New Australian Prime Minister.

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benno

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Hi guys,
So down here we had a bit of a leadership tussle within the current ruling party and our PM was unceremoniously dumped in favour of his deputy, Julia Gillard. There is a certain amount of outrage here from people who claim that this isn't the PM that was elected - not entirely how our electoral process works but still.

I'm actually just wondering what you guys overseas are seeing of all this and what your opinions are? Do such things happen elsewhere in the world?
 
benno said:
Hi guys,
So down here we had a bit of a leadership tussle within the current ruling party and our PM was unceremoniously dumped in favour of his deputy, Julia Gillard. There is a certain amount of outrage here from people who claim that this isn't the PM that was elected - not entirely how our electoral process works but still.

I'm actually just wondering what you guys overseas are seeing of all this and what your opinions are? Do such things happen elsewhere in the world?
Click to expand...

Post a photo of her. Then we can tell better what we think. :))
 
Olsen said:
Benno,

We think it is a scandal. Kevin Rudd was a fine guy, - and the prime minister that the people of Australia wanted. But the powerful Australian mining companies wanted it otherwise. So much for democracy.

Read this: http://www.wsws.org/articles/2010/jul2010/pers-j07.shtml
Click to expand...

Well, Olsen,
Firstly the socialist polemic you linked to is one point of view, but it's not necessarily all truthful - it may seem so from a particular political position, but it's not exactly how most people in Australia see it. So it's not exactly helpful in informing people unfamiliar with local politics and political parties.

The first thing to recognise is that nobody has ever claimed democracy is an efficient form of government. It's messy and complicated, and compromised on many fronts. But overall it delivers a reasonably good outcome for the majority of people. That doesn't mean sections of the population don't get marginalised, but overall and generally on average it's the best we can make of things. A benign dictatorship might be better but these things have a habit of becoming less benign fairly quickly!

I was (still am, I guess) a Rudd supporter but due recognition has to be given to a number of factors. He's intelligent, committed, has vision and energy. He's also a micromanager, makes unilateral decisions without consultation, and has an enormous ego. I believe he wanted to leave a significant legacy of big policy making and to move Australia to a position of greater influence in world affairs. He travelled extensively, participated in major economic forums and generally had Australia punching above it's weight. The issues he was promoting like climate change, whaling, resource taxes etc were all significant, deserving of attention but he moved too far and too quickly ahead of both his own party colleagues and the Australian public. And he became arrogant when his ideas were challenged. It was not just one issue (the mining tax) that undid him but a number of things that cumulatively destroyed his credibility, and he did most of it to himself because he was not inclusive in his management style.

You mention the mining companies. I happen to know a bit about this as I work as a safety consultant in the mining industry. Certainly the major companies like BHP Billiton, Rio Tinto, Xstrata etc have no loyalty to any country but only to profits. So if mining is markedly more profitable in Australia that's where they operate and if that changed in favour of, say, Brazil, that's where they would invest. The money involved is huge and the investment time frames are long. I am currently consulting to a mine in Western Australia which is in the development stage. The pit is operating at a low level of activity waiting for the gas-fired power station to be finished, the desalination plant to be finished, the processing plant to be finished and the port and ship loading facility to be finished. Two years have passed, another year is likely before they get into serious production, they've outlaid so far $3.5 billion and expect to spend $5.5 billion. Yes, they are able to anticipate making superior profits to make such an investment worthwhile.

The issue for Australia is that along with the jobs, infrastructure etc etc comes the realisation that in 25-50 years most of these big mines will be empty holes in the ground and the industry will have moved elsewhere. So we'd like to slow that down a bit and extract a bit of the wealth from our resource to provide for some social investment that otherwise probably will never be made. Like education and health for our indigenous people on whose traditional lands most of this mineral wealth lies.

Rudd overplayed his hand. In private, the mining companies admit there's some merit in the principle that a portion of excess profit should be returned to the people. They make so much they can afford to concede that. There were three main issues around all this. Firstly, there was no consultation - Rudd just announced it. Second the quantum of 40% was excessive. Some mining executives thought a negotiated outcome around the 20% mark might have received some grudging support. Third, the tax was to be made retrospective on all existing developments - not just new ones.
Finally, after a considerable uproar, Rudd agreed to meet the most senior mining company CEO's for "consultation". They went to Canberra armed with their studies, economic modelling and other data. Rudd listened to them until they finished, then, instead of discussion, announced that "nothing will change" and walked out of the room. They were furious. 24 hours later the mining industry had pledged $100 million to a fighting fund to bring the government down. It was all so unnecessary - Rudd shot himself, and possibly the whole government in the foot by his arrogance. It was then that his colleagues and the party machine decided he had to go. After all, the pursuit of political parties is to gain and retain power.
 
Leigh,

I agree with you completely regarding democracy.

Who says that 'Rudd overplayed his hand'. The people of Australia? Or the mining industry CEOs?

I am a social democrat myself. - I am not afraid to call myself a socialist. As Rudd. A difficult balance is when and how 'the social democrats are to cooperate with the capital'. And not fight them. It is in such a situation that Rudd found himself on the wrong side of the argument.

I can assure you; we have seen similar situations here in Norway, possibly the most social democrat country in Europe. Even here social democrat prime ministers have been mobbed out of position. Just like Rudd. Why? Because they wanted 'our troops out of Afghanistan', 'stop to privatisation' and so on.

Both Norway and Australia are under enormous pressure from the huge multi national companies, - and the US government which I suspect, supports them. Those standing up to that pressure are brave. Rudd was such a brave man. Obviously.

Norway is in a similar situation as Australia. We have huge natural resources that we exploit. Like crude oil. One day these resources are empty - and 'just holes in the ground', as you say. But we tax the oil industry heavily. By this, we build up a sovereign wealth fund. It would be only natural if Australia did the same. Rudd fell in e fight about 'how much' the industry should contribute. They came out winning. Despite democracy, the mining industry got it their way. - I could sit a whole night listing up similar instances that 'industries' get it their way. Despite democracy. All from the agri/alcohol industry of EU to the weapons industry of USA, - to the camera industry of Japan....
 
benno said:
There is a certain amount of outrage here from people who claim that this isn't the PM that was elected - not entirely how our electoral process works but still
Click to expand...

But this is "exactly" how our political process works... The bigger concerns are the mess Gillard made in her previous role as Minister for Education...
 
Olsen said:
Leigh,

Who says that 'Rudd overplayed his hand'. The people of Australia? Or the mining industry CEOs?
.
Click to expand...

Well, I say it actually. And you place too much emphasis on the role of the mining companies in this. I think you're only seeing part of the picture. Whilst the mining tax might have been the proverbial last straw there was a succession of failed or mishandled government initiatives on the domestic front that seriously undermined Rudd's credibility and the goodwill with which he won the election that brought him to power. He was so convinced he was right (and I agree he probably was) that he stopped listening to the wind, and the storm overtook him. It was the same lack of hearing what the electorate was murmuring that brought down the previous Prime Minister, John Howard, and put Rudd in power.
Rudd got too far in front of his support base and got isolated when they got nervous about following him. That applies as much to the voters as to his party colleagues.
 
Leigh Youdale said:
Well, I say it actually. And you place too much emphasis on the role of the mining companies in this. I think you're only seeing part of the picture. Whilst the mining tax might have been the proverbial last straw there was a succession of failed or mishandled government initiatives on the domestic front that seriously undermined Rudd's credibility and the goodwill with which he won the election that brought him to power. He was so convinced he was right (and I agree he probably was) that he stopped listening to the wind, and the storm overtook him. It was the same lack of hearing what the electorate was murmuring that brought down the previous Prime Minister, John Howard, and put Rudd in power.
Rudd got too far in front of his support base and got isolated when they got nervous about following him. That applies as much to the voters as to his party colleagues.
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You are absolutely right. But I still think it is the right of the Australian people to decide what level of taxes that the mining companies shall pay. Not the mining companies.

By the way, I think that the labour (social democrat) government of Kevin Rudd has run the only sensible financial policy of the world. This by having a relatively high interest rate and strong currency. - If only our own government would follow suit....
 
Olsen said:
By the way, I think that the labour (social democrat) government of Kevin Rudd has run the only sensible financial policy of the world. This by having a relatively high interest rate and strong currency. - If only our own government would follow suit....
Click to expand...

We've been very fortunate, and part of that good fortune has been the strong export of minerals. Ironic?
The other factor (which the Labor government doesn't want to admit to) is that there was a huge surplus built up by the previous Liberal (conservative) Treasurer which was raided by the incoming Labor people to provide for the Economic Stimulus Package. Not saying there's anything wrong with that - it was the correct strategy and the Global Meltdown passed us by with hardly a ripple, but they were lucky that the money was there to use. They spent more, of course and so debt overall increased but not by nearly as much as the other party is trying to make out in the run-up to the election on August 21st. It will be interesting to see if Labor can survive the odour they've attracted with the botched policy initiatives they've tried since coming to power.
 
Leigh,

Can that really be so? Do you have links describing the financial postion of Australia?

Here in Europe it is the conservatives that have indebted their nations. Most often given the money away as 'lower taxes', without reducing the budget accordingly. The more conservative governance, the higher is the debt. Typical is UK which as a huge debt after too many years of Thatcher. Or Greece, Portugal and Spain, both having huge public debt to carry from the facsist general's times.

But one thing is debt. Another is the total government balance. In Sweden the sitting conservative government increased the public debt with 'only' 200 billion SEK in four years. Bad enough. But they have sold state property for an additional 200 billion SEK (to friends of the conservative party, - some of the richest people in the world). This government has also changed the pension system for the larger part of the Swedish population and 'privatized' it. Which meens that a whole generation of Swedes will not get a pension at all.
 
Ha, ha! No!

What I am thinking of is 'the bank account of the State of Australia'. What is Australia's financial position and how has it developed through the years with different governments?
 
Olsen said:
Ha, ha! No!

What I am thinking of is 'the bank account of the State of Australia'. What is Australia's financial position and how has it developed through the years with different governments?
Click to expand...

I think you might have to do a little digging here. I don't have the time. We have a Reserve Bank which is our central bank, rather like the FED in USA.
We have four major trading banks. All of them put out regular reports and you can find their web sites without too much of a problem.
Our equivalent of the "Financial Times" is called the Financial Review - comes out daily and has a lot of micro and macro analysis.

But essentially we're in very good shape compared to the rest of the world including the USA, NZ, Europe and Japan. And with a little luck we'll avoid the vortex even if some of those countries go even further down the drain.
Retail spending is a little lower than usual, housing start have fallen a bit in the last two months, major investment is slowed pending the outcome of the election on August 21st (which is starting to look more and more like a Conservative victory), unemployment isn't a major worry and our interest rates are high as we're more worried about inflation than deflation - unlike most other countries.
Overall, I'd say people are being suitably cautious, given the bad news emanating from overseas but it would be fair to say as a nation we're cautiously optimistic.
 
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