The Dog’s Bollocks

Truth is like a dog’s bollocks – pretty obvious if you care to look.

Rich coastal ghettos – a triumph of the market over planning

The AgeA report by the Victorian Coastal Council last week found that Lorne was unable to cope with further development – it has become a victim of its popularity. as the town rapidly becomes a holiday house enclave for multi-millionaires, the local population which provides town services is dwindling to the point where service sector workers cannot afford to live in the town.

Lorne Community Association president Peter Spring said the town’s population had dropped by 11% between 2001 and 2006, with the number of full-time residents aged under 50 falling by more than 20%. While Lorne’s median house price surged by 25% to $850,000 over the past year, almost 75% of its 1600 houses are only occupied part-time.

“Every single business in town is looking for staff because it’s become impossible for young working families to afford a house around here.

“There’s a view around town that something will only be done when holiday home owners can’t get a latte on the weekend.” Owner of the local bakery Loukas Leontiades has been forced to close for the past three months because he has been unable to attract staff.

“Why would people come here over winter, when there’s so much other work around?” Mr Leontiades said.

While Lorne has always been a popular destination for well-to-do holiday makers (including Mark Twain) until a generation ago it remained a small fishing community where working class people came in droves for an affordable summer holiday. A campsite in town now costs more than $300 per week prime time and even a modest house or studio apartment will set you back $2-3000 a week at the bottom end of the market.

Service workers – in hospitality, education, health, police – have tended to come from local families who have been here for generations or bought in more than 20 years ago and students whose families have holiday houses. At the corporate end of hospitality, cleaners are now brought in by out of town contractors. The local supermarket buses in immigrants on temporary worker visas from communities an hour further up the coast.

Every summer, the sleepy seaside town is transformed into a thriving playground, where a coffee can take 30 minutes, punters form a scrum at the aptly named Bottom Bar of the Lorne Hotel and finding a car park is virtually impossible.

During the Christmas New Year period the streets are packed with what one well-known local calls Grammar Girls (and Boys) and their parents moving endlessly between beach, cafe, bar and South Yarra styled clothing boutiques, all with an overinflated sense of self-importance and an exaggerated air of entitlement – with BMW drivers arguing the toss over the price of a coffee or a minimum serve of chips. The streets are clogged with every conceivable imported luxury car whose drivers have abandoned any sense of road rules, consideration for others, or common courtesy. Summer in Lorne is a perfect manifestation of greed-and-selfishness-is-good free-market narcissism. If you really want to make a statement with your car, forget budget Beamers and Mercs – they’re as common as muck. Better try a Bentley, Ferrari or Lamborghini. Or just get dropped off by a chopper.

Yet, for almost 10 months of the year, small businesses along the promenade are unable to find staff, there is no long-term rental accommodation and organisations such as the Country Fire Authority struggle to find volunteers. There was summit recently in Lorne to discuss the issue of affordable housing for workers. A few years ago some land was subdivided and released under an affordable housing scheme, with most of it developed and sold off at premium prices a few years later.

So what is the free-market solution to all this? Or do towns like Lorne need interventionist policies. Left to market forces the cost of services will escalate and businesses dwindle. Factor in peak-oil and the value of real estate will inevitably fall – unfortunately long after the death of the local community who make the town so desirable and livable.

Victorian Coastal Council president and Surf Coast councillor Libby Mears recognises there is a problem. “The Lorne community is expressing a level of distress … and inequity between permanent and non-permanent residents is causing some real tension,” she said.

Cr Mears said higher rates on holiday homes was one option that would be considered by council, but conceded it would be unpopular with owners.

She said unoccupied holiday homes needed to be used more effectively and the council would need to think laterally to resolve the affordability crisis. “Maybe local government has a role in how we rate properties, or alternatively, how do we provide incentives to encourage longer-term rentals?” Cr Mears said.

The National Sea Change Taskforce, made up of 70 coastal councils around Australia, has proposed a 50% “sustainability surcharge” on absentee owners based on their rate bill.

The plan reflects a groundswell of concern in coastal councils and communities about the pressures of tourism and national residential development.

Given the history of the Surf Coast Shire, I suspect that the vacant holiday house rate surcharge would end up being spent on improving the street scape amenity of Torquay, its home town, rather than facilitating an affordable housing solution in Lorne.

If you have any bright ideas, please let me know.

Filed under: Economics, Town Planning

The Narrowing becomes The Turning

SpoonerWith the election only a week away it would seem that Kevin07 is galloping confidently down the home straight as Team Howard struggles up the rear. Rudd’s campaign launch had the confidence of one who is to become the next Prime Minister. Rudd’s more modest and carefully targeted education funding promises were also strategically clever for wedging Howard as being fiscally reckless with his non-means tested tax cuts for private schooling.

Howard’s response to Rudd’s campaign launch was symptomatic of Team Howard’s failure to get their narrative across – probably because it is incoherent and lacking credibility. Although we have spent more than Labor our promises are fiscally responsible and non-inflationary while Labor’s spending will simply cause inflation and interest rates to go up. Labor has no policies for growth whereas our policy for growth is Work Choices to keep wages low so you can afford to pay your mortgage.

Polling taken after Team Howard’s campaign launch shows another 1-2 point narrowing in their favour. If this trend continues, the Coalition will have an election winning lead sometime toward the end of next year.

Yesterday’s scathing report by the Auditor General on Team Howard’s blatant misuse of the regional partnerships funding program before the 2004 election to favour marginal Coalition seats and discriminate against Labor held seats could not have come at a worse time for Team Howard’s reputation as responsible economic managers. Combined with a successful campaign launch by Kevin07 it is likely that crucial polling this weekend will show a terminal shift away from the government.

Barnaby Joyce and Andrew Bolt admitting this week that Team Howard is done for will make for an interesting final week of the campaign. The pressure will be on Team Howard to resist pre-election recriminations and blunders while the Mainstream Commentariat begin rewriting the narrative of Team Howard’s fall from grace and how they saw it coming a long time ago.

Some months back at GrodsCorp I predicted a Labor win by a margin of 25-30 seats. Using Antony Green’s calculator I’m now going for around 96 seats to Labor – a margin of 44 seats. A margin of around 53 seats is my instinct, but I guess we must be cautious.

Apparently Labor has been running an effective TV ad this week with a working family saying sorry Johnny, it’s not personal – just time for a fresh team. However, as some of my coarser  musical colleagues would put it, “It’s nothing personal Johnny – it’s just that you’re a pack of feckin conts.”

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Filed under: Federal Election 2007, Politics

Howard’s vision of The Future (now with welfare for the wealthy)

SpoonerAt his Campaign launch, Howard remarked to the effect that an $800 tax rebate for school fees to millionaires was a break through in public policy – the transformation from a Welfare Economy to an Opportunity Economy is complete. WTF? Middle class welfare is now available to the ultra rich!

Howard’s education policy announced yesterday provides $6 billion in the name of education, yet not one cent of it will go directly to schools, let alone public schools. All it is doing is adding another inflationary cash injection into the consumer economy as reimbursements for money already spent. But based on past form, it would be naive to have expected anything else from Howard, who has doggedly pursued privatisation of education through a combination of funding policies which facilitate the flow from of cash from the public sector to the private sector and a sustained culture war on the teaching profession, portraying them as Maoist ideologues who brainwash our children with an elitist, left-wing, politically correct post-modern view of the world and our history.

Head Girl, Julie Bishop, trumpets the policy as one of giving choice to parents, for they are the best people to decide how best to spend the education dollar. The full manifestation of Howard’s vision would create a three-tiered education system. At the top will be the sandstone colleges – always the exclusive preserve of the wealthy and well-connected. In the middle will be McPrivate Schools, probably built and run in Public Private partnerships with the likes of ABC Learning Corporation, catering for the aspirational middle class who can’t afford the real thing. And the rest? Well we’ll train them to be grease in the wheels of commerce. A proper education can only be obtained in the private school system, and only by those who can afford it. The rest of the population can have a safety net education and access to ‘proper’ technical schools.

Add into that mix yet another underclass – migrant guest workers. Then we can do what France and Britain have done – exploit migrant guest workers for more than a generation and yet not grant them rights of citizenship, creating the conditions for unrest and alienation from the second generation Australian born. I guess it will be good for sustaining The War on Terror. Oops, don’t mention The War!

Chuck in 25 foreign-owned nuclear rectors around the coastline adjacent to Australian cities as a climate change solution, put the Adelaide-Darwin railway to the use intended by its owner, Halliburton – the people who gave us the Iraq War – and ship in US nuclear waste and ship out yellowcake to all comers.

Yep, sounds like a vision for the future all right.

Filed under: Ass Hattery, Australian values, Education, Federal Election 2007, Ideology, Politics

Me too – and I’ll raise you

TandbergTeam Howard’s Campaign ‘Launch’ is anything but economically conservative as the cost of its election promises approaches $50 billion. Any traction gained by attacking Kevin07’s me-too-ism has been lost as Team Howard attempts to out-bid on education and first home affordability. Anyone care to explain how injecting 0.5% of our Trillion Dollar Economy back into consumer’s pockets is not inflationary and fiscally irresponsible?

Team Howard’s campaign strategy underscores the fundamental problem, Rather than investing $6 billion directly into education it is to be spent indirectly through taxation reimbursements of private money already spent, regardless of income, need, or capacity to pay. Private school fees are now tax deductible, further skewing the flow of government investment in education from the private sector at the expense of what Team Howard consider to be a safety-net public school system.

Howard says we don’t need no education revolution – we need an education system that teaches kids how to read, write, spell and add up. Head Girl Julie Bishop says it about giving parents ‘choices’ for their children’s education. Pay tax-deductible fees for a private school and presumably your child can also learn take-aways, times tables and goesintas.

Team Howard’s Not an Education Revolution is an indirect, inefficient and ineffective way of improving educational outcomes and reducing skills shortages. It is dressed up as offering families educational ‘choice’ that has more to do with free-market ideology than good economic management and capacity building. Unfortunately for the economy the net result will be to shift cash from investment in education back into consumer spending, adding more inflationary pressure and doing nothing whatsoever to enhance educational capacity.

Aside from sabotaging Team Howard’s claim to being fiscally responsible economic managers, the Campaign Launch reminds the electorate that they have ignored social investment for eleven and a half years and are flooding the economy with inflationary pre-election cash bribes. Ad-hoc policy on the run and at its worst – ineffectual and always with undesirable and unintended consequences. Team Howard’s policy credibility has been further eroded and I suggest that the voters have finally woken up to their deceptive smoke and mirrors policy making and come polling day won’t buy it.

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Filed under: Economics, Education, Federal Election 2007, Ideology, Politics

Eight myths about tax and public debt

For those who missed it, this is from Fred Argy’s recent paper Australia’s Fiscal Straight Jacket published by the Centre for Policy Development, a new public interest think tank dedicated to promoting alternative voices in Australia’s public debate. The Friedmanites will not be best pleased with Fred, who was a high level Federal policy adviser from the 1970s to early 1990s. Since retiring, he has written extensively on the interaction between social and economic issues. He is currently a Visiting Fellow at the Australian National University, Canberra, and is a fellow of the Centre for Policy Development.

The Howard Government and Rudd’s Labor opposition have both embraced the notion that in general tax rates and public debt levels should not increase. This fiscal strategy is lazy and timid policy, not good governance It is impeding the Government’s capacity to meet the nation’s infrastructure needs, forcing it to adopt financing options that are economically less efficient and denying Australians a genuine, well informed choice on the appropriate balance between public and private goods. The fiscal straightjacket is based on several myths about the impact of taxation and government borrowing.



1. Higher taxes are bad for economic growth The economic impact of taxes depends on the initial tax level, how the revenue is raised, and how productively the money is spent. There is no correlation between the size of government and economic performance.
2. A public debt freeze is the key to sound public finance Net public debt is not a true measure of the strength of a government’s balance sheet – instead the focus should be on net public worth – assets minus liabilities.
3. The private sector is always a more efficient owner-manager of infrastructure than government The benefits of private design, construction, and operation of infrastructure can be captured without private ownership. The private sector often demands excessive premiums to take on political risk – and when privatised services fail, governments must still step in. Insufficient competition can also mean that the costs of monopoly regulation outweigh the benefits of private participation.
4. Shifting from government borrowing to private equity helps ease pressure on inflation and interest rates When productive resources of the economy are fully stretched, any new large scale debt-financed investment runs the risk of generating inflation but this risk is not reduced by transferring financing responsibilities to the private sector. In either case, inflationary pressures can be avoided by judicious timing of the investment or by discouraging or deferring other types of national spending. Government debt does not affect the international cost of credit.
5. If a particular infrastructure project cannot be sensibly financed by the private sector, revenue can fill the gap It is unfair to ask today’s taxpayers to cover the entire cost of investmentsthat will yield returns far into the future. Current revenue should primarily be used to pay for current expenses.
6. There is no evidence that the fiscal straightjacket has impeded infrastructure investment Public investment is lower today as a proportion of GDP than it was 15 years ago, and has been dropping faster in Australia than in comparable countries. The greatest decline (in both economic and social infrastructure) has been in forms of investment which do not lend themselves to private equity funding.
7. Running structural fiscal surpluses is good for national productivity By holding back investment in high-return areas such as education, health, early childhood, training, transport, etc, our obsession with surpluses may actually be holding back Australia’s productivity growth.
8. The community prefers lower taxes and does not like the idea of governments borrowing Opinion polls show a clear preference for increased spending on health and education over tax cuts. The community is only uneasy about government borrowing because they have been told it is financially irresponsible by both major parties – effective leadership could put an end to this misconception.

Filed under: Economics, Federal Election 2007, Politics

Day 25 – “sorry” sorry not Sorry sorry

Your Democracy

The Interest Rate Fortnight draws to an unhappy end for Team Howard. All the effort in shaping the narrative in the run up to the announcement, coming out with guns blazing to assert dominance on the economy is suddenly stymied when Howard explains to a shock jock that saying “sorry” is not the same as making an apology in the same way that making an apology is not the same as saying Sorry, or something. By trying to blame it all on Labor playing semantics Howard revealed to all who witnessed it that it is not with irony that he is known as The Rodent.

Unfortunately the economic narrative is no more convincing. We can’t control inflation, but we do take credit for our booming economy, and we can control inflation better than Labor. Work Choices has resulted in workers earning more while it has also lowered wages. You need to earn less under Howard so that you will be able to pay your mortgage. Meanwhile the RBA and Labor are speaking somewhat more coherently about capacity constraints in the economy resulting from systemic neglect of education, health, transport. Bit of a no brainer really.

Guess we’ll have to go back to talking about the future of education, climate change policy, health and transport. Don’t mention the War.

The polls seem to be turning against Team Howard, once again. Not sure what else they can do to maintain the narrowing and control the electoral damage. Man the lifeboats and try to save your seat.

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Filed under: Ass Hattery, Federal Election 2007, Politics

Moving to Montana

Been watching The Classic Album episode on Frank Zappa’s Apostrophe/Overnite Sensation project which included the following (I think) performance of Frank’s cowboy favourite of mine – Montana. the genius of Zappa at his finest and most accessible.

Filed under: Music, YouTube

Day 23 – Wages under a Coalition government will always be lower than under Labor

Matt GoldingTeam Howard has spent the last few days framing the debate for the now confirmed sixth interest rate rise since the last election. In a moment of candour, Member for Blair Cameron Thompson revealed the strategy in simple terms “What it does is underline the strong economic performance of this government and to that extent if you want to draw a political line under it, it’s a positive for the Government.”

Every sound bite has been used to emphasise the fear factor in the coming ‘difficult economic times’. An experienced Team Howard will be a better bet to keep inflation under control and interest rate rises will always be fewer and lower under a Coalition government. Electing an inexperienced Rudd Labor government with 70% trade unionists will cause rampant inflation and the destruction of economic life as we know it. “We will determine the inflation and interest rates and the circumstance under which they happen!”

Despite warnings from the Reserve Bank and impartial economists over the last three years that its hoard and spend budget/election strategy was inflationary, exacerbated by failure to invest in capacity expansion, Howard and his apologists wants the punters to believe it’s all down to the drought and oil prices. It’s a risky message – how will Team Howard control inflation and interest rates? By keeping government expenditure in check (yeah right – that one’s blown right out of the water) and by keeping the cost of wages under control. Which brings us back to Work Choices with the promise of lower wages for workers for the good of the economy. If the economic future is really as tough as the fear campaign would suggest will there be a need for more drastic ‘Work Choices’ post-election?

In the lead up to today’s interest rate rise the Beemer & Beachhouse Brigade have been busy telling Australians that they have never had it so good – and we have the statistics to prove it! – despite the ratio of private debt to GNP being higher than at any other time in history. Yeah OK, you might have a few problems paying bills and buying the things you want, but things have never been better! Communications Minister Helen-they-have-internet-on-Broadband-now-Coonan has produced an OECD report to her liking, showing that Australian Broadband ranks 6th in the world! This stunning improvement is based on Advertised Speed (not actual) but still places us behind New Zealand.

So if you turn up on polling day, anxious that you are having trouble surviving from one pay to the next as bills mount and the credit card spirals out of control, or if you are frustrated at the lack of, speed of, cost of your 6th best in the world broadband speed, just remember – it is only your perception. It is not real! It’s only a statistical aberration. You never had it so good! Better vote for Team Howard.

Cross posted at Blogotariat

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Filed under: Federal Election 2007, Politics

Day 21 – Contestants jostle for barrier positions as The Big Day dawns

TandbergTeam Howard’s favorite NewsPoll appears to show an improvement in their ‘fortunes’ but even Dennis Shanahan is reluctant to call it a narrowing, as the latest poll is still consistent with those of the last 8 months. What they show if tomorrow’s anticipated interest rate rise goes ahead remains to be seen. Meanwhile Team Howard are still working hard to convince voters that while they can’t control interest rates, they can control them better than Kevin07, judiciously avoiding any mention of skills shortages and capacity constraints as contributing causes of inflation.

On the pork-barreling front, Team Howard further demonstrated their environmental credentials by recycling previously announced pledges on Road Funding to the tune of $13 billion to make up for the previous 11 years of neglect.

Kevin07 has announced a $500 million initiative to reduce homelessness over 5 years. Team Howard’s Mal Brough reckons it won’t work, so why bother trying? Presumably Brough wasn’t watching last night’s Four Corners with its harrowing tales of community destruction resulting from the dog’s breakfast that is the NT Intervention.

Commentators and Team Howard are still trying to get mileage out of Garrett’s Gaffe, but it has been upstaged somewhat by revelations that Minister for Mills, Malcolm Turnbull is not actually all that keen on a Tamar Valley Pulp Mill, and the incredulous promise by soon-to-be-ex-Work-Choices Minister Joe Hockey that he would resign if there were any further changes to Work Choices. Would changing its name let him off the hook? Since when do Team Howard Ministers resign for any reason, unless it is politically expedient?

ABC analysis with Antony Green last night suggests that the Greens are getting traction with their pitch for an umpiring role in the Senate and seem set to exercise a significant balance of power role whoever wins government, promising restoration of the role of Senate Committees to ensure well-crafted legislation and curbing of government excess and hubris.

For the polling improvement, a point to Team Howard. They’ll probably need it after tomorrow.

Cross posted at Blogotariat.

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Filed under: Federal Election 2007, Politics

Milord Earl Slim the Defenestrated of Leg over Wallop

My Peculiar Aristocratic Title is:
Milord Earl Slim the Defenestrated of Leg over Wallop
Get your Peculiar Aristocratic Title

Filed under: Internet, Media

The Dog’s Bollocks

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