Australian economy

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Re: Australian economy

Postby HBS Guy » 06 Jun 2015, 21:44

A rare link to the national shit sheet:

http://www.theaustralian.com.au/arts/re ... 7383454997

Review of a book of the post war reconstruction and nation building in the 40s: Curtin, Chifley, Red Ted Theodore, Nugget Coombs, Menzies.

Might be interesting to borrow the book from the library:
Australia’s Boldest Experiment: War and Reconstruction in the 1940s

By Stuart Macintyre

NewSouth, 596pp, $34.99
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Re: Australian economy

Postby HBS Guy » 06 Jun 2015, 22:05

Ha! Article blaming Peter Costello for our Budgetary problems now:

http://www.canberratimes.com.au/comment ... hhah3.html

Confirms my thesis here: viewtopic.php?f=4&t=3015

However, the article doesn’t go far enough. Costello and the other idiot, John Howard, fanned a boom with their endless tax cuts and pork and crap decisions like the capital gains tax concessions and the superannuations changes—these will soon cost us $50Bn/year.

This boom bust with the GFC, leaving people highly indebted, negative equities on their homes, credit card bills as long as your arm. How are these going to spend to drive demand in the economy? Soon the Sydney housing bubble will deflate—if it bursts the economy is going to sink like a stone!

Aren’t Libs wonderful economic managers? NOT!
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Re: Australian economy

Postby HBS Guy » 07 Jun 2015, 19:14

More damage the evil TPP will do, to cultural/arts bodies etc:

http://arstechnica.co.uk/tech-policy/20 ... overnment/
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Re: Australian economy

Postby HBS Guy » 09 Jun 2015, 08:03

This is the sort of manufacturing businesses/business people we need—note use of advanced technology not prayer:

http://www.brw.com.au/p/tech-gadgets/bu ... ign=buffer
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Re: Australian economy

Postby HBS Guy » 09 Jun 2015, 13:30

What we need to do to entice high-tech R&D and manufacturing here:

http://www.smh.com.au/business/comment- ... hiw4q.html

The shambles by killing the NBN have killed more than they know. The denigration of science by this mob is not helping either, nor is trying to pump up the dying coal industry, underfunding education and spending way too much on chaplains in school, religious education in public school instead of civics, economics etc.
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Re: Australian economy

Postby HBS Guy » 16 Jun 2015, 11:08

Tax expenditures 2015/16.

Tax expenditures: tax revenue foregone, tax concessions, not a payment.

From the Budget Papers:

Large positive tax expenditures
E6 Capital gains tax main residence exemption — discount component 25,500 n/a
E5 Capital gains tax main residence exemption 20,500 n/a
C3 Concessional taxation of employer superannuation contributions 16,300 15,550
C6 Concessional taxation of superannuation entity earnings 13,400 11,750
H28 GST — Food 6,400 6,300
E11 Capital gains tax discount for individuals and trusts 5,800 n/a
H16 GST — Education 3,950 3,550
H2 GST — Financial supplies - input taxed treatment 3,550 3,550
H19 GST — Health - medical and health services 3,550 3,500
C5 Concessional taxation of non-superannuation termination benefits 2,700 2,700
A38 Exemption of Family Tax Benefit payments 2,220 2,220
B73 Statutory effective life caps 1,945 n/a
B14 Exemption from interest withholding tax on certain securities 1,860 1,310
A19 Medicare levy exemption for residents with taxable income below the
low-income thresholds
1,710 n/a
A17 Exemption of the Private Health Insurance Rebate 1,570 n/a
D10 Exemption for public and not-for-profit hospitals and public
ambulance services
1,400 n/a
D14 Exemption for public benevolent institutions (excluding public and
not-for-profit hospitals)
1,360 n/a
F8 Concessional rate of excise levied on aviation gasoline and aviation
turbine fuel
1,230 n/a
H20 GST — Health - residential care, community care and other care
services
1,110 n/a
A54 Philanthropy — deduction for gifts to deductible gift recipients 1,100 n/a
H5 GST — Child care services 1,090 n/a
B80 Research and development — non-refundable tax offset 1,070 n/a
H6 GST — Water, sewerage and drainage 1,050 n/a
B75 Capital works expenditure deduction 960 n/a
H3 GST — Financial supplies - reduced input tax credits 900 n/a


Let us look at some in detail:
E6 Capital gains tax main residence exemption — discount component 25,500 n/a
E5 Capital gains tax main residence exemption 20,500 n/a

You do have large increases in the price of a house—should these be capital gains taxed? Nope—these increases are due to inflation, sometimes gentrification of an area. These were not done by the home owner and so were not done in the way of trade.

C3 Concessional taxation of employer superannuation contributions 16,300 15,550
C6 Concessional taxation of superannuation entity earnings 13,400 11,750

These are ripe for cutting! Cutting these would yield $15,550m + $11, 750m = $27,300m or $27.3Bn more money in the Budget (the difference between $16,300 and $15,550 is that $16,300 is what the tax expenditure costs, $15,550 is the net gain by the abolition of the tax expenditure which assumes alternative tax dodging avenues will be used.

E11 Capital gains tax discount for individuals and trusts 5,800
Nearly $6Bn of revenue given away.

$33.1Bn of savings so far.

C5 Concessional taxation of non-superannuation termination benefits 2,700 2,700

Do away with that and $35.8 in savings. There is about $4Bn lost to Negative Gearing, so nearly $40Bn of tax expenditures that could go—the Budget would soon be balanced!

A17 Exemption of the Private Health Insurance Rebate 1,570
This is loss of revenue that does not benefit public health, remove it completely (Swan/Gillard had this means tested) because the govt only has responsibility for the public health and $37.37Bn in savings to the Budget. There is also the diesel fuel rebate that could go.

Was inspired to post this by a column by Peter Martin:
http://www.smh.com.au/comment/tax-expen ... 615-ghnuxy
Australia's 25 biggest tax expenditures cost between them $122.2 billion, around one quarter of the Commonwealth budget. The International Monetary Fund says we spend more on them than the USA, more than Britain, more than Greece, more than Italy - more than any of the 16 nations it examined. The Treasury tots them up each year in a Tax Expenditures Statement few people read.

The biggest go to the family home, then to super, the GST and charities. A government genuinely concerned about getting value for money and balancing its budget would impose sunset clauses on the lot then review them portfolio by portfolio over a period of (say) five years. Those that aren't axed it should consider turning into visible grants.


I disagree with some of what Peter recommends there, like I said capital gains on a home might be gains from inflation over a long time: if you want to tax these capital gains should the home owners be able to claim depreciation and maintenance over the time they lived in there? Definitely only the “real” gain should be taxed, i.e. the purchase price should be turned into what that price would have been in todays dollars. That is complicated and does not account for improvements—an additional room or a large garage built, elaborate landscaping etc. With all the emotional issues around the family home this is definitely an area to leave alone.
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Re: Australian economy

Postby HBS Guy » 16 Jun 2015, 23:04

STUPID Greens—or conniving Greens?

The Greens sucked in Again !
Scrott has agreed to LOOK at Super tax concessions in return for their support for pension changes. How dumb can they be !

http://www.abc.net.au/news/2015-06-16/s ... es/6551044


http://pbxmastragics.com/2015/06/14/abb ... ent-196443
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Re: Australian economy

Postby HBS Guy » 17 Jun 2015, 20:57

Heh, Greens agreed to a deal to cut pensions for about 300K pensioners now and 1m or so in next 5-10 years as 60 & 55yo retire at 65.

They are all going “Oh, Greens made a mistake” blah blah on Twitter. I have been making myself Mr Popular saying “No, Greens happy. 300K pensioners lose but Green inner city professional base don’t lose lucrative super and NG tax exemptions.” VERY popular I was, think converting a few Green idiots to actually using their brain.
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Re: Australian economy

Postby HBS Guy » 23 Jun 2015, 07:13

To avoid our cities grinding to a halt more road/rail needs to be built. Because of property prices it is cheaper to dig tunnels, e.g. for a metro, than to buy properties:

Alan Robertson, owner of Brisbane-based engineering firm Ausrocks, and an acknowledged expert on tunnelling, says the cost of excavation is now about one tenth of the total cost of a tunnel in Australia.

A tunnel boring machine that installs the lining behind it about $100,000 per metre of tunnel, according to Robertson. The cost of a fully installed tunnel, however, is now about $1 million per metre, he says.

The difference? Planning approvals and red tape, including necessary fire and safety regulations.

Even so, he says it’s now cheaper, at $1m per metre, to build a new railway or road underground in Sydney than it is to buy the land and do it on the surface.

And in fact for many of the rail and road links needed to cut congestion in both Sydney and Melbourne, land was not set aside, so using it for transport would be impossible anyway.

Funding the projects should not be a problem either. The only reason it is seen as a blockage, such that all discussion on the subject centres on 'users pays' models, is also because of political dysfunction.

Two months ago Morgan Stanley’s Australian economist, Daniel Blake, published a report in which he said Australia could borrow $80 billion for infrastructure without jeopardising its AAA credit rating.

He called the report 'The Missing Fiscal Link' and concluded that without a big fiscal stimulus focused on infrastructure to support failing monetary policy, Australia’s economic growth would not rise to the levels predicted by the government, and the level needed to get unemployment down.

Said Blake: “Fortunately, debt markets are wide open for both federal and state governments. Yields on Commonwealth Government securities are the lowest on record, and we expect sustained global demand for AAA-rated assets. As a result, while funding through the ‘Asset Recycling Initiative’ has been impaired by politics, we see opportunity through CGS debt.”


http://www.businessspectator.com.au/art ... astructure

Again, the real NBN could have helped reduce traffic by making telecommuting possible (it is not possible with ADSL/VDSL, just not enough UPload bandwidth for one, not enough total bandwidth, not reliable enough, too much contention etc.)

But debt should be used to fund these major gridlock–busting infrastructure projects. User–pays is not going to cut it. This dysfunctional—idiotic would be a better word—government is the main roadblock to progress!

Note the “ economic growth would not rise to . . . the level needed to get unemployment down” meaning that unemployment would stay high and rise with time. So we urgently need to ditch the current batch of idiots! We need a major infrastructure program to create jobs directly as well as boost productivity to provide jobs into the future and we have the cheapest interest rate for a long time to finance it!

I have used the metro in London, Paris and Rome. Fast and efficient. I have talked before, using Adelaide because that is where I live, of roads leading to the CBDs being inadequate, 19thC size. Too expensive to buy land to expand the roads so tunneling is the cheapest option.

I think the current model of car ownership and commuting is coming to an end, driverless cars are going to greatly change travel and commuting. To take advantage of the faster, denser use of the roads that driverless cars offer pedestrian walkways and biketracks will need to be above or below ground level.

(With driverless cars the computer inside each car will work out when it can make a right hand turn across lanes of traffic so there are no lights at major intersections any more. Modelling of the new travel paradigm looks amazing, cars moving along at high speed, making turns when they can with lots of near collisions but never a collision. No human drivers can match it.
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Re: Australian economy

Postby HBS Guy » 23 Jun 2015, 11:49

More Federation Green paper crap:

The states would lose up to $18 billion a year in Commonwealth support for public hospitals and be left to fund and operate the system by themselves, under one option prepared by the Prime Minister’s department as part of the Federation reform process.

The leaked proposal brings into play the prospect of the states having to raise the GST or find another funding source by accepting that the “ongoing financial durability of this option is likely to be challenged” unless the states could fid the money by cutting back on hospital admissions and addressing shortfalls in primary care.


http://www.afr.com/news/politics/leaked ... 001?stb=fb

Obviously—offload everything to the States, declare a surplus, pay BIG taxcuts to the richest people—and watch the country go down the gurgler. The Greens will be a willing participant in this—to play to their inner city, professionals base.

But they have stuffed the economy and threatening the education of kids and buggering up the retirement of retirees will rile the people like few other things will. As well, the economy will be a happy hunting ground for Labor with static wages and growing unemployment.
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Re: Australian economy

Postby HBS Guy » 26 Jun 2015, 19:35

If the interest rates rise or there is another financial shock somewhere Australian households are going to be in all sorts of trouble! High debt, most wealth in form of property and banks borrowing heavily overseas to finance real estate purchases.

If it happens while abbott is PM and hokey is Treasurer then Dog bless Australia and all who sail in her!
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Re: Australian economy

Postby HBS Guy » 26 Jun 2015, 21:35

Some simple common sense from Albo on public transport:

http://www.theguardian.com/commentisfre ... nst-trains

We need investing in rail, public transport and so on. All a road does is get congested in not all that much time.
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Re: Australian economy

Postby HBS Guy » 26 Jun 2015, 21:46

The fuck who signed the disastrous China FTA will waive skills assessment—including for electricians!

Image

Nice! Deaths by electrocutions, buildings falling down etc!
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Re: Australian economy

Postby HBS Guy » 27 Jun 2015, 11:54

Decreasing rental returns and a slowly growing vacancy rate a sigh the property boom is about over?

http://www.smh.com.au/business/the-econ ... 626-ghxkdr

When it goes it will go with a crash, an exponential crash! That will totally bugger up the economy and the Budget. Pray to the deity of your choice it does not happen when this clueless Lib shambles is in office! They will have NO idea how to cope! They clearly don’t know now—all that debt and deficit rhetoric gone and they are rapidly increasing both.
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Re: Australian economy

Postby HBS Guy » 29 Jun 2015, 11:29

Government spending overall is contractionary with the states reducing their spend more than the Feds are increasing theirs at the same time as the mining construction boom is collapsing. We need a big infrastructure program funded by debt:

"The planned pace of [budgetary] consolidation nationally (Commonwealth and states combined) ... is somewhat more frontloaded than desirable, given the weakness of the economy, the size and uncertainty around the resource boom transition and the possible limits to monetary policy," the statement says.

"Increasing public investment (financed by more borrowing rather than offsetting measures) would support aggregate demand [GDP] and ensure against downside risks." Hint, hint.

"It would also employ [construction] resources released by the mining sector, catalyse private investment, boost productivity, take advantage of record-low borrowing rates, and maintain the government's net worth." Oh, that's all.

"Indeed, IMF research suggests that economies like Australia – with an output gap [spare production capacity], accommodative monetary policy and fiscal space – benefit most from debt-financed infrastructure investment, with the growth boost largely containing the impact on the (low) debt-to-GDP ratio."


http://www.smh.com.au/business/comment- ... 628-ghz7ut
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Re: Australian economy

Postby HBS Guy » 01 Jul 2015, 08:43

A new report has argued that state and federal governments would have saved $2 billion annually over the past four decades had they educated private school students in the public school system.

"The reality is that increased public recurrent investment in non-government schools between 1973 and 2012 has increased the overall costs to governments rather than producing overall savings," the report's authors Lyndsay Connors and Jim McMorrow said.


http://www.smh.com.au/national/educatio ... 630-gi0pwt

Nice to see some facts—we have always felt private schools cost the taxpayer more for very little extra educational benefit.

The authors found that:
independent schools had a disproportionately high expenditure on capital facilities, grounds and buildings.

It also found the relatively wealthier intake of students into the non-government sector had the effect of leaving government schools with an increasing share of students with higher needs and extra costs.


Private schools do intensive coaching to get their students to do well in exams. When the coaching stops and the pampered darlings go to work or University some cannot stand on their own two feet. Glad to flight to private schools has stopped.
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Re: Australian economy

Postby HBS Guy » 02 Jul 2015, 09:47

Burning issues for 2015/16:

http://www.afr.com/brand/chanticleer/en ... al_twitter

The burning issues for investors in the 2016 financial year are bound to include the end of "free money" in the United States and the pace of economic growth in China.

Most market pundits expect the free money to end in September when the US Federal Reserve lifts official interest rates by 25 basis points to 0.50 per cent. That move is almost certain to mark the beginning of a lengthy interest rate tightening cycle.


China, emerging markets all get a guernsey.
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Re: Australian economy

Postby HBS Guy » 02 Jul 2015, 10:23

Big Pharma using the same tax dodges as Big Tech:

http://www.smh.com.au/federal-politics/ ... i2fnz.html

We cannot get our house in order until this situation is fixed. I still say deeming is the way to go—if companies object—show the ATO their books and pay tax on the revenue disclosed! These cunt are laughing at us and bludging on PAYE taxpayers! You do business in Australia you pay tax on what you earn in Australia and if the ATO Commissioner has to deem your profit and tax due then so be it! They will still do business here!
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Re: Australian economy

Postby HBS Guy » 02 Jul 2015, 10:39

Wow, Grattan Institute comes out swinging:

Australia's most respected public policy institute has savaged the Abbott government's approach to crafting federal budgets, warning Australia's economic future is being based on "hope" instead of real policy reform.

The Grattan Institute is calling on the federal government to seriously consider increasing tax collections if it wants to repair the budget and prevent future generations from being saddled with too much debt.

It also wants Treasury to change the way it produces its economic forecasts, saying Treasury's erroneous modelling has led successive federal governments — Labor and Liberal — to believe that budget surpluses are just on the horizon, with dire consequences for voters.

In a blistering new paper, Grattan Institute director John Daley says Treasury officials ought to admit that their forecasting projections must change, warning that every time governments' assumptions about revenue growth and spending restraint prove too optimistic it is leading to bigger budget deficits, with the financial burden falling on younger households.


http://www.smh.com.au/federal-politics/ ... i2ly9.html

“[E]conomic future is being based on "hope"” is what happens when you elect a bunch of the dregs of the Howard govt, led by Howard’s worst Cabinet Minister, incapable of writing or arguing Cabinet submissions, into government.

“Debt and deficit” was never real, it was something to use to scare voters to vote for the bunch of rejects. But there are real problems and they are not being addressed: education, health going to suffer huge cuts, R&D non-existent, the ill–considered FTAs going to hugely increase unemployment and so on. Eventually, if these weaknesses are not going to be adressed we will be in emergency, including a dent and deficit emergency.

It is so weak—monkey goes on a tour and announces new infrastructure projects. Oops, I mean, reannounces Labor projects. We need to spend $80Bn on infrastructure, including health and especially education!

A first world country is being run like a 3rd world country in Medieval times!

The GI proposes four reforms:
It says its four proposed reforms — reducing superannuation tax concessions, broadening the goods and services tax (GST), changing capital gains tax and negative gearing, and introducing a broad-based property levy — will "all materially increase government revenue" with "limited collateral damage" to the economy and the most vulnerable.


Super, CGT & NG I agree with—just look back over this thread.

Broadening GST—I have grave fears if the shambles were to attempt this. Swan should have done this, and increased it to 15% (keeping the extra 5% for the commonwealth) while OVER compensating those on lowest incomes, increasing NewStart by $50/week MINIMUM. The shambles increase the GST and we KNOW those on the poorest incomes will not get enough compensation.

I mean, calling for the GST to be increased now is STUPID! We have the largest cohort ever moving to retirement, overwhelmingly on full or part pension (thanks partly to Howard not increasing award super) and this cohort retiring on insufficient income due to GST increase (increase rate and/or broadening base) is going to depress economic activity for three–four decades!

A broad based property levy. Say what? More and more people have to rent (until the property bubble collapses any way) so you are going to slug renters, or pensioners living in their own home more money? fuck off! Plenty other ways to raise money, just look at the multinationals ripping us off blind!

[Former Treasury Secretary Parkinsson] said Australia's "trend' economic growth rate may be lower in the future — around 2.75 per cent or 3 per cent — making it harder to collect the tax revenue needed to close the budget deficit.

The International Monetary Fund warned last week that Australia's actual long-run growth rate could be even lower — around 2.5 per cent — putting the spotlight on the Abbott government's budget repair challenge.


2.5% long term growth is a recipe for increasing unemployment even if the shambles had not signed the disastrous FTAs! Look for real unemployment to grow, fast!

All of this is bookkeeping, not economic management! Government actions have consequences!

"But there do appear to have been structural shifts in the global economy in the last seven years ... and if the IMF is telling you that the trend rate of growth is lower across the developed world and has been before the GFC, you might want to have a look at the wiring in the model."


Yeah, and the shambles has made the wiring critically dangerous!


The Guardian’s take:
http://www.theguardian.com/australia-ne ... oncessions

The new paper also points out that even if the government manages to get all its 2015 budget savings measures through the parliament, commonwealth spending will remain a larger share of the economy than at any point between 2003 and 2008.


Liberals are profigate spenders, wastrels. And again—getting all the measures through will result in lower demand, loss of confidence leading to less economic activity, less tax revenue.

It also points out a crunch is looming with state budgets because the Abbott government is no longer guaranteeing to contribute to growth in real spending per person in health and education from 2017-18.

Health and education comprise nearly half of state government expenditures.


We have seen in the first post made today—education really can lift people out of desperation to become trained, well to do people starting businesses and so increasing employment and tax revenue. Real low level thinking, say that of a monkey or regious fundy, to cut education expenditure.

Love this comment to the Guardian article:
Unfortunately, the leading think-tank [Grattan Institute] is not in government ...

... the leading don't-think-tank is! [Lib/IPA]
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Re: Australian economy

Postby HBS Guy » 05 Jul 2015, 12:21

Too, too delicious! China turns back a ship of coal! To Newcastle!

http://theaimn.com/china-sends-coal-back-to-newcastle/
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Re: Australian economy

Postby HBS Guy » 05 Jul 2015, 12:49

Image

Aust. Guardian.
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Re: Australian economy

Postby HBS Guy » 06 Jul 2015, 21:27

From a tweet by Swanny:

The collapse of infrastructure spending under the shambles:

Image

From an article by Greg Jericho: http://t.co/Oqd0B6rweu

This is why we are in recession! As mining construction falls off, non mining investment in infrastructure is NOT replacing it.

Makes me wonder: the high, the very spending the shambles are doing—where the hell is it going?
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Re: Australian economy

Postby HBS Guy » 07 Jul 2015, 17:11

Long but good article on economics and politics and econospeak etc:

http://www.themonthly.com.au/issue/2015 ... treasurers

Clowns and Treasurers :jump
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Re: Australian economy

Postby HBS Guy » 10 Jul 2015, 10:05

Another multi-billion hit to the budget for Hockey to manage as iron ore prices fall even further:

http://www.smh.com.au/federal-politics/ ... i8cmn.html
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Re: Australian economy

Postby HBS Guy » 22 Jul 2015, 14:48

Deflation just took a step nearer: Inflation for Jun quarter was .7%, or 1.5% annualised, 1.7% had been expected.

Doubt the fools on the RBA board will cut tho, the $A is headed for 50¢US territory, further proof Libs can’t manage the economy. Might even be some rate increases when the $A plunges. Don’t begrudge farmers any windfall profits on the way down but the $A belongs at 75–77¢US. Much below that and imports become very expensive, not good.

Last time—also under a Lib govt—the $A was in 47¢US territory farmers had a bumper wheat crop while other wheat growing areas didn’t do so well. They made sooo much money they were paying off their mortgages and buying new gear etc.
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