Joe Hockey finds himself offside

A speech Joe Hockey delivered to economists in London this week is raising eyebrows right across Australia.

The Shadow Treasurer said: “government spending on a range of social programs including education, health, housing, subsidized transport, social safety nets and retirement benefits has reached extraordinary levels as a percentage of GDP.”

And he warned that: “an inadequate level of revenue has forced nations into levels of indebtedness that, in an age of slowing growth and ageing population, are simply unsustainable.”

Mr Hockey urged Western countries, including Australia, to look at the Asian alternative.

“The sense of government entitlement in these countries is low,” he said.

“You get what you work for.

“Your tax payments are not excessive and there is an enormous incentive to work harder and earn more if you want to.

“By western standards this highly constrained public safety net may, at times, seem brutal,” Mr Hockey admitted.

“ But it works and it is financially sustainable.

“Contrast this with what we find in Europe, the UK and the USA.

“All of them have enormous entitlement systems spanning education, health, income support, retirement benefits, unemployment benefits and so on,” the Shadow Treasurer said.

Predictably, a delighted Julia Gillard pressed Mr Hockey to say just where a Coalition government would cut welfare and other spending.

A senior colleague, Andrew Robb, quickly said that Mr Hockey had been speaking mainly about Europe.

Tony Abbott was cautious, too, in his response to his Shadow Treasurer’s ideas.

“Well, Joe was making the very obvious point that governments have got to live within their means,” Mr Abbott told reporters in Queensland.

“ Countries have got to live within their means.

“And (Mr Hockey) was making the obvious point that if you look at a country like France, they spend double on social programs as a percentage of GDP than Australia,” Mr Abbott said.

“We haven’t got there yet and it’s the job of the Coalition to ensure that we never do,” he added.

Clearly, though, Mr Hockey is no fan of Oliver Wendell Holmes, the American jurist and poet, who once said: “I like to pay taxes. With them I buy civilization.”

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Credit card fraud rising

Take care.

Credit card fraud and scams are on the rise..

Personal fraud cost Australians $1.4 billion last financial year.

The Bureau of Statistics reports that more than 660,000 Australians suffered from credit card fraud in that time.

That is 3.7 per cent of the population  aged 15 or over.

Only 2.4 per cent of Australians had been victims of credit card fraud in 2007.

The Bureau also reported that 1.2 million Australians had fallen victim to at least one case of personal fraud last financial year.

That represented 6.7 per cent of the population, a rise from 5 per cent in 2007.

The Bureau’s survey also showed that three in five victims of personal fraud lost money.

The costs were high.

The Bureau put it at an average of $2,000 each.

Good news was scarce, in the survey results.

But there was some.

Identity theft fell.

Even so, the Bureau said  44,700 Australians had suffered from it, last financial year.

That was 0.3 per cent of the population, down from 0.8 per cent in 2007.

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Julia’s new media management

Julia Gillard has made two popular announcements this week.

Firstly, that most of our troops in Afghanistan will be coming home earlier than expected.

Secondly, that the Reserve Bank will have room to cut interest rates.

Nothing unusual about that, you might think.

Prime Ministers like making popular announcements.

That’s right, of course, except for one odd thing.

The media management.

Both times, the announcement was made in newspaper stories which  contained a strange phrase.

“In a speech to be delivered today…”

That kind of thing.

This is worth watching.

It shows that the Prime Minister’s is now on the offensive.

Leaking information, in a way that makes sure it gets the maximum exposure.

As an old reporter, myself, I can assure you that journalists like nothing more than a leak.

Tomorrow’s news today.

Even if the price is repeating the story in tomorrow’s paper, after the speech has actually been delivered.

Just for the record

The fact that the Prime Minister’s office has started doing this now is no accident.

If the polls are right, Ms Gillard must turn things around very smartly, if she is to have any chance of survival in next year’s Federal elections.

And they usually are.

The Queensland elections showed that.

Publicity wise, the Prime Minister has had a wonderful week.

“Yes,” she said, “your son will be home from Afghanistan sooner than you thought.”

“And yes,” she added, “your home loan payments will be cut, too.”

Tony Abbott and Joe Hockey aren’t quaking in their boots yet.

But they are sitting up, taking notice.

There are limits to this kind of thing, of course.

There are, after all, only so many popular announcements to be made.

Julia’s office, though, is finally showing some skill in handling such matters.

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HSBC rapped over home loan ads

The HSBC bank will change advertising,  which a financial watchdog has called “potentially misleading.”

In a statement today the Australian Securities and Investments Commission said the bank’s ads had headlined a claim that consumers could get “up to 0.95 per cent off” a HSBC Home Smart Loan.

“The campaign was widely promoted using online, print and outdoor advertising,” ASIC said.

But, in the fine print, the bank disclosed that only loans of $1,500,000 or more would be eligible for the full cut.

ASIC said the bank had agreed to change the wording of its ads.

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Swan welcomes IMF report

Wayne Swan says the IMF has confirmed that Australia’s “economic fundamentals” are strong.

The Treasurer said the Australian economy is now expected to outperform every major advanced economy over the next two years.

However Mr Swan again rejected Ralph Norris’s assertion that the government’s intention to produce a budget surplus is “mindless.”

In fact, Mr Swan said, a surplus is necessary

Mr Swan noted that the IMF is forecasting growth of 3.0 per cent for Australia in 2012 and 3.5 per cent in 2013.

Mr Swan said these forecasts are broadly consistent with the government’s own outlook.

The IMF is also more optimistic about the global outlook, Mr Swan said.

While global challenges remain, there have been encouraging signs of stabilisation since the start of the year,” the Treasurer said.

“The improved outlook has been driven by an increase in activity in the United States and better policy responses to the European sovereign debt crisis,” he added.

However the building industry is still soft.

The Housing Industry Association’s Chief Economist,  Harley Dale, said figures the Australian Bureau of Statistics has just released confirm that both new housing and alterations have been very weak.

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Adviser banned

The Australian Securities and Investments Commission has permanently banned a former insurance broker from providing financial services.

In a statement just released ASIC said  the man  Alan Charstone, of Croydon South in Victoria, had been an authorised representative of Insurance Advisernet Australia Pty Ltd (IAA).”

The Commission added: “ASIC’s investigation found Mr Charstone engaged in dishonest and deceptive conduct between August 2009 and July 2010 in relation to business and personal insurance.

” Specifically, Mr Charstone failed to place adequate insurance cover for clients and misappropriated client funds.

“According to an initial report prepared by IAA, the conduct involved 54 clients and cost IAA a total of $58,803.68 to reinstate and/or place insurance cover for each client.

“ASIC banned Mr Charstone after finding that he had not complied with financial services laws and that there was reason to believe he would not comply with financial services law in the future.

‘It’s important brokers in the insurance industry act with honesty and integrity as they are entrusted to help consumers and small businesses make important financial decisions. Having no insurance cover or inadequate insurance cover can have a devastating impact on consumers or small businesses if something goes wrong’, ASIC Commissioner, Peter Kell, said.

IAA, which cooperated with ASIC during the investigation, has recovered $9,000 from Mr Charstone. Mr Charstone has agreed to repay to IAA, among other costs, the amount of $12,489.51 on account of funds misappropriated by him and as a contribution towards restitution owing to IAA.

ASIC commenced an investigation after it received a breach notification from IAA.

Mr Charstone has the right to appeal to the Administrative Appeals Tribunal for a review of ASIC’s decision.

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RBA talks of a rate cut

The Reserve Bank is now prepared to talk about cutting rates, when its board next meets on May 1.

It did so, quite clearly, in the minutes of its last board meeting, on April 3.

“ If slower growth in demand could be expected to result in a more moderate inflation outcome, then a case could be made for a further easing of monetary policy,” the bank said, in those minutes which have just been released.

Wow.

Indeed, the bank even became expansive on the subject, adding: “ The Board would have the opportunity at its next meeting to review the inflation outlook based on comprehensive new data on prices, as well as information on demand and output.”

“Prudence,” though, is still a decisive word in the board’s vocabulary.

“Members judged it prudent to evaluate those data before considering a further policy adjustment,” the board added, in those minutes.

Those words, of course, referred to the board’s last meeting, not the next.

And who really know what the Board will do, when it meets on May Day?

Even in the latest minutes, though, it was prepared to admit that there are already some flat spots in the Australian economy.

The critically important services sector, for  example.

“Service exports had also been weak, “ the bank said.

It said this reflects “a decline in the number of visas for foreign students as well as the effects of the higher exchange rate and lower external demand.”

The bank, though, sought to justify its wait and see attitude, by saying some hot data would be coming up, before the May 1 meeting.

“The Board would have the opportunity at its next meeting to review the inflation outlook based on comprehensive new data on prices, as well as information on demand and output,” the minutes said.

“Comprehensive, “ of course, means the full picture.

So, no doubt, the developments, to be taken into account, will include TV pictures of some 350 Toyota workers being escorted off the site of that car maker’s Altona plant, because they have lost their jobs

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A rate cut?

A rate cut next month is still likely.

The minutes of the Reserve Bank board’s last meeting, on April 3, make that clear.

They recall that the Board last eased monetary policy late in 2011.

“Since then members had lowered their assessment of the pace of growth somewhat,” the minutes say.

“If  slower growth in demand could be expected to result in a more moderate inflation outcome,  then a case could be made for a further easing of monetary policy,” they add.

However, the board added a caution.

It said it would have the opportunity, at its meeting on the first Tuesday in May, to “review the inflation outlook.”

It said that evaluation would be based on “comprehensive new data on prices, as well as information on demand and output.”

The minutes said the board had thought it prudent, at its last meeting, to evaluate that data “before considerinf a further policy adjustment.”

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