Hockey Alone on Economics

Joe Hockey is alone on economic policy. Opposition Leader, Tony Abbott, was stunned into silence this morning when asked if he supported Hockey's 9-point plan to control the banks. Twice he was asked if he supported Hockey's plan; twice he  gave an unrelated response. Later, he was asked if that was all just a bit of a misunderstanding withe 9-point plan. His reported response was "Umm ...", followed by a longish silence.

Later still, Abbott made phone calls to radio stations with essentially pre-prepared statements and answers.

Meanwhile, Jon Howard said that Hockey is "not in the same league" as (former Treasurer) Peter Costello. On 22 October, The Australian reported: "Senior Liberal MPs, including frontbenchers, told The Australian yesterday they did not agree with the position Mr Hockey had taken on the banks and said it demonstrated lack of judgment. "This is certainly not Coalition policy," one frontbencher said."

Among the ideas were:

• legislation to regulate the interest rates banks can charge.
• An investigation by the Prudential Regulation Authority to investigate the risks banks take.
• More pressure from the ACC on alleged price-collusion the big 4 banks
• other points in the plan are more difficult to find,  but legislative regulation of the banks is definitely contrary to the Liberal Parties free-market policies.

For all the bagging Hockey has received, a new Banking Inquiry might not be such a bad idea. They make noises about rising costs of funds (ie overseas interest rates,because about 2/3 - 70% of their loan funds are sourced overseas. However, they quite deliberately left out the bit about the high $Aus benefiting them enormously while they (re)negotiate their 3 and 5 year loans!

Deregulating the banking sector created an oligopoly: the big 4 banks control the vast majority of home loans, and they flex their individual & combined market power. Their repetitive statements about the need to increase interest rates is classic consumer softening by repetition and frequency. It should be resisted, especially in light of the significant increases in their profits, and profit margins! An inquiry is one way, but not the only way, for more people to be aware of this information, and counter the banks advertising-by-repetitive-statement tactic.

For all that, I believe Joe Hockey is rather alone in the Liberal Party on economic policy, and the "amended", watered-down plan taken to Shadow Cabinet and ultimately approved by them was really them saving Hockey's backside. They won't do it too many more times.

John

Hockey's Bank Bashing Blooper

This week saw Shadow Treasurer Joe Hockey indulge in a little bank-bashing as he tried to score a few political points and be seen as 'hero' to those with a mortgage. It seems to have backfired, on a number of levels.

First, he proposed legislative controls on bank interest rates. That is, he has proposed either aan extreme socialist policy, or an extreme right policy. It is certainly a policy that seems contrary to Liberal Party policy and beliefs, which say that "we simply believe in individual freedom and free enterprise". Legislating interest rates is contrary to both of those beliefs. Malcolm Turnbull, perhaps the Liberal Party's only moderate with any public profile, did his best to distance himself from the comment. Tony Abbott said nothing. (Aside: John Howard and Peter Costello would have publicly decried the suggestion and privately carpeted the perpetrator, while making public statements about banks not needing to raise rates.). Liberal backbencher Don Randall said it was a "typical lunatic fringe idea", not realising it had come from a member of his own party with leadership ambitions.

Second, he proposed an inquiry into the financial services, particularly of banks. The concept is worth considering, but Hockey showed he was just a talking head by indicating he had no plan for any terms of reference.

It seems that, in his quest for a headline and populist policy, Joe Hockey has somewhat alienated members of his own party, and earned the criticism of business and economists, especially in the media, and the Government. While Tony Abbott does not want the instability, real or perceived in polls, associated with a reshuffle, Joe Hockey's days as Shadow Treasurer could well be numbered. Post-Christmas / New Year would be, perhaps, the least damaging time for an Opposition reshuffle.

Populist announcments are never good policy.

John

A Saint For All

I have been on holidays for several weeks, so I apologise now for not posting.

Last night Mary MacKillop was sanctified by Pope Benedict. Some have already pooh-poohed the idea, questioning why people would believe in miracles. But faith is a difficult thing to explain. Self-belief is important to our psyche; it is the basis of our self-confidence. Self-confidence increases the chances of success in the things we do. But self-belief and self-confidence are not measurable, in the same way that a length of timber can be measured. Nevertheless, the personal and social effects on a person lacking in self-belief and self-confidence can be clearly observed.

As an abstract concept faith is also difficult to measure. It stems from the confidence in the truth, or trustworthiness, of a another person; a thing; or a concept, such as "God", or the tenets of a religion. Yet the works of people who truly live according to a philosophy of goodness, whether secular or religious are tangible evidence of their faith.

Mary MacKillop was a strong Catholic woman. She set about improving the lives of individuals who were poor, disadvantaged and outcast. Along the way, she upset some people, predominantly me of power in a patriarchal church in a patriarchal society. Yet her faith sustained her, and with the help of others, and her own strength of character and faith, she prevailed.

Her life, her work, and the work of her nuns did make significant material difference to the lives of others. In that respect alone, she is worthy of recognition. Her elevation to sainthood in the Catholic Church is one way that it recognises her work, her life, her faith as a beacon of Catholicism. The work and life of St Mary MacKillop should also help us to focus on how we can help others; and how our society, our politicians treat others.

As an aside, I believe (there's that word again) that everyone in society should do work for society, other than their paid employment and family commitments. As for me, I have been a member of a service organisation, I donate blood or plasma regularly (it's an unpaid donation in Australia), and I help with tasks at my local church.

Johnb