3
Jun
2014

Bad Polling Continues – and economy seems weak

As expected, the Coalition polling continues to be bad and, despite minor errors by ministers in publicly explaining budget measures,  there is no sign that any publication will emerge explaining the underlying rationale of reducing expenditure. Worse, Turnbull has emerged as a mischief maker whose antics will attract publicity and make the selling job that much harder. The story in today’s Herald Sun (below) that he was walking with a rather “wet” senior Liberal Party official to an “impromptu” dinner with Palmer and “happened” to run into Treasury Secretary Parkinson seems rather thin, to say the least. Turnbull’s extravagant critical reactions to Bolt signal that, while he recognises he is not an alternative leader, this will not stop him playing the fiddle.

Questions are also arising about the strength of the economy. Following a sharp fall in residential building approvals, a fall in inventories in the first quarter and today only another small increase in retail turnover, the first quarter’s GDP figures out tomorrow could signal a downward revision in forecasts.

Meantime, Obama has announced new measures to reduce the use of coal in producing US electricity and is filtering out a message that his legacy will be to leave behind policies which are reducing emissions (see below). The exact effect of this remains to be seen: it is reported that power stations have already reduced emissions by increasing the use of cheap gas, but gas still exudes CO2. However, if it is correct that Obama is going to make climate change an issue, that will make more difficult the negotiations at forthcoming international conferences and more difficult also for Australia to reduce the expensive use of alternative energy sources.

Ironically, these measures by Obama for (supposedly) reducing the risk of dangerous warming follow a fall of 1% in real US GDP (seasonally adjusted) in the first quarter due in part to the extremely cold weather in parts of the US.