ga('send', 'pageview');
John Passant

Site menu:



RSS Oz House



Subscribe to us

Get new blog posts delivered to your inbox.


Site search


My interview Razor Sharp 18 February
Me interviewed by Sharon Firebrace on Razor Sharp on Tuesday 18 February. (0)

My interview Razor Sharp 11 February 2014
Me interviewed by Sharon Firebrace on Razor Sharp this morning. The Royal Commission, car industry and age of entitlement get a lot of the coverage. (0)

Razor Sharp 4 February 2014
Me on 4 February 2014 on Razor Sharp with Sharon Firebrace. (0)

Time for a House Un-Australian Activities Committee?
Tony Abbott thinks the Australian Broadcasting Corporation is Un-Australian. I am looking forward to his government setting up the House Un-Australian Activities Committee. (1)

Make Gina Rinehart work for her dole

Sick kids and paying upfront


Save Medicare

Demonstrate in defence of Medicare at Sydney Town Hall 1 pm Saturday 4 January (0)

Me on Razor Sharp this morning
Me interviewed by Sharon Firebrace this morning for Razor Sharp. It happens every Tuesday. (0)

I am not surprised
I think we are being unfair to this Abbott ‘no surprises’ Government. I am not surprised. (0)

Send Barnaby to Indonesia
It is a pity that Barnaby Joyce, a man of tact, diplomacy, nuance and subtlety, isn’t going to Indonesia to fix things up. I know I am disappointed that Barnaby is missing out on this great opportunity, and I am sure the Indonesians feel the same way. [Sarcasm alert.] (0)



The Budget: waiting for growtho

This is a Budget built on illusion – the idea that growth will rocket to 4.5 percent in 2 years time.  It won’t.

The only people who might believe this, apart from Wayne Swann and Kevin Rudd, are Treasury.  They’ve analysed previous recessions in the 80s and 90s to come up with the runaway growth figure two years hence.

The problem they have is that these are different times.  Why not pick 1929 instead?

The 16 year boom in Australia, the speculation, the unproductive financial activity and long term low profit rates, have all contributed to the Great Recession, with no foreseeable return to recovery.

Profit rates are the key. They are extremely low around the world and the boom over the last decade has masked this.

We are at the beginning of the precipice, not its end.

Treasurer Swann predicts unemployment will reach 8.5 percent – one million – in June 2011.  But the figure in June 2010 will be 8.25 per cent.

It seems highly unlikely unemployment in the 2010/11 year will increase by only 0.25 per cent after it accelerates in the coming financial year by almost 3 percent from present levels.

This Budget is built on a remarkably small GDP decline of half a percent  for the next financial year, then 2.25 per cent growth the year after and 4.5 percent growth the year after that.

Treasury must be on economic happy pills.

But, to use Labor’s rhetoric of only a few days ago, this is uncharted territory. 

The IMF, the World Bank and other professional economists (who, admittedly exist to make astrologers look good) see the world economy shrinking by around 4 per cent next year.

Remember this. Every prediction these professional snake oil salesmen make has had to be revised downward.  The Great Recession makes their figures redundant quicker than a Detroit auto worker.

Australia will not be immune from the predicted 4 percent negative growth. In fact our open economy and capital import dependency mean the Great Recession is likely to hit us more deeply than other countries.

Our current seemingly better performance than most other countries is because of the lag factor, or, if you like clichés, it is the calm before the storm.

The predicted revenue decline over the next four years might give us a better picture of what is going to happen to the Australian economy since collections mirror economic activity over time. (It’s more complicated than that, especially sectorally, but it is, I believe, a good enough guide in these uncertain times.)

The Treasurer says that revenue will fall by about $210 bn over the coming four years. This is roughly four percent a year till mid 2013.

A 4 percent decline?  That’s eerily close to the IMF predictions for the coming year globally.

Some of the bourgeoisie and their paid political puppets have been talking about the green shoots of recovery.  Rudd and Swann are hanging on in the hope those hardy weeds become the Amazon jungle overnight.

They miss the point that this is El Gordo – the big one.  El Gordo does not wait for growtho; it destroys it.  That is its pre-ordained role.

To right itself capitalism must destroy itself.

The IMF calls this the Great Recession for one reason – the name the Great Depression has been taken already.

Like the Great Depression there will be ups and downs during this Great Recession – slight ups and huge downs.

The erratic bouncing that is the current economic bungee jumping will eventually stop dead.

This is a crisis of over-production, or if you like low profit rates.  No amount of stimulus packages or infrastructure spending will change that.

Treasurer Swann says the current stimulus package – $52 billion of handouts and some infrastructure spending – has increased GDP by 0.75 percent.

If that is the case, one obvious conclusion would be that a stimulus package of $200 billion would produce a GDP increase of around 3 per cent – enough to possibly halt unemployment increasing.

Swann and Rudd won’t do that for two reasons.  The economic cost of such deficit spending could wreck the capitalist economy.

Second it won’t work because the 0.75 percent figure is something the dodgy brothers could have dreamt up.

And if your system can only depend for its adequate functioning on massive Government spending to keep it alive what sort of system is it?   The life support can’t last for ever.

In fact Nation Building for Recovery is merely old spending re-badged. There is no massive new extra infrastructure spending.

A miserly $22  billion isn’t going to save capitalism.  As the economy worsens, there will be less goods and people to move on all these better roads, railways and ports. 

And all that extra speed in broadband should help who?  The one million unemployed as the banks kick them out of their recently acquired first home owners grant homes?

The green energy infrastructure proposals are a joke ,designed, like the pathetic Carbon Pollution Reduction(!) Scheme, to give the impression of doing something without actually challenging the rule of the profit junkies, the very essence of the problem.

When we need a Mandela we get a Magoo.

As the economy worsens, this infrastructure spending means we’ll end up with are a lot of white Swanns.

Certainly this ‘nation building’ spending will do nothing to increase profit rates.  Only the destruction of capital on a massive scale and major attacks on workers’ living standards can do that.

Spending won’t stop the sackings, or wage cuts or doing more with less.

So why haven’t Labor really gone on the offensive as I and many others predicted they would?

Rudd and Swann are biding there time.  This is the Budget for an election before the end of the year.

Then, once that minor inconvenience is out of the way and Labor have a second term, they can really attack workers.



Comment from Arjay
Time May 13, 2009 at 12:09 am

It is not a crisis of over production.It is a crisis of too much fiat money which has perverted the real economy.You are right,we are now in the eye of the hurricane but we can fight our way our successfully if we rid ourslves of debt and the Global Reserve Banksters.

See Paul Grignon’s Money as Debt .This is a must for all thinking people.

If we counterfet money ,we go to gaol.If the banking system does it,then it is monetary policy.

The fractional reserve banking system lets banks create 9 times the amount of real value they have in reserve.This means for every $ 25 million they create above real productivity,they are diluting the wealth of all Australians by $1.00 per person.This in reality is theft and this is why we have the present Global collapse.

Over production has nothing to do with it.Wall Street has killed main Street by virtue of perverting the course of the real productive economy.

Comment from Doric
Time May 13, 2009 at 3:30 pm

How refreshing to see a correct analysis. You are right, there will be no recovery, capitalism has run itself into a dead end once again.

One difference I believe is, unlike the 1929 collapse that was the precursor of WW2 and the eventual restabilization of capitalism based on the power of US industry, new wars of aggression ultimately resulting in a wider conflagration will not occur because the imperialist nations can no longer launch wars on the pretext of fighting for democracy or against terror. These lies have been exposed. It would be very difficult to mobilize Australians to fight against the Chinese or the Russians for example. It will be unacceptable. Look what happen when Israel launched a bloody attack on the Gaza, workers around the world were disgusted with Israel, but more importantly they were disgusted by the complicity of their own governments.

With the technical advances in communication—especially the internet—workers are seeing that governments everywhere are bailing out the financial elites while they are losing their jobs and their homes. The diametrically opposed class interests are being exposed on a world wide scale—sooner rather than later workers will be forced to enter the political arena and take matters into their own hands

Comment from Icuryy
Time May 14, 2009 at 3:48 pm

Swann has claimed that the optimistic growth is a Treasury prediction. This puts the acid on Keyn Henry who, in my opinion has no option but to resign if his department made no such prediction.

Comment from juan
Time May 16, 2009 at 12:03 am

Hi Doric, who the hell are those workers you talk about, are they any in Canberra?

Write a comment