The future of australian federation

I am becoming increasingly concerned about the disparate response/condition of the australian states with regards to Covid.

If Victoria is successful in eliminating covid again (and they are getting cases down at the moment), then it will be endemic in NSW and completely eliminated elsewhere.

Just today, Palletchook has completely closed the borders, shutting hotel quarantine for interstate refugees.

Let’s say that NSW gets 80% of its residents vaccinated, and the death rate carries on like it has in the UK or israel. We will still be seeing at least a dozen deaths per day, and plenty of hospital cases particularly in the winter months

Although as rational people we special few understand that really isn’t a huge deal, you can imagine that for the boomers and the doomers this will be completely unacceptable.

It is feasible that they continue to have their borders closed to NSW indefinitely

Now, in that situation which part of Australia would I rather live in?

NSW pros:

-can travel overseas

-can receive tourists (though I doubt many would come just to see one state – its a very long way to go)

-lockdowns may be infrequent

NSW cons:

-cant go anywhere else in australia

-mask mandates are likely to stay forever according to imbecilic Dr Chant

Rest of oz pros:

-don’t have to wear fucking masks

-no tourists

-can travel to all other states

Rest of oz cons:

-possible intermittent lockdowns

-can’t travel overseas

-economy likely to be absolute fucking disaster except for WA, given that no tourists can come

Now, with regards to economic factors.

WA doesnt really have to give a fuck at least for the moment, so we can forget about them

ALP governments in Victoria , SA and Qld have ALP governments, they may very well shut the door on migrants and “students” altogether. This would make those states great for young people as wage pressures would go up.

However one would have to imagine that it would be a very staglationary environment, as GDP will collapse without “students”, construction, tourism, rising real estate prices etc

The EZFKNSW will most definitely be hoovering in these same coolies and suppressing wages while building, building, building

We would then have a two speed economy – low (wage) inflation moderate “growth” in NSW, and high (wage) inflation deflation in the rest of the country ex-WA.
Probably with a lower AUD given the absolute chaos and division

Exactly how would the RBA and federal government handle this?

Certainly, the RBA wont be raising rates – that’s a given

The government redistributes more GST share to qld/vic/sa and supports them through lockdowns and decreased economic turnover?

Very unlikely while scomo is in power

Even federal labor probably has enough pressure from corporate donors to not want to reward the other states for continuing on the hermit path. However, imagine a scenario where the LNP is essentially only retaining support from NSW, while federal election voters in all other states punish them for trying to force the covid on them

This could get very fucking murky

Superimposed on this you may have changes in interstate migration – one can imagine that older boomers certainly wont want to stay in NSW where they risk dying (low risk but perceived as huge risk in their minds) and they will all flee interstate especially to QLD. Selling their huge real estate wealth in one place, and buying in another

All in all, this is an absolute shit show.

If victoria does lose control of the pandemic, its a slightly different story as NSW and VIC combined are more than half of the national population. But even then QLD and WA have the mineral wealth, and will probably attract all the boomers with their wealth.

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Anon

-economy likely to be absolute fucking disaster except for WA, given that no tourists can come

Tourism doesn’t really matter to the Aussie economy. Any damage is offset by people spending more on houses to live more comfortably while they can’t travel/do anything.

Ramjet

It does matter for employment especially for Cairns and Gold Coast. I think people could tolerate a year only going on domestic holidays within their state, but another two or three years, not a chance. Once the Sydneysiders are living it up in Bali, Phuket etc. do you really think people younger than 50 will be saying ‘I am not going overseas as I want to protect the boomers who are waiting for their Pfizer jab’?

Chinese Astroturfer

Indonesia and Thailand won’t be opening their borders to mass tourism for years to come. Who knows. 5, 10, 20 years.

Likewise, Australia is building dedicated quarantine facilities they aren’t planning to relax quarantine requirements for years to come.

UK had 16 COVID deaths this time last year, 170 yesterday.

Hospitals will be overflowing with COVID patients in another 1-2 months.

Last edited 1 month ago by Chinese Astroturfer
Ramjet

Bali was supposed to open to international tourists last month, but that has been delayed.

Quarantine facilities are being built and they are likely to be used for coolies and students. Do you really think that Scomo expanded Howard Springs and is building more quarantine just to bring back stranded Australians?

Ramjet

Victoria has a ponzi economy. More so than the rest of EZFKA. It has two options:

  1. stay closed and hope that Labor wins the federal election for more handouts
  2. follow NSW and learn to live with it in order kickstart the ponzi

By the way, rich old boomers selling up and moving to the resource states is probably a pro for NSW

bjw678

By the way, rich old boomers selling up and moving to the resource states is probably a pro for NSW

They certainly appear to come with more costs than benefits from a state government perspective.

DjenkA

It may be good for NSW in the long run if there is a black Swan to deal with the white elephant.

Freddy

With all the tricks they pulled last year to get house prices rising I am sure they could think of more. How about abolishing land taxes so that the rental yield becomes sufficient to live in Queensland without needing to sell up in NSW.

Peachy

With all the tricks they pulled last year to get house prices rising I am sure they could think of more.

for sure.

How about abolishing land taxes so that the rental yield becomes sufficient to live in Queensland without needing to sell up in NSW.

this is an important dynamic and there doesn’t need to be land tax changes, necessarily.

to my knowledge this is already happening – people who have been moving (more regional/rural or interstate (including to QLD)) have not been selling their existing residence.

Freddy

The rule in NSW is exemption only on PPOR. If you rent you will have to pay.

A $2m house in NSW would rent for around $1000 pw. A nice 2-bedder house or apartment in Gold Coast around $600 pw. The $400 change would be enough to cover incomes taxes etc. You couldn’t do it relying on the pension as you would fail the asset test. Doable if retiring off superannuation.

bjw678

That isn’t how land tax in NSW works, a 2 mill house is maybe 1.2 mill land value, the first 750k of which is exempt even if not ppor.
https://www.revenue.nsw.gov.au/taxes-duties-levies-royalties/land-tax

Last edited 1 month ago by bjw678
Freddy

I don’t recall describing how it works. Just that it needed to be paid.

Boomer home would be an older brick family home 10km-15km from city centre. Land value would be 70-75% of the sale price.

bjw678

Most of a typical home is already exempt. All of quite a lot.

Freddy

You are trying to make out as if land tax is insignificant. My retired uncle has two IPs, earned enough rental income to cover land taxes, council rates, etc, and still retire comfortably. Then came all the ridiculous house price rises relative to income which pushed up his land taxes a lot faster than his rental income. Earns $65k in rent, pays $35k in land taxes, add in council rates, etc, and he is left earning less than the pension.

As an aside, I told him to sell one of his IPs and he gave me the standard Boomer dirty look. Selling assets not an option.

emusplatt

you’re correct, so changes must be made to forestall this.

https://www.greaterfool.ca/
“We will introduce a tax-free First Home Savings Account to help young Canadians afford a downpayment, faster. Combining the features of both an RRSP and a TFSA, this plan will allow Canadians under 40 to save up to $40,000 towards their first home, and to withdraw it tax-free to put towards their first home purchase with no requirement to repay it.
This would allow young Canadians to set aside 100% of every dollar they earn, up to $40,000 toward the most important investment they will make in their life. If the funds are not used for a home purchase by the age of 40, they convert back to normal RRSP savings.”

Peachy

Hehe $40k. It’s literally nothing. But, directionally, it is price-supportive because it is a price subsidy.

also, we already have this in EZFKA in the form of First Home Super Saver (or similar), which I think is capped at $50k.

emusplatt

must have moar!!!

emusplatt

$40k is perfectly acceptable for a 2% deposit
[nudge nudge]

Peachy

This is interesting musing, coming.

in a sense what you describe is kind of a steroided-up version of the situation that the federation always had. Namely that all states share monetary policy and broader economic settings, even though Tassie (say) has little in common with WA.

there are parallels with the EU, where they obviously have extremes like Germany and Greece. But whereas the EU doesn’t have fiscal union, EZFKA does, so the issues should not be as severe. EZFKA fed government CAN redistribute benefits between states.

But the redistribution would need to look quite different in the world you describe compared to how it was in the past. There is also obviously a significant political dimension to this….

DjenkA

Unda presha, things will ease off.
I saw no evidence that units in ezfka would rebel and protest with some effect, I am still pessimistic albeit a bit less. Pending truckie fight for freedom, I stand to correct 2 viewpoints:
1. There is a rebelling force in Aus to be reconed with
2. Truckies are not just a bunch of fat fried frozen eating units that drug themselves into profits and have a cumulative IQ equivalent to a PE teacher

robert2013

Melbourne and Sydney are ponzi economies. If they keep bringing people to keep the ponzi going and others are not, it’ll become a serious budget issue. The ponzi is financed by receipts from export states. Sooner or later they’ll start calling it out. Then the fun really begins.

Ramjet

I would have thought that too with the ponzi running into budget constraints and resource constraints, but it kept going until Covid. Whilst 70%+ don’t want mass immigration, the elites and the wokes are singing from the same song sheet. Anyone who dares criticise immigration is a racist xenophobic redneck. The wokes firmly believe this and the elites it benefits them financially. The best example was Turnball trying to reform the 457 visas. SHY was shouting about how racist it was and in the end the reform was giving the visa a new number. No one in government is going to call it out. Australia will go bankrupt before it does anything about the ponzi. The fun will be watching economic units complain that the welfare state is disappearing and not entirely realising why.

Peachy

The fun will be watching economic units complain that the welfare state is disappearing and not entirely realising why.

yeah, this will be good.

also, I’m looking forward to everyone getting eaten alive by inflation and being confused:

  • first by official denials of it
  • second (when it is acknowledged) why this great and wonderful thing that the RBA spent years trying to create … feels so shit!
The90kwbeast

Is there any ability to overturn lockdowns as unconstitutional when there is increasingly poor evidence to support them? So e.g. QLD locks down, shuts border with NSW even with 80% vax rate, surely there are going to be powerful people challenging this in the high court eventually.

Clive Palmer failed last year, probably rightly so. But any state premier that locks borders and doesn’t play the game once vaccination rates are over is going to be very hot water both politically and legally.

I therefore remain more sanguine about things, but I do express my frustrations at the very lofty vax % targets.

Last edited 1 month ago by The90kwbeast
emusplatt

fatty mcfuckhead fucked this right up ..the states now have a HC ruling allowing quarantined focussed border closures. a ruling that fucks with free trade/movement between states that didn’t exist before faeces face idiocy.

now the states might argue that the borders are open with certain quarantine provisions to be observed??

The90kwbeast

My understanding was the high court supported the governments decision based on the state of play last year with no vaccine etc.

Hard to see McGowan for instance holding onto the same dogma by say Mar next year in the face of intense federal political pressure, probably state opposition pressure, and for anyone determined cases being taken to the supreme or high court.

Peachy

I reckon mcgowan will do
1) McGowan (mostly)
2) WA (a little bit)

the rest of ezfka can take a hike and stay east of the border.

I doubt that much political pressure can actually be exerted on him.

Stewie

As well as showing just how big a role mass migration has had in suppressing wages over the past 15 years, the reaction to COVID is showing just how dysfunctional our Federation is becoming. God help us if we ever had a pandemic of the likes that we see at the movies instead of the bat sniffles that 99.9% of us without any comorbidities and who are under the age of 50, could expect to survive.