News That’s Fit To Punt – 15/Oct/2013

Tony Says He’s Got A Man Date

It’s a bit gay isn’t it Tony?

Alrighty, so Tony Abbott is saying that he has a mandate to repeal the Carbon Tax. He’s been banging on with this since winning the election and as far as we can tell, he’s put the topic at pole position of his agenda in Parliament. I guess if you say you’re going to do it and win an election it might look like you have a mandate but most people polled seem to think this is a terrible idea; and that the reason they voted for Abbott was because they reviled the Rudd-Gillard-Rudd ALP so much but hadn’t really given much thought on the ramification of ousting the ALP government.

So much for the wisdom of crowds. Our electorate is stupid.

You can basically see that not too deeply down, Tony Abbott is still a Climate Change Denialist who has hijacked the agenda so he’s in a hurry to sort this out in favour of his denialist position as quickly as he can. This then turns into the absurd spectacle of Tony Abbott trying to apply pressure on to the new Opposition Leader Bill Shorten like so:

Prime Minister Tony Abbott says he believes Bill Shorten will be forced to back the Coalition’s plan to repeal the carbon tax, saying Labor’s new leader is “nothing if not a political pragmatist”.

Mr Abbott dismissed the new Labor leader’s repeated statements in support of pricing carbon, saying his government was “giving the Labor Party a chance to repent” on the issue.

It’s interesting how he uses that word “repent”, as if introducing the Carbon Pricing mechanism was somehow a sin. You imagine that in Tony Abbott’s mind, any market driven mechanism to push down carbon emissions is somehow ‘evil’ (like ‘adultery’ or ‘murder’ – the mind boggles). Is it the tax part that bothers him? Or is it simply that he just disagrees with the mountain of scientific data?

Whatever little faith you had in his Direct Action policy to replace the Carbon Emission Trading Scheme evaporates like so much morning dew in the rising heat when you consider that word “repent”.

I Voted For Him But He’s A Terrible Pundit

Mark ‘Arm-Breaker’ Latham said that the ALP faithful shouldn’t vote for Anthony Abanese because ‘Albo’ had terrible political instincts and was basically too wishy washy for Mark Latham’s Liking. Whilst ranting on against union power and factional deals within the ALP, Latham said he was voting “ABA. Anybody-But Albo”. Which is to say he voted for Bill Shorten but didn’t really want to endorse Bill Shorten in any positive manner, no.

I guess Bill Shorten is a tough character to take given the Rudd Gillard years and the role he played in both PM swaps. As ‘faceless men’ go, he’s been the very public face of the faceless men, and so, on some level probably deserves to be given the shot in the same spirit that led to John “I don’t take bribes But I don’t report Them’ Robertson leading the ALP in NSW. I guess we could be heading for a travesty with Bill Shorten as Opposition Leader but I doubt Albo was a better choice.

While I am no member of the ALP – so this is completely an outsider’s view – I think Albo was and still is a potential liability. One shouldn’t cast aspersions but one has to ask how close Albo is to Eddie Obeid and whether he will get linked to those wonderful ICAC hearings slated to deal with the morbid Obeidity in NSW. Oh, and that Ron Medich guy who put out a hit on that McGurk guy. In that sense ‘Deputy Prime Minister Albo’ might have been the high point of Anthony Albanese.

Shorten has his failings. People have been writing about those in spades. In amongst reading all the bad press, one thing I did like about Bill Shorten was that after he switched back to supporting Rudd, he came out fighting. He wasn’t fighting for his reputation, but for deeply core ALP values. You know, the stuff we always ascribe to Gough and Bob and Paul. On that level he appears to be a politician who speaks on behalf of a greater portion of Australia than Julia Gillard, while possibly not having the insane charisma of Kevin Rudd. You’d have to say the guy has a fighting chance; especially against a willful, dogmatic, Tory ideologue like Tony Abbott.

The other net benefit of the Shorten leadership over an Albo leadership is that you get Tanya Plibersek as Deputy Opposition Leader.I’ll be honest with you, I think Tanya Plibersek has been great through the election campaign and into this post-election period. Any time I’ve seen her on Q&A, she’s been setting the record straight and has countered the attempts by the Coalition to paint the Rudd-Gillard government as somehow a failed government. She’s been logical, persuasive and very circumspect.

If you had to come up with a credible one-two punch, it’s hard to do better than this duo, given the ALP’s current state. Anna Burke might feel bitter and twisted about the shadow cabinet selection, but the Shorten-Plibersek team up gives you a lot of hope that the ALP can get their mojo back. When I think back to how negatively I felt about the original Rudd-Gillard team up back in 2006, I think this is a lot more promising. And I never thought I’d be saying that so early after an election loss. They haven’t even gone back to Parliament yet.

Housing Bubbles Are Harder To Observe Than The Higgs Boson

Look, if a Nobel Prize winning economist says you’re in a housing bubble, you probably are in a housing bubble.

Robert Shiller, the joint winner of the Nobel prize for economics, is worried about bubbles. The Yale University professor expressed alarm at the rapid rise in global house prices soon after the award was announced.

“There are so many countries that are looking bubbly,” he said.

If he’s right, and bubble trouble besets Australia, it’s bad news for growth and jobs.

The Reserve Bank has cut interest rates to record lows to encourage businesses and consumers to spend and invest as the effects of the mining boom fade. The aim is to boost non-mining sectors like home building, retail and tourism so they can take over from mining as drivers of national economic growth.

But low interest rates have also stoked demand for established houses. Sydney has led the way – the city’s median dwelling price (comprising houses and units) rose by a frothy 13.1 per cent in the year to September.

If house price growth becomes unsustainable the Reserve might decide to take some heat out of the property market by lifting interest rates. It would be unlikely to tolerate the longer-term risk of a devastating house price collapse.

But under that scenario, interest rates would be set at a higher level than required by the broader economy. The cost of containing house prices could be subdued growth and fewer jobs.

The really odd thing about all this is that the RBA has been insisting we don’t have a Housing Bubble in face of the same evidence being presented to the Nobel Laureate Economist. I mean, we take the existence of the Higgs Boson on about the same level of scrutiny – and they gave Dr. Higgs his Nobel earlier in the month – so I’m sitting here wondering what exactly the RBA thinks is going on that makes it not a bubble; but here it goes…:

But AMP capital chief economist Shane Oliver believes many of them don’t fully understand Australian property markets.

“The basic problem here is a lack of supply caused by chronic under-building,” he said. “There is a shortage of housing in Australia and that partly explains why it is so unaffordable.”

Given the blend of very low interest rates, a stable economy and pent up demand, it is no surprise property markets are showing signs of life. While Sydney property prices have grown strongly in the past year, this follows nearly a decade of weak growth. Data published by the Housing Industry Association this month shows the average annual growth in Sydney house prices over the past 10 years has been just 3.4 per cent – a rate that has hardly kept up with wages.

At this stage, the Reserve Bank isn’t convinced by talk of housing bubbles in Australia. Last month the bank’s assistant governor, Malcolm Edey, said those predictions were “unrealistically alarmist”.

Dr Edey cautioned against reaching for “the bubble terminology” whenever house price increases were higher than average, because by definition that’s half the time.

AMP Capital’s Shane Oliver offers an explanation why Australian real estate is so expensive and unaffordable, but it’s really not an answer as to why or how this is not a Housing Bubble. The RBA says if you take the average growth of property in Australia, it’s only 3.4% p.a. which sits behind wage growth over that time, so it can’t really be considered a bubble. I’m more interested in how that ‘average’ was derived, because the mathematician inside me smells a rat.

I guess we’ll just have to wait and see how things play out.

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