2007 Federal Budget (1 Viewer)

[menelaus]

Did he forget to mention the term 'mining boom'?

no, im pretty sure that when the abc journos were asking him something, they mentioned the mining boom, and to avoid the question he said "what minig boom" or "there is no mning boom" and both journos laughed.

 

[Nebuchanezzar]

Interesting statistics frog. Not being an expert on economics and such, I went to consult wikipedia. It seemed to indicate that it's the biggest overall sector of our 'economy' 'n' such, apart from the broad category of services. It also said summat about mining being 75% of our exports.

http://en.wikipedia.org/wiki/Mining_in_Australia
http://en.wikipedia.org/wiki/Economy_of_Australia

But...that means nothing, right?

 

[banco55]

Interesting statistics frog. Not being an expert on economics and such, I went to consult wikipedia. It seemed to indicate that it's the biggest overall sector of our 'economy' 'n' such, apart from the broad category of services. It also said summat about mining being 75% of our exports.

http://en.wikipedia.org/wiki/Mining_in_Australia
http://en.wikipedia.org/wiki/Economy_of_Australia

But...that means nothing, right?

Perhaps Gillard should look these figures up since the mining industry says abolishing AWA's will seriously screw them.

 

[frog12986]

Australia's primary and resource industries have ALWAYS been important, and has not merely arisen since the 'mining boom'. I never understated the importance of mining, but merely highlighted there is extensive growth etc in other sectors, and to merely attribute the current growth and prosperity to mining is over-simplifying the process..

You have nonetheless overstated the statistics. It says that mining AND agriculture collectively comprise 65% of our exports, mining accounting for around 35%. Moreover, it also states that mining comprises of around 5.6% of GDP, which is of course relatively small.

 

[Nebuchanezzar]

Australia's primary and resource industries have ALWAYS been important. Not just since the 'mining boom' has occurred.

Good. So you admit that having someone as supposedly incompetent as Wayne Swan in charge of the economy (that ignores the fact that the treasury does most of the management, but im getting off topic) will do no harm to an economy that largely runs off the mining sector, albeit ever heading towards dominance by the services sector. kthxbye.

I'm a big fan of nuclear power btw, it's just a bit uneconomical to suggest that Australia should depend soley on it. I read somewhere last week (probably in the Herald) that only 2% of the worlds power could run off uranium and such. It's all well and good to export it, but you know, it's a bit of a dead end.

 

[frog12986]

..an economy that largely runs off the mining sector, albeit ever heading towards dominance by the services sector. kthxbye.

You are still talking rubbish. Heading towards dominance by a services sector? Australia has always been a predominantly primary and tertiary industry based economy. Manufacturing and the like, have never been an integral part of the Australian economy and developed more out of the quest for self-sufficiency more than anything else. Primary industries (agriculture and resources) have been important in terms of exports, but to suggest that it is the heart of the economy is absurd.

Did you ignore the statistics you provided? 35% of exports and a huge 5.6% of GDP (approx.) is the contribution of the mining sector. If the economy largely runs off those type of numbers, we're in trouble..

 

[Sparcod]

frog12896- I think he's implying that that 5.6% of the GDP is actually contributing a lot to the economic growth at the moment. Mining happens to be the most important industry in much of WA and NT and economic growth rates are through the roof.

Bear in mind that jobs created by the mining boom does not reflect how fast it is growing. It's around 9th on the job-growth list but if the mining industry doubles the money its making, should it double the number of jobs in that sector?

Perhaps Gillard should look these figures up since the mining industry says abolishing AWA's will seriously screw them.

At least Rudd is making an effort to reconcile and negotiate with the mining companies.

 

[Sparcod]

Reflections on the global economy and the Australian mining boom
- scroll down to page 16 and you'll see how much trade has increased since 1996.

frog12896- according to the stats you provided, job growth was highest in construction whereas mining came ninth.

Read this: http://www.news.com.au/business/story/0,23636,21563934-14302,00.html?from=public_rss

...and may I point out the interesting part.

"To date the boom has particularly lifted output growth in construction, the utilities and business services,'' said Access.

 

[frog12986]

Again, I never said that the mining secotr wasn't important, but to centralise the success of economy around this sector alone is ridiculous ..

 

[banco55]

frog12896- I think he's implying that that 5.6% of the GDP is actually contributing a lot to the economic growth at the moment. Mining happens to be the most important industry in much of WA and NT and economic growth rates are through the roof.

Bear in mind that jobs created by the mining boom does not reflect how fast it is growing. It's around 9th on the job-growth list but if the mining industry doubles the money its making, should it double the number of jobs in that sector?


At least Rudd is making an effort to reconcile and negotiate with the mining companies.

I rather think Gillard (who seems out of her depth) didn't think through caving in to the unions demands on AWA's.

 

[Sparcod]

Frog is right. Not that I usually agree with him. But seriously, if you believe Howard does not deserve credit for the economy there's plenty of much better arguments you can make. eg.

Economic Cycles.
Boom in Asia particularly China and India.
Reforms of previous governments eg. Hawke/Keating.
Short sighted economic management, eg. selling off governemnt assests to generate a short term surplus.

The mining boom is only part of the equation. Even so, you can't say that Howard deserves no credit for the strength of the economy. The relevant question is, would Rudd be able to deliver similar results. To all those "Wayne Swan would destroy the economy people," care to explain how......... What would Rudd and Swan do differently that would weaken the economy? This is the key question.

I agree with you. The external factors play a huge role in shaping our great economy of ours. At the moment, I'm no big supporter of Howard but I can list a few things that he did do to improve the state of the economy:
-Pay off public debts
-Reduced tariffs and increased trade agreements
-GST (yes, I say so)
WorkChoices is a bit 'iffy'

I do believe that the economic growth rate should worsen soon and that unemployment will go back up.

To all those people who won't trust Rudd's handling of the economy, can you please justify your argument?

 

[frog12986]

To all those people who won't trust Rudd's handling of the economy, can you please justify your argument?

My concern is that Labor still has too many vested interests that it relies upon for support. Whilst Rudd may be the leader and declares himself as 'fiscally conservative', the party is still beholden to these interests which have an extensive influence on the cabinet decision making process in a Labor Government. The operations of cabinet are vastly different..

Now whilst we have seen anything of the ilk of 'Medicare Gold', which are fiscally unpredictable, there are still a lot of key poicy areas to be addressed. As I said,we cannot make any specific judgements in this regard until the policy is out in the public domain.

Whilst I support infrastructure development, initiatives such as using of part of the Future Fund for broadband development, highlights that a Labor Government is more willing to intiate risk in the economy, which develops uncertainty. Uncertainty can of course negatively affect investment. I still do not believe that the government should enter the market, when there is a capable private sector to provide such initiatives (such as the G9 companies).

 

[ari89]

Just a news update:

Voters are still leaning toward Labor despite the federal government's big-spending budget, a new poll shows.

The Galaxy poll, the first to be conducted nationally since the budget, shows Labor leading on 57 per cent to the federal government's 43 per cent on a two-party preferred basis.


The poll also shows primary support for Labor at 49 per cent, compared to the coalition on 39 per cent about six months from the election.


According to the poll, undertaken for News Limited newspapers, two thirds of voters said the $31-billion budget handout in personal income tax cuts over the next four years would not persuade them to change their vote.


Voters also preferred Labor's industrial relations policy, with 52 per cent of the electorate endorsing Kevin Rudd's plan compared to 35 per cent support for the government's Work Choices.


"If the intention of the government was to use the budget as the opening salvo to reel in the huge lead (Labor leader) Kevin Rudd currently enjoys in the polls, then it has failed dismally," Galaxy managing director David Briggs told News Ltd.



http://news.ninemsn.com.au/article.aspx?id=266873

 

[ari89]

You haven't answered our initial question Frog. All your arguments are either fallatious or merely a personal rant about what is wrong with Labor that is irrelevant to economic management.



Too many vested intrests. Yeah what are they and how do they effect Labor's economic management credentials? Presumably you are talking about the unions. Basically you are saying:

The unions are bad (based on no evidence).
Labor is influenced by unions.
Therefore Labor is bad.



This argument is basically an ad hominem. Medicare gold has almost nothing to do with economic performance as a whole. You're saying that because Labor had one bad policy, therefore their IR policy must be bad. Whats more it is a particularly weak ad hominem because your comparing Latham led labour of 3 years ago to Rudd's labor today. With regard to the latter part, I guess we will have to wait.



Okay so thats your belief. It may be correct. But it does not prove or even substantiate that under a Labor government Australia's economy would weaken. Even if Labor were to enter certain markets (which ones they plan to perhaps you can enlighten me on) this does not show that it would weaken the economy.

Finally there are no authorities that support your claim. Can you cite any economics experts that believe the economy would be significantly worse off under Labor? Your arguments remind me of a clip from the Simpsons:

Judge: Mr Hutz, do you have any evidence at all?
Lionel Hutz: I have speculation and conjecture, those are kinds of evidence.

And thats all your argument is. Speculation and conjecture. Of course you might say this is evidence enough, because why should we risk the economy with Labor when its going well now? Again this would be fallatious. Simply because the economy is going well does not mean it is as a result of the economic management of the current government. If we are to accept speculative reasoning as a basis for judging politics we could just as easily speculate that the economy will crumble if Howard is given another term and that therefore we should vote for Rudd.

Now I simply await Frogs' predictable reply quoting a few minor flaws in this post and using it to dismiss the whole thing without analysing the mains points or answering any of the key questions I have posed..........

The classical general equilibrium model aims to describe the economy by aggregating the behavior of individuals and firms. Note that the classical general equilibrium model is unrelated to classical economics, and was instead developed within neoclassical economics beginning in the late 19th century.

In the model, the individual is assumed to be the basic unit of analysis and these individuals, both workers and employers, will make choices that reflect their unique tastes, objectives, and preferences. It is assumed that individuals' wants typically exceed their ability to satisfy them (hense scarcity of goods and time). It is further assumed that individuals will eventually experience diminishing marginal utility. Finally, wages and prices are assumed to be elastic (they move up and down freely). The classical model assumes that traditional supply and demand analysis is the best approach to understanding the labor market. The functions that follow are aggregate functions that can be thought of as the summation of all the individual participants in the market.

Neoclassical dependence is an indirect outgrowth of Marxist thinking which is a subgroup of development economics. People who believe in this theory are more radical than the people who belong to the other two sub-groups. According to this doctrine, third world underdevelopment is viewed as the result of highly unequal international capitalist system or rich country-poor country relationships. It is viewed that the rich countries through their intentionally exploitative or unintentionally neglectful policies hurt the developing countries. The rich countries and a small elite ruling class in the developing countries, who serve as the agent of the rich countries, are responsible for the perpetuation of underdevelopment in the developing countries. Unlike the Stage Theories or the Structural Change Models, which considered underdevelopment as a result of internal constraints such as insufficient savings, investment or lack of infrastructure, skill or education, the proponents of the Neocolonial Dependence model saw underdevelopment as an externally induced phenomenon. The remedy, according to those who preached these ideas, was to initiate revolutionary struggles to topple the existing elite of the developing countries and the restructuring of the world capitalist system to free the third world nations from the direct and indirect control of their first world and domestic oppressors.

The Dual Sector model, or the Lewis model, is a model in Developmental economics that explains the growth of a developing economy in terms of a labor transition between two sectors, a traditional agricultural sector and a modern industrial sector. Initially enumerated in an article entitled "Economic Development with Unlimited Supplies of Labor" written in 1954 by Sir Arthur Lewis, the model itself was named in Lewis's honor. First published in The Manchester School in May 1954, the article and the subsequent model were instrumental in laying the foundation for the field of Developmental economics. The article itself has been characterized by some as the most influential contribution to the establishment of the discipline.

In the model, the traditional agricultural sector is typically characterized by low wages, an abundance of labor, and low productivity through a labor intensive production process. In contrast, the modern manufacturing sector is defined by higher wage rates than the agricultural sector, higher marginal productivity, and a demand for more workers initially. Also, the manufacturing sector is assumed to use a production process that is capital intensive, so investment and capital formation in the manufacturing sector are possible over time as capitalists' profits are reinvested in the capital stock. Improvement in the marginal productivity of labor in the agricultural sector is assumed to be a low priority as the hypothetical developing nation's investment is going towards the physical capital stock in the manufacturing sector.

Since the agricultural sector has a limited amount of land to cultivate, the marginal product of an additional farmer is assumed to be zero as the law of diminishing marginal returns has run its course due to the fixed input, land. As a result, the agricultural sector has a quantity of farm workers that are not contributing to agricultural output since their marginal productivities are zero. This group of farmers that is not producing any output is termed surplus labor since this cohort could be moved to another sector with no effect on agricultural output. The term surplus labor here is not being used in a Marxist context and only refers to the unproductive workers in the agricultural sector. Therefore, due to the wage differential between the agricultural and manufacturing sectors, workers will tend to transition from the agricultural to the manufacturing sector over time to reap the reward of higher wages.

If a quantity of workers transitions from the agricultural to the manufacturing sector equal to the quantity of surplus labor in the agricultural sector, regardless of who actually transfers, general welfare and productivity will improve. Total agricultural product will remain unchanged while total industrial product increases due to the addition of labor, but the additional labor also drives down marginal productivity and wages in the manufacturing sector. Over time as this transition continues to take place and investment results in increases in the capital stock, the marginal productivity of workers in the manufacturing will be driven up by capital formation and driven down by additional workers entering the manufacturing sector. Eventually, the wage rates of the agricultural and manufacturing sectors will equalize as workers leave the agriculture for the manufacturing, increasing marginal productivity and wages in the agriculture while driving down productivity and wages in manufacturing.

The end result of this transition process is that the agricultural wage equals the manufacturing wage, the agricultural marginal product of labor equals the manufacturing marginal product of labor, and no further manufacturing sector enlargement takes place as workers no longer have a monetary incentive to transition.

Things are more complicated in reality as Surplus Labour is both generated by the introduction of new productivity enhancing technologies in the agricultural sector and the intensification of work. Also, the migration of workers from the countryside to the cities is an incentive towards those two phenomena as the relative bargaining power of workers and bosses varies and thus with it the cost of labour.

 

[ari89]

Ur so smart Ari.

I know

 

[ari89]

And sexy.

 

[marthastuart]

Cynics will always make the best politicians.

Labor bites.
Liberal Bites.
Every party bites.

No party will ever be able to satisfy the wants and needs of every individual and organisation within society, as a result no party will ever be 'the' party (no orwell reference intended). However, what we need to focus on is the history and current events. Labor's economic management may have a bad track record, yet they're under new leadership now, that alone discourages the comparative example to past labor management. Liberals for the past ten years have been providing continual economic growth, along with restrictions to the rights of individuals in not only the workplace but in the general public, the mistreatment and breach of human rights on refugees, the participation in a war which the majority of the public disagrees with based on falsified, not poor as reported, intelligence, the continual oppression of members in society based on Christian views.

In short, shut up.