The latest inflation figures have hit the front pages and the news is not good. At 4.2% for the year to March, inflation is still well outside the desired range as decreed by the Reserve Bank Of Australia. So does that mean we should expect more increases in interest rates? Perhaps. But at the very least it means we can’t expect interest rates to fall anytime soon. The problem is that successive interest rate rises so far don’t seem to have stopped inflation. Maybe there’s a lesson in that.
If we look at where the CPI is rising most quickly it’s easy to see that petrol is at the top of the list. The price of petrol has increased 18.9% in the past year. Far from indicating an economy that is overheating, the rising price of petrol is more likely to actually be putting the brakes on the economy overall as both people and businesses struggle to cope with increased costs. Worse than that, because the price of fuel is largely determined by international factors, interest rate increases are unlikely to cause the price of petrol to fall. The result is that overall inflation will be seen to continue to rise, even in the face of higher interest rates.
There are also signs of an economic slowdown, with reports that retail sales figures have dramatically slumped. Add to this the uncertainty of the global credit crunch, and it’s not a big leap of the imagination to start worrying about a possible recession.
All of this leaves Treasurer Wayne Swan confronting a significant challenge in constructing his first budget. The notion that the government needs to preserve a budget surplus is only part of the picture. While inflation is making it increasingly difficult for Australians to make ends meet, it will be seen as arrogant and out of touch to sit on $20-Plus Billion while pensioners go without groceries. It is impossible for budgetary measures to prevent the effects of a global downturn, but it is possible to help cushion people from them.
The battlers of Australia are depending on Wayne Swan not to let them down.
Thursday, April 24, 2008
Wednesday, April 23, 2008
Keeping The Olympic Dream Alive
Well the Olympic flame has arrived in Canberra for the Australian leg of the torch relay for the 2008 Beijing Olympic Games. Whether or not that also means that trouble and rowdy protests will overshadow the event remains to be seen, but it has certainly been the case elsewhere in this relay. Around the world, protestors have disrupted the relay, and regardless of the validity of their concerns, have in some cases taken their protests too far.
The so called Olympic Spirit is one of peace, harmony and goodwill. It’s a bit like the Christmas spirit… it only exists if we all believe in it and work to make it happen. Instead, at every stage around the world the torch relay has been dogged by excessive protests, draconian security, and a disconnection with ordinary people. In some ways, it might have been better not to have the relay at all. But of course that would be an admission by all concerned that the Olympic Dream did not extend to the people and government of China, who have after all accepted the honour of hosting the games.
What should be a proud moment for China has become an embarrassment, but ironically the more the Chinese authorities seek to defend the flame using attendants described as “thugs”, the more obvious it becomes that they have missed the point. Rather than defending the “Dream”, they themselves serve to devalue it. It is also clear that they simply don’t understand the concern that people around the world have for Tibet.
Despite the tremendous progress made by China it still remains a totalitarian communist regime. So for those who want to believe in the Olympic Spirit the question is this: are the ideals of peace, harmony and goodwill best served by supporting the torch relay as it passes briefly through our nation, or by protesting against it?
Right or wrong, the International Olympic Committee made its choice a long time ago when it awarded the games to China.
The so called Olympic Spirit is one of peace, harmony and goodwill. It’s a bit like the Christmas spirit… it only exists if we all believe in it and work to make it happen. Instead, at every stage around the world the torch relay has been dogged by excessive protests, draconian security, and a disconnection with ordinary people. In some ways, it might have been better not to have the relay at all. But of course that would be an admission by all concerned that the Olympic Dream did not extend to the people and government of China, who have after all accepted the honour of hosting the games.
What should be a proud moment for China has become an embarrassment, but ironically the more the Chinese authorities seek to defend the flame using attendants described as “thugs”, the more obvious it becomes that they have missed the point. Rather than defending the “Dream”, they themselves serve to devalue it. It is also clear that they simply don’t understand the concern that people around the world have for Tibet.
Despite the tremendous progress made by China it still remains a totalitarian communist regime. So for those who want to believe in the Olympic Spirit the question is this: are the ideals of peace, harmony and goodwill best served by supporting the torch relay as it passes briefly through our nation, or by protesting against it?
Right or wrong, the International Olympic Committee made its choice a long time ago when it awarded the games to China.
Tuesday, April 22, 2008
Come Back Peter, Your Party Needs You.
If he wants it, Peter Costello can still be Prime Minister. There are two interesting developments today which could combine to push the former treasurer in that direction. One is the announcement that Melbourne University Publishing will publish his memoirs, at which he is currently working. The second is that according to Newspoll, coalition voters want Peter Costello as Liberal Party leader, with Malcolm Turnbull as his deputy.
Despite Mr. Costello’s decision to step down from the front bench and consider other employment opportunities in the days following last year’s election loss, he has kept his options open, quietly attending to his duties as a backbencher. There would most certainly be strong support within the party for him to return to the leadership team, and take charge. Some observers have questioned whether he has the “ticker” to take it on, but I think the real question is does he have the patience?
After years of patiently waiting in vain for Mr. Howard to pass the baton, it would now take many years more to drive the coalition back into government. Realistically, Kevin Rudd is still enjoying a remarkable honeymoon with voters, and unless he and his government do something incredibly stupid, could well be in office for two or three more terms. Although that is uncertain, it could mean that any Liberal Party leader has a very long wait ahead of them.
Even if Peter Costello succumbs to temptation and takes the leadership, he still might never be Prime Minister. He could become the Liberal Party’s Kim Beazley, guiding the party through the tough times of opposition, but never reaching the pinnacle of office. There is no doubt that Peter Costello has the ability and the experience, and the party would benefit from his leadership. But on careful assessment, he may yet decide that six or nine more years is too long and he could make his contribution to society in another way. And who could blame him? After all, he has already been (arguably) Australia’s most successful treasurer.
Either way, I still think that the next Liberal Party Prime Minister will be Malcolm Turnbull.
Despite Mr. Costello’s decision to step down from the front bench and consider other employment opportunities in the days following last year’s election loss, he has kept his options open, quietly attending to his duties as a backbencher. There would most certainly be strong support within the party for him to return to the leadership team, and take charge. Some observers have questioned whether he has the “ticker” to take it on, but I think the real question is does he have the patience?
After years of patiently waiting in vain for Mr. Howard to pass the baton, it would now take many years more to drive the coalition back into government. Realistically, Kevin Rudd is still enjoying a remarkable honeymoon with voters, and unless he and his government do something incredibly stupid, could well be in office for two or three more terms. Although that is uncertain, it could mean that any Liberal Party leader has a very long wait ahead of them.
Even if Peter Costello succumbs to temptation and takes the leadership, he still might never be Prime Minister. He could become the Liberal Party’s Kim Beazley, guiding the party through the tough times of opposition, but never reaching the pinnacle of office. There is no doubt that Peter Costello has the ability and the experience, and the party would benefit from his leadership. But on careful assessment, he may yet decide that six or nine more years is too long and he could make his contribution to society in another way. And who could blame him? After all, he has already been (arguably) Australia’s most successful treasurer.
Either way, I still think that the next Liberal Party Prime Minister will be Malcolm Turnbull.
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