(contributed)
Australia’s Liberal Prime Minister, Scott Morrison and his Treasurer, Josh Frydenberg, have been gloating like parrots in a granary nearly all of 2019 as to how their government will be returning a budget-surplus.
However, what neither of them or, indeed, any of the other 73 members of the LIBERAL national Party (LnP) will say is that, but for the disasters in Brazil on Feb 19 [with a tailings dam collapsing], then not only wouldn’t there be a budget- surplus for this fiscal year, but Australia would be at least $5bn worse off, due no royalties’ benefits.
Because had Vale S.A.‘s Brumhandino Mine Dam in Brazil not given-way, then China wouldn’t have had to ramp-up its iron ore imports – utilising Australia in the process. Moreover, that disaster duly meant that a tonne of iron ore shot up more than 85% from $70 per tonne to $123.
Quite simply, the only reason for the LnP being able to post its surplus is, entirely due to what went down at Brumhandino, less than 5 months ago. But, once Vale gets its act back in order, which is within a maximum of 3 months, we will see the honey-pot emanating by an Act-of-God thousands of kilometres away in Brazil, dry up.
But, moreover, if China’s economy continues to stagnate then the adverse effects upon Australia’s economy from the double whammy is going to quite detrimental. Indubitably, just about anyone with a grasp of the simple intricacies that propels Australia’s economy is only too aware that it is a tad dodgy. And the Reserve Bank of Australia cutting interest rates by 25 basis points in consecutive months of June and July are blatantly aware that the country is on the skids as, indeed, are numerous other economies; pertinently so in the European Union.
Bizarrely, in this exact duration, the economy of America appears to be humming along OK. Unfortunately, this is effectively [only] due to the US increasing its debt to fund an array of activities.
But what is most wacky with everything that is presently going down comes to pass with stock markets in the US and, also, Australia, reaching records in the exact period that interest rates are dropping; and economies are borrowing more to fund their actives?
Down-under in Australia, there are numerous economic advisory institutions calling for governments in Australia to channel billions of dollars into infrastructural ventures i.e. more roads, tunnels and airports.
Quite disturbingly, these measures currently under way or, those proposed, neither generate real wealth but, moreover, upon completion their specific purposes aren’t being undertaken with agendas that will facilitate industries; which in turn will spawn production of tangible goods. Thereby, these processes would engender real wealth; by virtue of demand from consumers most pertinently overseas.
The tragedy for Australia – and many other foreign jurisdictions, too – is that it is totally unable to compete with manufactures in a swathe of the UN’s so-called ‘developing economies’ in our near region, to produce goods cost effectively. Of course, this has been decades in the making it obviously can be dated with the UN Lima Declaration being signed in May 1975.
So here we are now close on 45 years since then and find Australia being a place which once produced a large swag of things ranging from cars, TVs, radios, furniture, garments etc, etc, to a place that now depends upon services to sustain it. Two of those ‘services’ are international students and tourism.
As it transpires, China is the most significant entity with charging that duo. Obviously, now that Australia’s economy has become so dependent upon being a provider of services, means we are in a very precarious position particularly considering that we are so reliant upon China.
With regards to the international-student-sector Australia currently have over 900,000 of them here with over 330,000 just from mainland China. With regards to this the advocates of the IS sector gloat as to how it ‘boosted the economy of Australia by $32bn’ in 2018. However, those figures are, perhaps, the most devious set of numbers ever complied. This is primarily so, because they only purport the ‘pros’ of the equation but not the negatives. For instance, a huge negative with the IS sector comes to pass with the 600,000 odd [of the 900,000 IS’s here] who are totally dependent and, desperate upon working to survive.
Well, the ABC and Fairfax from as far back as early 2013 has exposed numerous instances of them being willfully exploited with wages and conditions by unscrupulous employers in almost ALL the instances of these exploitation’s by members of their own diasporas. Estimates of how much they are under underpaid runs [in a six year slot] into billions of dollars.
Apart from that, a significant percentage of these IS’s and, also, hundreds of thousands of people here on other temporary work visas sees them working many more hours per week than their visas allow them to do. This is achieved by them aside from getting anything up to $10 less per hour than an award designates – being paid cash-in-the-hand. Thus, they avoid taxes. And this means that state and federal treasuries are deprived of revenue; which ultimately means citizens of Australia have to stump-up the rest to maintain x, y or z.
With pertinent reference to the Indian communities primarily in Sydney and Melbourne it’s estimated that about $400m didn’t find its way into stimulating the broad-steam’s of economies, because it was contained within its diaspora.
Essentially, this is applicable to bode of a circular economy, functioning within a larger economy. Incidentally, as just indicated, a major reason as to why wages have been flat for years is, inherently, due to Australia having about 1.9 million people here on temporary-work visas. Of which IS’s are a primary aspect of such.
Hardly a day goes by over the past few years without there being an economics-guru telling us in the media that, ‘we have to improve productivity‘ in order to boost the economy. Unfortunately, all of those calls are very much hollow! And this is entirely due to the fact that, you can only really improve productivity if, the nation’s actually producing tangible goods either domestically or abroad – that people want and need to use.
Tragically, Australia has pretty much run out of booms and, therefore it’s much vaunted and, fabled, luck! Measures inaugurated by various governments from as far back in the early ‘noughties‘, but particularly since the LNP won office in Sept 2013 – to assuage what we once had have come to pass with touting for immigrants to come here and buy properties and consuming goods and services; thereby, spawning revenue sources by way of stamp-duties and GSTs
With regards to stamp-duties NSW and Victoria acquired billions in revenue by way of the hundreds of billions of dollars, which tsunamied in from China from perhaps 2009 up until late 2017, when Beijing decided to stifle capital gushing out of the country to buy real estate in Australia, Canada, NZ and elsewhere. Thus, now that capital from China is greatly down means that the state governments have to deal with significantly reduced revenue sources.
So what does the future hold now for Australia that we’re in the situations we are?
Unfortunately, there can’t be too much to look forward to; even if interest rates are cut to ZERO. And whilst ZERO interest rates might assist people buying properties the other side of the coin means that people about 3 million or so who are retired and live on their superannuation, are sinking into in truly a diabolical cauldron. Because with interest rates so abysmal means they are greatly affected.
For some that still own properties this scenario can be alleviated by way of them borrowing capital from their properties value. But another downside to this comes to pass, because it inevitably means that those who would be the beneficiaries of estates will receive less. The ongoing consequences of this must mean that, primarily with their offspring they will have less to put towards establishing themselves into the real estate ’arcades’ (sic).
But what’s worse that as technology moves along at the speeds it has been doing must, inevitably, result with employment/stability/tenures being akin to living atop geological mantels. Because these changes in work structures will engender scenarios that’ll ensue with employers only needing to hire at times that suit their requirements.
Essentially, there will be very few jobs in Western nations, which will be full-time. Moreover, low-skilled occupations such as cleaning and the like will be filled by very desperate souls who will undertake those tasks at very low-rates of pay and under woeful conditions.
Revenues to governments shall be pitifully low. Thus, it will be impossible to maintain welfare payments that are anything remotely akin to what has prevailed for decades. With the most down-trodden members of society being worst affected. Upon this occurring, events will confluence and spawn huge sociological upheavals; which will transform our cities into something that will mirror the movie: Escape From New York. And, in 20 years from now, when much of this sociological cataclysm is encroaching on Australia’s cities will be directly linked to the open-door immigration programmes that have been imposed upon us over the past two decades.
Because by the late 2030’s Sydney and Melbourne Anglo/Europeans will comprise a maximum of 40% of those cities populations, and they will become splintered into ethno-cultural enclaves of peoples with allegiances to their pertinent tribe.
In closing, all that’s transpired, particularly over the past two to three decades, seems to culminate with what Aldus Huxley was predicting in his 1932 book Brave New World.
Alas, we’ve learnt nothing from history with how open-door immigration was the crux for the destruction of Rome. And also, many centuries later with Constantinople, too. Regrettably, for Australia along with Canada, Britain and Europe, the inundations of peoples with cultures so different to those of Western people are the catalysts of our demise.