#defencebudget

Sheepishly downloading the COVIDSafe app is a warning for all of us

NSA raises significant concern to Government abattoir proposal ...

We have no problem with people individually choosing to sign up to the COVIDSafe application launched yesterday. After all, it is voluntary and we believe in personal freedom. However, we are perplexed why so many people feel compelled to post their newfound compliance on social media feeds. It is this blind obedience that worries us.

It is hard to see such self-promotion on social media as anything more than the same virtue-signalling mindset of those who drape their social media avatars with the flag of the country where innocent people were slain by terrorists. Comments such as “I’m doing my bit” reign supreme. Why do people so sheepishly comply to sign up to this when the data is seriously unconvincing to warrant its introduction? Should we report our friends who haven’t publicly declared their status? Admitting one has signed up to COVIDSafe is borderline accepting to become a slave.

The most important point people need to consider is that there is absolutely zero downside for the government during and after this crisis. Remember that number – ZERO. If the economy goes into a prolonged recession or depression, our politicians can simply play the “we did it to save lives” card and tell us it was all for our own good. They can claim they couldn’t have done anything else. Unfortunately, we bear all the risk no matter what the outcome. That is a bad equation in any language. Why would anyone willingly sign up to it?

Indeed, saving lives should be congratulated, not censured. Still, at what point will we realise that the draconian measures put in place are leaving a disproportionate drag on the economy? As we wrote yesterday, if we take the JobKeeper support package alone, it presently costs $1.5 billion per death. Or $19.5 million per infection. The $130bn JobKeeper program is almost as much as the annual federal expenditure on education, healthcare and defence spend combined, three of the four largest budget items. Is this sustainable? If we stay in lockdown beyond the date of the package, this universal income will undoubtedly be extended.

There is a snowball’s chance in hell that we will have a V-shaped recovery. Our central bank might send us comforting lies to maintain the illusion that they are competent but it simply won’t happen.

Our authorities have suggested that the domestic economy comprises 75% of GDP which will provide a great cushion but on what planet do they believe that a crushed export sector which employs so many can be airbrushed to give us a V? Double-digit unemployment, at levels double or treble the present figures will all but guarantee a slower recovery. With household debt exceeding 180% of GDP, any future spending will be directed at rebuilding the balance sheet, not consumption. We’ll be lucky to get an L!!

There will be no normality after COVID19 abates. So much of our domestic future will be driven by the rest of the world’s approach to their own economies. Our neighbours will undoubtedly pursue more nationalist policies which prioritise domestic production. They will also need to contend with the likely aggressive reset of their own relative risk weighting, currency and fiscal positions. For anyone to believe that the magic pixie dust sprinkled by Canberra will avoid any calamity is dangerously naive.

Australia faces a $1 trillion deficit. Await the raft of new taxes on housing, inheritance and income to pay for it. We will absolutely hate what is coming. The sad thing is that we could have taken the pain over a decade ago yet we put short term expediency ahead of rational principle and now await the consequences. We are reaping what we sowed.

Much of the reasoning given by Aussies to sign up has been this belief that it will accelerate the government’s ability to reopen the economy sooner. If the government requires this sort of overlaying safeguard on top of the 99.98% of Australians that don’t knowingly carry the coronavirus or the 99.9997% who haven’t died from it, we should worry about our lawmakers’ ability to manage risk. Seriously.

Why are governments using future hard dates to consider reopening the economy? If today is the best day to do so, why wait till May 30th? Our own experience is that people are broadly respecting the social distancing guidelines. Sure, some might hang out in a park to break the monotony of staying indoors, but we are falling for the taglines from the government to #StayHome a bit too literally. The government should be rebuilding confidence. It isn’t. This app is unlikely to do much given the law of already minuscule numbers. It is all a feel-good measure.

With more than one million COVIDSafe app downloads in the first hour, many have proven that we are willing to conform to guidelines at a moments notice without considering the underlying facts. We saw this during the bushfire season. People blindly donated millions to the rural fire services when we proved their administrative skills were so severely lacking that these monies would unlikely be spent wisely.

In closing, many citizens have sent a wonderful signal to the government that they can easily strip more freedoms away by using panic as a tool to achieve it. The longer the economy is left to rot, the easier it will be to drown obedient plebs in even more regulations and restrictions because we failed to stand up and question the methodology. We will continue to do so. After all, former US President Ronald Reagan once said,

“The nine most terrifying words in the English language are: I’m from the Government, and I’m here to help.”

NATO Facts and why Macron’s arrogance is no better than Trump’s

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While social media splashes around a US contribution to total NATO spend of 73% it in reality is a third of that. Only the USA and UK spend over and above NATO commitments as outlined in the chart above. Even the Greeks meet half the requirement! Germany is below not only NATO guidelines but the media would never tell you that. Trump has a point. In fact the reason much of the military spending numbers below the requirement stems more from inefficiency than anything else.

What many fail to understand is that salaries and benefits (housing, education and healthcare) for military staff tend to consume 3/4s of the budget. Procurement is a dog’s breakfast and influenced by age of fleets, battalions, interoperability and so forth. While NATO isn’t exactly group buy the us wins by default of having access to the best cost/performance equipment allowing better bang for the buck. Little Estonia can’t get the same economies of scale.

The “contribution” (click here) question is clouded by two things. Under Obama, the US has cut its NATO contribution from 5.29% of GDP when he took office to 3.6%. NATO Europe had met the minimum expected contribution of 2% but this has slumped from the tech bubble collapse of 2000 to 1.47% today which has meant the only thing keeping NATO’s overall budget above target has been Uncle Sam!

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So once again social media muddles a message. It takes 10 seconds to go on NATO’s website and fact check.

Instead the media is more focused on pointless clickbait on whether Trump can hold Melania’s hand without being swatted away or who won the vigorous handshake contest – he or Macron. In fact Macron’s deliberate snub Of Trump when he met all the leaders spoke volumes. He made no conscious effort to shake his hand first. He made a point of sucking up to his EU cronies first and spent needless time making worthless chitchat before even acknowledging the leader of the strongest nation on earth. We shouldn’t be surprised. Best have Trump inside the tent p1ssing out than outside p1ssing in.

Even if they want to delegitimize Trump they play a silly game. Much like business leaders being bullied on social media to leave Trump’s business council (Uber chickened out), the EU plays a dangerous game of isolating Trump. If they want to prevent him from being the “unhinged” orange buffoon they think he is they’d do much better to be welcoming, accommodating and flattering his eminence. That way they can bring balance and find common ground. They show no signs of even beginning to try. By snubbing him they shouldn’t be surprised if he acts independently. Yet Macron acts no better than Trump and the media lavishes praise on the exact same antics they crucify The Donald over. Typical double standards.

Be careful what you wish for! The world needs a healthy US and stunts like this only fray the lines of trust and partnership further. Sure, the America First policy stance is affronting but if the EU want to expedite the process then keep up the Trump bashing. It doesn’t mean Trump bumping (hey Trudeau did it in Canada to a female member of parliament) other dignitaries shows good character but he knows he’s being ridiculed and the media sees it as their only form of attack. The problem is they forget 75% of Republicans STILL approve of his job performance. ┬áHe may only be doing a C+ on performance in office but he isn’t anywhere near the F- portrayed by the media.