Monday, March 12, 2007

Breathtaking hypocrisy

John Howard lives in another world doesn't he.

Today's Sydney Morning Herald story about the latest opinion polls have Our Great & Fearless Leader at his hypocritical best:

"I can't ignore the fact that we've had quite a series of bad polls over the past few months and I ask myself why is it that the polls are so bad for the government at present?" Mr Howard said.

"I think one of the reasons is that the Labor Party has successfully created the impression that it doesn't matter who is in government, the economy will continue to grow."

The government would continue to attack Labor over the economy, industrial relations and personal accountability, he said.

"We'll be focusing on those things but we'll continue to hold the Labor Party and individuals in the Labor Party to account."


Attacking the opposition on IR and personal accountability - and this from John Howard, with his record!

I'm simply speechless.

As for "...the Labor Party has successfully created the impression that it doesn't matter who is in government, the economy will continue to grow.", well, it's more than an impression, it's largely true. It would take an almost unbelievably incompetent government and bureaucracy to foul up during a world-wide boom period.

When the world economy is bad, that's what causes Australia's woes..."It's all beyond our control." When the world economy is good it has no effect on Australia, our good times are all down to the PM!

JWH insists that he is totally responsible for the good times we've been going through. The facts show a totally different picture. His 'success' has been that was in the right place at the right time. Pure luck, nothing more.

It's universallly acknowledged that the boom started two years before Howard came to power. In other words, he jumped on the bandwagon started by Hawke & Keating.

His tenure coincided with a world boom, world-wide record low interest rates, with previously unseen amounts of money sloshing around looking for a home, with the incredible rise of China and India, and the development boom in the Arabian Gulf, that have sent prices rocketing.

In fact Australian interest rates have been consistently higher than other OECD countries. We have not attracted investment from the trillions looking for somewhere to go, they are going elsewhere. We are missing out on the demand for what we can dig out of the ground. Add to that the fact that we have a bad balance of payments account and the PM's claims are shown to be very hollow.

A Reuters report today highlights how we're missing out on the China boom. The last two paragraphs are particularly telling:

Australia faces commodity setback

Sydney: It's long been accepted wisdom in Australia that a new golden age for commodity exports is just around the corner given the rise of China right on its doorstep.

Yet, new research by economists at UBS suggests the optimism may be misplaced.

"It was such an attractive, intuitive idea that the rise of China would inevitably lead to a surge in demand for our commodities," said Adam Carr, a senior econ-omist at UBS. "All we had to do was invest more to work out the supply kinks and Australia would enjoy an export bonanza."

"Well, it's been five years now and there's still no sign of the promised land," he argued. "And when you delve into the data the evidence suggests the consensus has been wrong all along."
If he's right, it will be a sore disappointment for policymakers who are counting on growth in export volumes to take over from domestic demand in driving the economy.

Just last week, Malcolm Edey, head of the Reserve Bank of Australia's (RBA) economics department, painted a rosy outlook for global commodity demand, led by the economic boom in China which, he estimated, could last for several decades yet.

"What we can say with confidence is that the world is experiencing a very large increase in resources demand which is likely to go on for some time," said Edey.

The high level of global commodity prices has certainly been a boon to Australia's terms of trade - what it gets for its exports compared to what it pays for imports. Those terms have climbed more than 30 per cent in the past three years to hit highs not seen in half a century, delivering a windfall to incomes, company profits and tax revenues.

Yet, while prices have risen, the actual volume of exports has lagged far behind, so trade has been a drag on economic growth for almost all the past five years as imports have risen much faster.

Most worrying of all, I'm not sure that it's just politics, I think Mr Howard actually believes what he's saying.

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