"It doesn't matter how beautiful your theory is, it doesn't matter how smart you are. If it doesn't agree with experiment, it's wrong." Richard P. Feynman

Friday, July 1, 2011

The Destruction of an Economy.

The Gillard Government is presiding over the dismantling of a once-vibrant economy with a series of incompetent decisions displaying it's complete illiteracy in economic matters. Gillard and Rudd's incredible waste of billions of dollars in the BER and insulation fiascos was the start when the Labor government used the GFC as an Obama-type excuse to shovel billions at favored projects under the guise of getting the economy started again. However this waste pales to insignificance compared with the latest Gillard decisions designed to waste the maximum amount of money to achieve very little result. Telstra is being paid more than 10 billion dollars to NOT use copper assets in the ground so a broadband monopoly can be implemented at monumental cost to taxpayers, ignoring the much cheaper fibre-to-the-node solution.
The latest foray into emptying the public piggy-bank involves shutting down perfectly good power stations with more billions in compensation to be ponied up by the long-suffering taxpayer . These power stations are being shut for ideological reasons as their closure will not change the world's temperature one whit but will put many workers out of work. Labor is closing down power plants that run cheaply 24/7 and replacing them with intermittent and unreliable "green" power which is completely unsuitable for grid operation and up to ten times as expensive at the odd times when energy is actually available. Not only will we pay reparations for the closures we will have the double whammy of paying for new base load stations (coal or gas-fired) as stand-by for the non-dispatchable "green power".
Meanwhile Treasury Head Martin Parkinson gives a timely warning that Australia's living standards are going to fall unless productivity improves which is very unlikely as the Labor Fair Work doctrine winds back the clock on reforms necessary to increase productivity. With 20,000 more public service jobs created in Canberra by Labor the growth of the public sector is a huge drain on the economy and it is not subject to normal market forces as this growth occurred since the GFC when private industry has been belt-tightening.
 

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