There is a change at the top but the same pack of fools will still be there. All this does is increase the amount of uncertainty in the administration of government. The best thing for all of us is a new election. If she wins good on her but I do believe given all the garbage that has gone on for the last 30 months with her as the number 2 person in the government it is time for the voters to decide.

So standby the new Julia Gillard site will be here real soon

Firstly dumping KRudd will produce an enemy without doubt. He’ll say one thing and do another. It will also be an admission of failure by the Labor party in KRudd’s administration including the whole cabinet.  It amounts to an admission of guilt.

Gillard is seen as the saviour but this will only put her and her part in all the debacles well and truely in the limelight. Labor has tried to paint her as Saint Julia but the reality is she is a left wing anti business socialist who has stood by while the BER has been rorted left right and center.

Her workplace rules suit unionists and collective barganing but for the bulk of workers put them at a disadvantage. Since the start of 2009 Australia’s manufacturing sector has shrunk 6% because of her 1970′s industrial rules that even the likes of Bob Hawke and Paul Keating have slammed.

She may well become Australia’s first female prime minister tomorrow but unless she holds out until the latest possible date for an election (April 2011) she may become the shortest serving Prime Minister in modern history.

Who will win? Well that’s line ball but I think personally it will be 65-50 Gillard’s way.

Paying $9 billion dollars for Telstra’s customer swap sounds good at first until you check the announcement carefully. This is what Telstra and it’s shareholders will get after tax. So the real price is closer to $12billion pre tax and here we have a problem.

Simply put $2-3billion of your (the taxpayer) money has been spent on an aging network that does not even meet the  current requirements of urban Australians for a purely political headline. Telstra knows that effectively their copper network is bleeding and losing about a $1billion a year. In fact their own internal reports state that the copper network will cost more to maintain than it will receive in revenue by 2015.  The current cable network if it was not carrying Foxtel would never have made a profit in it’s history.

$9 billion to get the customer base was a fair price in normal commercial terms if tax was payable but this is not the case. On top of this Telstra is receiving a further $2billion for Universal Service Obligations something they have wanted to get out of for years.

From a financial point of view in the way it has been announced it looks like a win-win-win. A win for the consumer, the government and Telstra. Look closer and you will see the truth.

The winner without doubt is Telstra. They wanted $12billion in commercial terms and they got it and then some. Remember they are being payed $11billion in a post tax world as against looking for $12billion pretax. They also get rid of a network that had a best 10-15 years left in it operationally and only about 5-10 years financially. A big win possibly to the tune of  $5billion.

With 4G spectrum up for grabs shortly Telstra does not want to be tied to physical lines but wireless. You and most consumers have Laptops, NetBooks, smart phones and numerous other portable gadgets. Cables are just not the in thing.  Telstra is happy to give up the fixed equipment it has knowing the future is wireless technology. With 4G offering real life speeds at around 70Mbit it will do everything the NBN can do but is totally portable. This is a huge win dump the old for the new at zero cost.

Sitting on the government side it has a politically positive spin. We actually did something that may work out. As this can not even go to Telstra shareholders any earlier than the middle of 2011 it may not even happen if the playing field changes. Telstra has the ability to back out – the government does not.

It also has a policy win in that as most of the internet traffic will be via the NBN, enforcemnt of internet filtering as a service access requirement to the NBN means they no longer need parliamentary approval. Big brother censorship is now going into place. They also have a secondary policy for recording of all internet usage (including instant messaging and email) for a period of upto 5 years in place and the NBN makes that 100% feasible.

Finally the consumer/taxpayer. The loser without a doubt. Having paid a premium to get an aging network and a new network that still ties them to a cable they have paid a lot for nothing. With the government now able to insist on internet filtering (censorship)  they again lose out. By the time the NBN is fully operational it will be so far behind new technologies it will become a white elephant.

I always say – If private enterprise will not do it because there is no money in it you can be sure there will be three times the loss when the government does it. Welcome to your newest nightmare – the NBN.

The National Funding Authority which was to oversee  state funding authorities and ultinately local hospital networks has been dropped. According to a spokesperson for health minister Nicola Roxon, the government would still have the national fund and adequate oversight of federal health money allocations.

Hello – think BER buildings (The school hall fiasco) overseen by the states that has seen at least 30% blatently scimmed off the top by said state governments. Here we go again.

This like a good Laurel and Hardy comedy can be summed up as “That’s another fine mess you’ve got us into again Kevie”

Lets look at the subject of conviction. For weeks we have heard from the master himself that 40% is the number but today we hear a yodel that sees 20% as the new target. Amazingly the 40% number is not the contentious issue but rather several other points such as

• Super tax at only a 6% return on investment
• Non inclusion of finance cost and depreciation in the cost structure
• Exclusion of current projects.

Lets be real. Would you invest in a share that returned just 6% per year over the long term? I think not and the realistic figure would be closer to 12-15%. You would expect that all costs be removed from your dividends first, not here is a $1 dividend but we have to deduct other costs of 95cents in the dollar.

 How would you like it if you bought a house and suddenly the government said we will tax the capital gain regardless of your cost of improvements, financing and grant you no more than a 6% annual reduction. You would scream your head off and never buy another house again.

This is what this plan does to the mining industry and in turn your investments in these companies and in turn your returns to your super fund if this tax goes ahead.

KRudd still argues that the taxpayer can not suffer a loss. He is right the taxpayer can not but the individual (all individuals) will. With lowered returns on direct investment and much lower returns to super funds.

Lets look at his claims of benefits for taxpayers on superannuation and small business. For a small business a reasonable profit might be $150,000 per year. At a 2% reduction in company tax (from 30 to 28%) that is a saving of $3,000. That same business needs to find another 3% in super contribution say for 5 employees averaging $40,000 in wages each. That amounts to $6,000. That’s a loss of $3,000 for the business.

Now here is the nasty bit. Remember the nice $3,000 the government gave back to the business? Well the government gets 15% of the contribution. So the extra $6,000 the employer pays to your super the government gets $900. So really the government has handed out the $2,100, the employees get $1,200 each but the business loses $3,000 overall.

Ah but it gets better. Now the company wants to distribute 50% of the post tax money to the owners. Undoubtedly they have other earnings. That extra 2% of untaxed profit now has an affect on the income tax of the owners. If they are all on the second highest tax bracket (38%) this “reduction” means that the extra tax burden they have on the dividends is $171. If they are all on the highest bracket (45%) their added tax burden is $321.

Again while the government talks of all Australian getting a benefit the only real winner is the government itself. The maths do not add up. For small business it now has to think of the consequences of staying open and employing these 5 people or just investing in cash and saving the headache. For the 5 employees who have no spare cash they may just may be named YOU.

“This entire debate has been out there through the public documents released by the treasury on where the overall direction of tax reform was going,” he said.

“Back on the 2nd of May 2008 the government announced it would be having this review into the tax system. On the 6th of August 2008 a discussion paper was released on the tax review entitled the Architecture of Australia’s Tax and Transfer System.

“That discussion paper raised the inefficiencies of royalties and pointed to a profits-based tax. It says these royalties can discourage high risk investments … it said a resource rent tax does not apply until the firm has earned above normal profits.”

Yep now lets look at the real facts.

• As stated it “pointed to” – not there would be one and definitely one at the level proposed just prior to the budget
• It stated  “…. it said a resource rent tax does not apply until the firm has earned above normal profits” Now interesting here us this proposed tax could this see the state levies being wiped out without any return to the losing states because abnormal profits would be wiped out and hence no collections for the states. A nice way to take tax collections away from the states and into the hands of the federal government.
• KRudd and Swan have made it clear that nothing would happen till the Henry report was released. The report is in and until this doozie not seen by anyone so NO DISCUSSION could have been in play prior to the announcement as no one knew what was in the Henry report.
• The Henry report NEVER suggested a tax at this level

He continued to say……………..

“As of the week that’s just gone past, consultation and negotiation continues with our major mining companies. Some of those companies are a long way down the path towards agreement, others are still some distance away.”

None of the majors are there. Why because it’s a fool’s tax bad for them and bad for the country. The only people on board at the moment are the government and companies that can take benefit from the proposed 40% underwriting on losses.

In all this not the massive silence from Gillard. She is smart enough to say “I stand behind Kevin Rudd” BUT not once has she without reservation supported this tax. Why? Simply put, it’s a loser and she knows it and while not planning to take the PMship she will will take it gladly and then drop the tax as a non supporter.  By staying away from the debate she is free to drop it, change it or if it suits pursue it.

The simple fact is KRUDD needs this tax to attempt a balancing of the books. Without it, the deficit in 2012-2013 would be $2Billion and in the following year 2013-2014 this deficit would increase to $4.4Billion. (See the budget figures). In plain words deficits would again continue to increase with KRudd in power.

With the gift of Federal Government debt of $150Billion (previously zero) and an annual interest bill of $9billion KRudd’s legacy to Australia in under 3 years is a debt situation that if you are 25 you will see with some luck payback by the time you are 45 but more likely 55. This is the man screwing up your retirement. 

and he thinks we are the idiots………………….

While a number of the parlimentary Labor party stated they stand behind him (as KRudd I would be scared about their positioning) it has been the union movement that has stood along side him. With the only alternative a severe leftist in Gillard many in the union movement and some of the largest unions are worried. KRudd as a neutral within the total faction system of the ALP is preferred by many. Even the left who see him as a voice of unity. Unfortunately he is a lame duck as of now as to avoid a spill he would have relequished most of his powers.

The real question everyone needs to ask is…..Who is running the ALP and hence the government. My guess that as of the long weekend it was without doubt the union movement. Within a week, their proxy Julia Gillard will take over with the backing of the left leaning unions and some of the right particularly in NSW, Vic and SA.

It’s back to the 60′s for all of us…………………..

KRudd is the second Queenslander to become Prime Minister as head of the Labor party. The first was Andrew Fisher in 1910.  Fisher’s 1910 government was a one termer. There the similarities end. Fisher reformed the original Federal government in ways we still feel today and without question to our betterment. The original laws from Australia’s birth in 1901 were flawed and needed it. He did it.

KRudd can not lay claim to doing anything of note other than racking up the largest federal debt in this country’s history and in record time. The second worse was the Hawke/Keating period which accumulated Federal debt at the rate of $6.5Billion per year ( $13.8 billion in 2010 equivalant terms). KRudd and Swan have racked up an amazing $54Billion per year and rising.

For nearly 3 years Rudd has plundered the financial well being of the country, has failed to deliver on nearly everything he promised during 2007 and has now created the most secretive government in Australia’s history.  It is a government that is forging the way for complete and total domination of the people by the state.

With plans to censor what you see on the net, plans to record everything you do, see and receive (including emails) for years on the net and finally to force the sale of private telecommunications infrastructure in to a new national network. A network to cost $40Billion and one that ties you to cables when nearly all of us rely on mobile devices such as Notebooks and netbooks, mobile phones, iPods and now slate devices such as the new iPad.  Just for tying us to the past he deserves this sole and only term.

But wait there’s more. Now in another of his “well planned” idiotic ideas lets super tax mining companies. What amazes me is that the 2 largest day to day gougers of the general public that make super profits (large retail and the banks) go scot free. Everyday millions are taken directly out of your pockets by these institutions and not a word from the government.

Banks have increased their margins on home loans, credit cards, personal loans and small business loans to levels not seen in over 40 years. Bank margins on credit cards have increased by nearly 100% and on home loans by 40%. Small business loan margins have risen between 50 and a staggering 120% over the last 3 years. He has watched the majors wipe out secondary debt markets. Yet there has not been a single attempt to curb this behaviour by KRudd.

He has back flipped on 90% of the promises he has made. He has sold our financial future down the drain and created massive divisions within society. If we take him at word that “the buck stops with him” then he should be made to draw his final pay cheque from the Australian people and consigned to history.

Some of the miners are making large profits out of resources and on paper KRudd’s comment of  “Over the last decade the mining companies generated $80 billion in higher profits. At the same time governments on behalf of the people received only an additional $9 billion,”  is not the full truth by any distance.

First of all before I go into detail lets look at KRudd’s history on Howard government spending from 2000 thru to 2007.  According to Rudd, Swan and their fellow puppets the Howard government wasted the previous boom by haphazardly giving away 94 per cent of all the windfall tax revenues as they came along. This helped overheat the economy, driving up inflation and interest rates. Now if that is true they gave away about $8billion dollars over 10 years. Yeah right it was more like $15billion per year in tax cuts and especially child rearing benefits.

BHP is huge with operations in Australia and overseas. Over the last 10 years it has paid $25billion in income taxes and state resource taxes. On top of this, through it’s direct employment in Australia has collected income taxes on employee earnings in excess of  $20billion dollars. However it does not end there. It has paid out in excess of $20billion in dividends of which about $8billion has finished up in the hands of Australian superannuation firms for the benefit of all Australians. It pays to remember that the higher earning Australians who got dividends may have paid up to another 15c in the dollar tax on those dividends.

So over a ten year period BHP alone has put into the Australian economy through income tax on profits, income tax collection, dividend payments, resource taxes and GST on final consumption (plus others) over $100billion.  Australia’s economy is around $1trillion per annum at the moment. Over the last 10 years it has adds up to $8,800Billion. Now the industry (not just BHP) contributed over $1,300billion during that period. What would happen if activity dropped by just 10%? would this amount to a $13billion loss per year. Actually because of the flow on affect it would amount to around $15billion a year. Think about it. Every cent KRudd claims to be clawing back and then some will be gone each and every year.

What will be the loss to the government revenue stream if companies such as BHP no longer repatriate money back from foreign earnings to Australia? What is the loss to your superannuation funds from reduced dividend payments to your superannuation fund manager and ultimately to you? What happens when BHP and others decided to develop mines elsewhere under friendlier  tax regimes? What happens when your job disappears in the future as mines are no longer upgraded and or developed? It’s not just miners that go but every part of Australian society that gets their spending.

Remember Gough Whitlam? He tried the same and the results where disastrous and it took 20 years of both Labor and Liberal governments to roll back the damage. This is socialism at it’s worst. Results mean penalties so why try to succeed. It has failed everywhere – every time.

Look through the policy and see the following

• The government is only returning 70% of the grab
• There is no guarantee (as he talks in absolute dollars not a percentage) that the workers share of the windfall will ever increase.
• Once again he is bailing out his state buddies with funds for infrastructure that they are already getting under the GST but wasting.
• Out of this the biggest share is going into general revenues – only 25% is going in to superannuation.

Kevin Rudd is continuing with his lie about where the country is at.  The truth is Australia owes $1Trillion dollars to the world (equal to a whole year of Australian GDP) and can not afford to deny itself of any revenue. The problem is the disaster will not strike for 5-15 years as what we have winds down and is not replaced. By then Rudd will be gone but YOU will still be here to suffer the consequences.

1. The greatest back flip diver of all time or

2. A down right liar who would not the truth if it hit him with a foil wrapped pink batt.