What Howard Overcharged, Rudd’s giving back…

by Crystal on November 28, 2008

BRISBANE, AUSTRALIA - NOVEMBER 24:  Labor lead...

Image by Getty Images via Daylife

The OECD is now saying the same as I have: Australia’s not going to get hit as badly by this financial crisis as the rest of the world. Why?  Well aside from having a bit more common sense than to borrow huge amounts of money when we shouldn’t (mostly), our national outlook is “she’ll be right” – and because of that, she will be.  [If you want to read why that outlook is important, see my post on The Value of Money, and Top 10 Things To Remember When Times Get Tough.  We're also not at the point where we'll trample people to death for a sale like they just did in the US.]

Unfortunately it looks like even so, a bit of the brainwashing we’ve had for the last 12 years is still around.  From the news stories anyone would think Kevin Rudd was apologising for the fact that we may have to go into deficit and lose that surplus that John Howard was so proud of.

Excuse me?  We’ve been overcharged the cost of running the country for a decade, while all the income producing assets that could reduce our tax burden were sold off, and now we’re (finally) getting that money put back into actually running the country (just when we happen to need it most), the stories are all “oh no, we might have to have a deficit again”.

I say: Thank Goodness we are finally going to have a bit of grease put back into those desperately squeaky, oil-deprived wheels!!!

The fact is, now that just about all the income-producing assets have been sold off, and with an escalating demand for social services as the population shifts towards retirement, whoever inherited from Howard was bound to go into deficit.

Right now, though, as the global economy slides towards recession (or even, heaven forbid, depression) there are incredible opportunities opening up.  Warren Buffett is looking at spending $28 million this year alone in BUYING while undervalued investment opportunities abound, thanks to fearful investors looking to offload.  And our PM is making the same kind of decisions on our behalf.  With that kind of example, I’d say now is definitely the right time to spend that painfully accrued hoard.

To my mind, I’d love to see some of that economic stimulation go towards the re-acquisition of a few assets that could pump up the coffers independent of taxation income.  Right now, they’re going cheap.  What do you say, Kevin?

Oh yes, and on the topic of opportunities, the other major story was on the ABC childcare centres, and the fears around how many of them would close.  I’m wondering if maybe some enterprising parents might take advantage of it, and offer to take over and run their local ABC centres themselves.  Employee takeovers have worked elsewhere, why not in this situation?  Staff are already there. They’re paying in for childcare already. Why not band together and cut out the middleman?

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