Right Pulse

Ever since Barnaby Joyce became opposition spokesman for Finance he has been hounded by the ALP, unions and their sympathetic media for comments he made about the risks to US sovereign debt. In this context he also has warned about the risk to Australia of continually racking up more Federal debt.

I’ve outlined on a number of occasions why Barnaby is right on the mark. Virtually every month more evidence comes out supporting Barnaby’s position. Here are two such examples I highlighted in January and February. Here is another example supporting Barnaby this month.

Investors should avoid government securities, including U.S. Treasuries and the debt of other nations, because of the risks associated with excessive borrowing, a leading U.S. fund manager said on Tuesday.

“The most dangerous market there is national government debt because the borrowing doesn’t seem to be ending soon — and it’s not just a U.S. phenomenon,” Dan Fuss, vice chairman of investment manager Loomis Sayles, told Reuters.

The important point here is perception and confidence.

Fairfax is back on its anti-Defence hobby horse. The latest article scrutinises defence contracts and finds that, shock horror, Defence spends money on fitness equipment, sport, leadership training and travel!!!!! But wait there’s more.

….two biggest beneficiaries of the Defence budget were the US government’s foreign military sales program and Australian Aerospace, a subsidiary of the European Aeronautic, Defence and Space Company.

Insight. Most of our equipment is of US origin, making Boeing Australia the biggest Boeing subsidiary outside the USA by employment numbers, and Australian Aerospace assembles helicopters in Brisbane. Then there are these lies:

…raising questions about the accounting rigour within the $26-billion-a-year agency

It’s not an agency but a Department – very different funding arrangements entail.

This is despite review after review warning that the department’s spending was out of control.

Government exercises control over Defence’s budget. The Department continually under achieves its budget.

…the Herald’s examination raises new questions about the accountability of a department that has become the single biggest spender of taxpayer dollars.

Not really true. The biggest spender of tax-payer dollars remains by far and away welfare, or whatever the government is calling it these days – a government-dependency class and guilt industry complex.

Sit back and watch the PM and his ALP state colleagues beat each other up over health reform and then oppose most of what ever comes out of the mess.

KRISTINA Keneally has hinted that NSW will not support Kevin Rudd’s $50 billion health overhaul at next month’s COAG meeting unless he reveals all five key parts to his ambitious reform package.

Funny that because only a day ago she was a keen supporter.

The Premier, Kristina Keneally, said NSW cannot afford to reject Kevin Rudd’s health changes…

This too and throw will go on for weeks, if not months. It will make Rudd look inept.

The Australian’s headline to Rudd’s new hospital plan says it all:

Rudd’s magic cure: more process

I’m not in favour of a government take over of anything, state, federal, local….whatever. The problems will still be the same. Rudd’s hospital proposal is like a mutant cross between Abbott’s local control concept and Rudd’s desire to control everything. The proposal is destined to fail. And basically stealing state GST revenue to pay for it all is consistent with Rudd’s desire to reward failure.

WESTERN Australia’s Liberal government yesterday warned Kevin Rudd it would not surrender 30 per cent of its GST takings and allow health decisions to be made in Canberra.

Currently WA subsides east coast ALP government incompetence via GST re-distribution arrangements, whereby WA has to give up 30 cents in every GST dollar to NSW. So Barnett knows what Rudd’s plan is designed to do to the Coalition’s re-election prospects in WA. Deny the WA government valuable GST revenue in order to squeeze their budget.

Premier Colin Barnett said the commonwealth’s proposal to increase its contribution to health by taking money from the states was a “sleight of hand”, “very unsatisfactory” and unachievable without the co-operation of the states…”We will not tolerate a situation where, from Canberra, all the decisions relating to our hospitals and most of the healthcare decisions are made,” he said.

If Colin Barnett wants to really torpedo Rudd’s plan and secure WA independence then he should privatise WA hospitals. Use the proceeds from the sale to establish a health fund to help pay private insurance premiums for those without, while offering tax relief from saved annual health spending for those with. Nearly half of all Australians currently have private hospital cover as it is. Tax relief could come in the form of reimbursment of Federal income tax, GST and/or land tax.

A massive injection of private investment is the only way to remedy the current state of public hospitals. More government never solved anything.

UPDATE I

Scary stuff from Rudd:

States have until a Council of Australian Governments meeting on April 11 to give their answer. Mr Rudd said if they do not ‘’sign up to fundamental reform” he will hold a referendum either before or at this year’s federal election ”to give the Australian government all the power it needs to reform the health system”.

The hospitals issues is symbolic of Rudd and his desire for ‘all the power’ across a range of other issues as well. Colin Barnett should head Rudd’s bushranger gang off at the pass by selling WA’s public hospitals to private investors or local communities. The alternative is having Rudd trying to run hospitals, a venture infinitely more complicated than any other project failing he has so far embarked on – ceiling insulation, school lap tops, school building investment, etc…all abject failures. How well do you think he will do on health? At least with a sell off, Barnett could continue to exercise some meaningful control over health in the state, independent of a socialist meddling PM in Canberra.

UPDATE II

Here are some quick calculations to make people think.

Total public health care spending in WA is forecasted to be $4.6 billion in FY 09/10. Let’s assume in getting out of the health care game the government keeps $200 million for random health services, etc… making $4.4 billion – not including mental health, etc…. The population of WA is 2.2 million - guessing around 30 per cent having private health insurance not just to avoid tax. The national average is nearly 50 per cent so I am being generous. That works out on a per capita basis of around $2850 on public health care spending. Now there is around 120 public hospital/service facilities across the state. Let’s assume that the average sale price for all the facilities is $40 million giving a total sale price of $4.8 billion. Which is significantly less than the total assets reported by the Department of Health. Now $4.8 billion at 5 per cent – with 2.5 per cent retained for inflation - averaged over 10 years equals $120 million per annum. Making total annual cash available for tax cuts and/or private health premium subsidies of $4.52 billion or nearly $3000per non-private hospital person in WA. To put this in perspective, the top of the line no deductible ‘blue ribbon’ Medibank Private hospital premium for a single person is between $1200 – $2000 per year not including the 30 per cent Federal government rebate and any potential discounts from bulk ordering such as families, businesses, etc…. I know which option I would rather have – take my $3000 and get my own insurance policy and get the government out of my life.

UPDATE III

Almost on queue a story has appeared which illustrates my main point:

THIS is the list of 117 NSW hospitals senior health clinicians claim will struggle to survive under Kevin Rudd’s health reforms.  They include services in remote areas of NSW, regional centres, as well as inner-city hospitals in Balmain, Rozelle and Auburn. All are currently block-funded and considered financially unviable under the Federal Government’s plans for a pay-for-service model. They don’t perform enough medical procedures to fund their own existence.

Here’s a revolutionary idea. Instead of closing the hospitals down, because the government can’t run them, why not try and find a private buyer for all or at least some of the facilities?

UPDATE IV

Gee, is this an admission of government failure:

The Rudd government doesn’t need to wait for state approval of its hospital plan to move public patients on waiting lists into private hospital beds, a leading health group says….

It says an investment of $450 million would move the estimated 89,000 patients on public surgery waiting lists into private beds.

“There is the option today of using private hospital beds to treat a large number of those people, you don’t have to wait,” CEO Martin Laverty told ABC Radio.

So Rudd seeks to solve public health sector incompetance with private sector help?

Hillary Clinton has backed Argentine demands for the UK to negotiate over the Falkland Islands and by extension BHP’s oil exploration and drilling rights in the area. The Argentine ambassador to Australia has already warned BHP over their involvement in the Falklands and yet nothing from our government. Rudd’s infatuation for Obama is probably clouding his vision of the issue. The same could probably be said of Gordon Brown, one of the most hideous freedom hating men to ever be British PM.

UPDATE I

Brown has rejected Clinton’s offer – there must be an election around the corner:

MPs also pointed out that the White House’s refusal to back Britain over the Falklands was in stark contrast to Tony Blair standing shoulder-to-shoulder with the U.S. over the Iraq invasion in 2003.

So much for loyalty.

The latest Newspoll has the Coalition ahead by 1 point on the primary vote, behind 4 points on 2PP. The Greens primary vote has suffered a mini-collapse by 3 points down to 9 points. Not sure how significant that is. Abbott’s personal approval continues to rise but still a long way behind Rudd, 55 to 30, however Abbott’s satisfaction rating is nearly as high as Rudd’s now. It has jumped 7 points in 1 month.

I think Abbott would be a little disappointed that the Coalition are not closer on 2PP even though this month is an improvement over last month. There is definitely a clear trend towards the Coalition, though the dependency class is probably hanging tough with Rudd for now until they see what fiscal treats will be doled out to them post-election. The key may be the ‘other’ and ‘uncommitted’ vote, which currently stands at 15 points. Tapping into that little mystery by finding out who these people are may avert the need to sell the Coalition’s soul to the Green devil.

UPDATE

Brilliant observations in comments.

A Fairfax poll has the ALP and Coalition all level at 50 per cent on 2PP. I’m not getting too carried away but it is definitely another sign of a trend away from the ALP:

An exclusive Sun-Herald/Taverner poll shows Labor is now level-pegging with the Coalition.

On a two-party preferred basis, both sides have 50 per cent of the vote – a drop of almost 3 percentage points on Labor’s election-winning 52.7 per cent in 2007.

I might get carried away if Newspoll comes back with a similar result. Rudd is still ahead of Abbott by 13 points on preferred PM, so there is still some work to do. Imagine if the ALP loses with Rudd’s popularity. I can’t see anyone within the ALP at this point with the power to emulate Rudd’s appeal. So Rudd will be safe for a while, probably even if the ALP loses the next election.

I feel that Garrett has become the scapegoat for Rudd’s incompetence:

Federal Environment Minister Peter Garrett has been stripped of responsibility for the household insulation scheme and other energy efficiency programs.

Prime Minister Kevin Rudd has announced he is establishing a separate, stand-alone department for Climate Change and Energy Efficiency.

Senator Wong is the winner, but she is probably the worst Minister in the government. Her megalomania tendencies are pretty scary. Something the main stream media have yet to really grasp.

Would make the basis of a great election advertisment.

UPDATE

We are in the middle of a boom, but the Rudd debt just keeps on growing:

Reserve Bank of Australia deputy governor Ric Battellino said the nation was better placed to deal with the economic challenges than in previous resources booms, when a fixed exchange rate hampered trade flows and threatened inflation.

In a speech to the Sydney Institute on Tuesday, Mr Battellino said the current boom began in 2005 and was interrupted somewhat by the global financial crisis before resuming its course and was now attracting strong investment.

So prior to 2005 the Howard government had no trouble balancing the budget. It goes to show that the GFC has been used as a scapegoat to push through Rudd’s socialist agenda.

Rudd’s duplicity knows no bounds:

THE government will unleash the full resources of its major spy agencies, including phone taps and satellite surveillance, against people-smugglers and other criminal gangs threatening Australia’s border security.

Well Rudd might want to start with himself, given that he caused the latest flood of illegal immigrants by laxing entrance and processing requirements. This is part of Rudd’s ‘look tough’ mantra, while his actual policies and legislation do the exact opposite.