time surplus = good and increased debt = bad.

What we need is a political party with the guts to say that taxes need to increase, and a leader with the charisma to say that they intend to do that, and still win an election.

taxes don’t need to rise

the people who aren’t paying tax need to start paying

close ALL of the tax loop holes and any way to reduce tax

you get rid of negative gearing and paying into super annuation accounts of rich people

you get rid of “ trust “ status

don’t worry , people are stupid, I had one lady living in a council flat that say and watched all the GST adverts telling people how good life was going to be with another tax . needless to say her initial enthusiasm wore off when weeks afterwards she realised that her bills had increased.

wookiemeister said:

taxes don’t need to rise

the people who aren’t paying tax need to start paying

close ALL of the tax loop holes and any way to reduce tax

you get rid of negative gearing and paying into super annuation accounts of rich people

you get rid of “ trust “ status

don’t worry , people are stupid, I had one lady living in a council flat that say and watched all the GST adverts telling people how good life was going to be with another tax . needless to say her initial enthusiasm wore off when weeks afterwards she realised that her bills had increased.

You had better write to Joe and tell him that. I bet he never thought of it.

The Rev Dodgson said:

wookiemeister said:

taxes don’t need to rise

the people who aren’t paying tax need to start paying

close ALL of the tax loop holes and any way to reduce tax

you get rid of negative gearing and paying into super annuation accounts of rich people

you get rid of “ trust “ status

don’t worry , people are stupid, I had one lady living in a council flat that say and watched all the GST adverts telling people how good life was going to be with another tax . needless to say her initial enthusiasm wore off when weeks afterwards she realised that her bills had increased.

You had better write to Joe and tell him that. I bet he never thought of it.

joe got a virtually free ride through uni

The Rev Dodgson said:

You had better write to Joe and tell him that. I bet he never thought of it.

He certainly thought of it.

But, given the economic demographic to which the L/NP is beholden, he’s smart enough to never say or do anything about it.

The Rev Dodgson said:

dv said:

Contrary to virtually every word spoken by our political leaders, there is absolutely no relationship between a budget surplus and a profit. They aren’t just different concepts, they are unrelated concepts. They have nothing in common except that people generally think both of them sound good.

Certainly the message put out by Hockey and Abbott is overly simplistic, but so is that statement.

The fact is, there is a relationship between budget surplus and profit, it’s just more complicated than saying at any given time surplus = good and increased debt = bad.

What we need is a political party with the guts to say that taxes need to increase, and a leader with the charisma to say that they intend to do that, and still win an election.

So, a miracle, then

dv said:

What we need is a political party with the guts to say that taxes need to increase, and a leader with the charisma to say that they intend to do that, and still win an election.

So, a miracle, then

We need a war which threatens the positions of capital and privilege in our society. Under those circumstances, any and all measures can be sold as ‘necessary’ to those who would otherwise prohibit them, and kept in place after the end of the conflict.

dv said:

The Rev Dodgson said:

dv said:

Contrary to virtually every word spoken by our political leaders, there is absolutely no relationship between a budget surplus and a profit. They aren’t just different concepts, they are unrelated concepts. They have nothing in common except that people generally think both of them sound good.

Certainly the message put out by Hockey and Abbott is overly simplistic, but so is that statement.

The fact is, there is a relationship between budget surplus and profit, it’s just more complicated than saying at any given time surplus = good and increased debt = bad.

What we need is a political party with the guts to say that taxes need to increase, and a leader with the charisma to say that they intend to do that, and still win an election.

So, a miracle, then

Not really. Tony Blair did it. Turnbull could probably do it, if he so chose.

The Rev Dodgson said:

dv said:

The Rev Dodgson said:

Certainly the message put out by Hockey and Abbott is overly simplistic, but so is that statement.

The fact is, there is a relationship between budget surplus and profit, it’s just more complicated than saying at any given time surplus = good and increased debt = bad.

What we need is a political party with the guts to say that taxes need to increase, and a leader with the charisma to say that they intend to do that, and still win an election.

So, a miracle, then

Not really. Tony Blair did it. Turnbull could probably do it, if he so chose.

I think it will probably require an increase in maturity among the voting public and among the political class.

dv said:

The Rev Dodgson said:

dv said:

So, a miracle, then

Not really. Tony Blair did it. Turnbull could probably do it, if he so chose.

I think it will probably require an increase in maturity among the voting public and among the political class.

Now, that would be a miracle.

Certain things needs to be “above the radar” in the political discussion. There needs to be meaningful carbon pricing. There needs to be a level of debt that increases during slow times and decreases during the good times. There needs to be an increase in overall taxation to the levels of the early Howard years. There needs to be a resource based sovereign wealth fund. There needs to be more spending on infrastructure.

And then the parties can debate on other things. A more cooperative approach to nationbuilding is needed. The present batch of Libs would argue black is white if they thought it would give them an edge in winning an election. The adversarial model is wasteful and acts as a brake on reform. No one in opposition wants to see good times for the government: it is a winner-takes-all system.

Sometimes I think the German model of having several parties in government with proportional representation. The current government is a coalition between the conservatives and the social democrats.

But really what needs to happen is for the public to become more politically and economically literate so that they can recognise bad behaviour and stop rewarding it and I don’t know how that is going to happen. Abbott led the conservatives back to power with a stack of bullshit: in all likelihood they are going to be thumped at the next election, and at current polling they are looking like losing 35 seats, a record loss for any party, but will anyone remember these lessons next time? It is going to take a term for the ALP to fix what has been done so we’re set back six years.

In 2006 there was bipartisan support for carbon pricing, with the coalition putting forward a perfectly reasonable and sound model. The major parties were presenting somewhat different models for consideration. Now we’ve just seen the dismantling of a demonstrably successful carbon pricing scheme: it’s such a wasteful and pointless reversal. The ALP won’t be campaigning on it for the 2016 election, but hopefully will have the confidence to have it as a policy in 2019, so maybe around 2020 it will be in place. 14 years right down the shitter.

> A more cooperative approach to nationbuilding is needed.

Yes. Let’s all get behind Toned Abs, the Infrastructure Prime Minister..

We could build a bridge out of him.