One sure way to know voters are fed up with the economy is when politicians are thrown out on their asses en masse. That is exactly what happened down under as Australia PM surprised by Labor rout in state election.
Australian Prime Minister Julia Gillard said on Monday she was surprised at the scale of her ruling Labor party’s defeat in state elections, widely seen as a dire warning for her fragile government.
Labor, which has ruled for 20 of the past 22 years in northern Queensland, suffered an unprecedented rout at weekend elections, taking so few seats that its official party status in the state is under threat.
When Labor came to power nationally in 2007 it also controlled all the state parliaments, but since then the four major east and west coast states have fallen to the Liberals, complicating passage of its policies and reforms.
After the Queensland vote, Labor is expected to have just seven seats in the state to the conservative Liberal National Party’s 78.
The Labor Party is aptly named but US readers need to be aware that the strangely named Liberal National Party has a conservative connotation.
Compounding the irony, the World Socialist Web bemoans the alleged “pro-business” program of the Labor Party. You cannot make this stuff up.
Small Firms Struggle With Bills
Australian businesses are going to crash and burn as a result of Labor initiatives and a property bubble headed for a “big flush”.
The Australian reports Small Firms Struggle With Bills.
MORE than a quarter of small to medium-sized firms face going under because they are unable to pay their tax bills and outgoings, the latest survey by Bibby Financial Services says.
The study found that 26 per cent of firms struggled to pay their bills to suppliers, while 24 per cent faced an uphill task meeting their tax payments.
Only 30 per cent of firms said they intended to invest in their business, down from 33 per cent the previous year.
About 40 per cent of firms said managing cashflow, staffing issues, dealing with red tape and tax administration were among the biggest headaches they faced.
The cashflow problems were heightened with almost half of the firms experiencing delays in payment and 27 per cent had to deal with bad debts in the past year.
“Not surprisingly, many remain pessimistic about their future payment terms. Over a third (36 per cent) expect the length of time they must wait to be paid will increase further in the coming quarter,” BFS managing director Greg Charlwood said.
Bank of Queensland Halted, Hit By Surge in Real Estate Losses
THE Bank of Queensland (BoQ) has been hit by a surge in residential and commercial property loans striking trouble, prompting the board to order a $450 million capital raising to shore up the regional bank’s balance sheet.
The stock was put in a trading halt today as BoQ’s chief executive Stuart Grimshaw revealed that the bank would record a $91 million after-tax loss for the first half of 2012. The statutory loss follows a $222m normalised underlying profit for the period.
The Party is Over
Turn out the lights, the party is over. Australia is headed for one hell of a hangover in the wake of residential and commercial real estate busts. Retailers will be especially hard hit as consumers throw in the towel on spending and store owners struggle to keep up with absurd labor costs and excessive lease payments or property taxes.
Bloodbath On the Way
No one should be surprised by the election rout or the problems of store owners. On March 4th I stated Australia Services Index Plunges to Significant Contraction; Bleakest of Views From Retail Shops; Retail and Housing Bloodbath Coming Up
Retail prices in Australia are absurd. A 5% reduction in prices is hardly a bargain. As for the notion mining will carry the economy, forget about it. Commodity prices are going to plunge, and besides, commodities are not a big driver of jobs anyway.
There is no “floor” under retail. The bottom is going to fall out, and unemployment is going to soar. In turn, rising unemployment will clobber Australia’s already deep-in-trouble housing sector.
As for small shops, they are completely doomed. Store owners with little leeway on wages will not get the income they need to pay taxes, interest, utilities, and rent.
Expect an across the board retail and housing bloodbath because one is coming.
Mike “Mish” Shedlock
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