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Australia faces a "massive hit to government revenues" that "will inevitably continue to impact...

Australia faces a "massive hit to government revenues" that "will inevitably continue to impact beyond the current year," says Treasurer Wayne Swan. The deficit increased a further A$4.6B ($4.8B) in the first four weeks of 2013 - above Swan's February estimate of A$2B - taking the total shortfall for the first seven months of the fiscal year to A$26.8B.
Comments (45)
  • It's time to go after Aussie Dollar.


    When high school dropouts earn $100k+ as miners, you know a bubble is forming up.
    17 Mar 2013, 08:37 AM Reply Like
  • yep especially considering the high cost of mining there is growing forcing some producers to reconsider their strategies.
    17 Mar 2013, 09:55 AM Reply Like
  • Why not raise the carbon tax which has done so much to help the country?
    Why is this a surprise to anyone?
    17 Mar 2013, 08:52 AM Reply Like
  • "When high school dropouts earn $100k+ as miners"
    That's nothing here in U.S. with a high school diploma you can get jobs in high tech making $100K. No experience needed.
    How about that?
    17 Mar 2013, 09:26 AM Reply Like
  • Mike that may be true in certain scenarios in the US but it isn't universal.


    In australia it's pretty much universal in the mining community, high pay that is with little to no experience/training.
    17 Mar 2013, 09:54 AM Reply Like
  • This is BS. Show an example of this please. Used to be true during the dot com days. Not true anymore.
    17 Mar 2013, 10:14 AM Reply Like
  • Would help if you could provide examples
    17 Mar 2013, 11:36 AM Reply Like
  • mike, u are dreaming! That is a very rare exception. Stop BSing...
    17 Mar 2013, 08:32 PM Reply Like
  • Might we see another Cyprus brewing here??
    17 Mar 2013, 11:01 AM Reply Like
  • unsurenow
    Just wait till the idea is floated in the good old USA.
    17 Mar 2013, 11:02 AM Reply Like
  • Yes, withdraw all your money now and sew it into a mattress.


    The biggest problem in the U.S. is the growing legion of folks that believe this kind of nonsense and, therefore, make terrible investment decisions. Then, the future arrives; they're old and broke, and they will expect all the people who behaved rationally to "share" their success and support them. After all, it's only "fair."
    17 Mar 2013, 11:11 AM Reply Like
  • Cyprus is nonsense huh?? Okey dokey...
    17 Mar 2013, 11:14 AM Reply Like
  • UN:


    "Cyprus brewing here??...."


    Obviously, you cannot differentiate between the U.S. and Cyprus. We probably risk being just like Zimbabwe, too, right?


    17 Mar 2013, 11:17 AM Reply Like
  • Tack, people who behaved rationally are already bailing out the irresponsible. That's what Obama's "spreading the wealth around" is all about. It's also the logic behind the bank bailouts and the Fed's financial repression programs.


    It doesn't take long for the folks who are getting poked by these programs to wonder what other tricks are up the sleeves of our nation's leadership. Cyprus is a first chink in what is typically considered a very unlikely scenario. And, one must not ignore the rather frightening ideas coming out of our more liberal representatives and senators for the government to access the wealth stored away in IRA's and 401k's.
    17 Mar 2013, 11:40 AM Reply Like
  • TACK


    Nope, not here yet, But Europe ? Let's see what this weeks brings..


    Obviously you just think the USA is untouchable..It isn't !!


    This can either be an isolated case or a snowball that picks up steam..You bet your way, i will play my hand the way i see fit. I might not have many posts but i am not ignorant..


    Ignorance are people who say "not in the US"...
    17 Mar 2013, 11:42 AM Reply Like
  • LAKE


    Some people will never change their thinking. They have been molded that way for years and just don't accept or want to believe something out of the ordinary is possible.


    I stopped trying to educate those types years ago when gold was at $300 an ounce!!


    Once they start comparing past history it is a fruitless endevour. Then they turn to insults to make their point. I just sit back and laugh!!
    17 Mar 2013, 12:05 PM Reply Like
  • tack


    I really don't think the others posters here today are advocating "withdraw all your money now and sew it into a mattress".


    You are always the optimist and that is fine. I wonder if you were also the same in 1999 and 2008.


    Just don't belittle others who have a note of caution. If you think outlandish ideas like is currently happening in Cyprus could never happen here, then you are simply being naive (no insult intended).
    17 Mar 2013, 12:15 PM Reply Like
  • wyo:


    I am nearly 64 years of age and have invested for a very long time, through all kinds of environments. Doomsayers, and those who prepare for the same, constantly citing some new development (e.g., Y2K, Mayan calendar, housing collapse, Euro collapse, Cyprus, stagflation, runaway inflation, looming default, etc.) just perpetually screw themselves. They point to 2000 or 2008 and say, "see!"


    Most of these people are so afraid of calamity around every corner that they're never invested, or jumping in and out willy-nilly. Even most of those that claim they'll plunge in after a major pullback are blowing smoke because when those major pullbacks arrive, they'll be breathlessly claiming that, "this is it," the market will fall another 50% or never recover. Paralyzing anxiety is an endemic condition for some.


    Regarding 2000 and 2008, the answer isn't to flee in horror, it's to have adjusted portfolios that perform better in down environments (e.g., more debt, less equity) and to keep harvesting yield. Then, after a panic ensues, one alters the mix back more heavily toward equities. As as high-yield investor, I maintain a portfolio that always throws off in excess of 8% yield. I'd suggest you do a compounded return calculation for thirteen years at 8%, and this doesn't even include making huge capital gains on securities bought in the troughs.


    Having a steady hand and calm reallocation of portfolios will make mincemeat of market timers and those who make panicky judgments.


    For what it's worth, presently, I doubt we're at any market top because the U.S. economy is still expanding at a nice pace and, more importantly, massive amounts of capital reside outside equities (e.g., Treasuries, bonds, gold, cash) due to the combined effects of QE coupled with perpetual anxiety that exists in present markets. The consequence of this will be buying support for any market dips. Sustained large sell-offs occur when liquidity for buying is exhausted, not when there are oceans of it.
    17 Mar 2013, 12:34 PM Reply Like
  • tack


    As usual your comments are thoughtful and I agree with most.


    However, you failed to address my point above. That's OK.


    Have a brew today and enjoy St. Patrick's Day and tomorrow it is back to the markets.
    17 Mar 2013, 12:43 PM Reply Like
  • wyo:


    My father's family can be traced back to Edinburgh, Scotland, and my mother is Italian (Lido di Camaiore), but I'll have a beer, anyway.


    Enjoy the day.
    17 Mar 2013, 12:49 PM Reply Like
  • TACK


    Just understand that when I talk about precious metals it is just a % of my portfolio..Anyone 100% invested is really just making a bad bet.


    Please just don't assume that i don't also have a diversified portfolio. I adjust mine as well...But i do believe that BB has inflated stock prices, and that precious metals will still advance further..


    That's my approach as i don't think the US is infallible, nor do i think were Africa either..As long as BB continues his steroids into the market we might still go higher, but i think a correction is in the cards right now.imo
    17 Mar 2013, 01:29 PM Reply Like
  • @Tack:


    I cannot argue with many of your sensible points on investing. However, investors that buy high and sell low are more idiotic than those who don't invest at all, or who invest in hard assets not directly linked to electronic exchanged traded markets. Moreover, QE is a perpetual illusion, one that provides a euphoria that kills "deep value investing" at its core. If you believe in QE and that it is required to sustain our markets and our business cycles, then you are as misguided as those that make foolish investment decisions. Finally, what are you going to do when the markets actually do decline again? Will you take gains on your investments that have run up substantially, or will you let it melt away to someone else that took those gains, and then even perhaps sit on losses for awhile? I'm not talking about day trading here, I'm talking about 'cyclical' allocation and taking money off the table when markets or individual names become significantly overbought and there is a significant profit sitting there to be taken and reallocated.
    17 Mar 2013, 01:58 PM Reply Like
  • White:


    "Having a steady hand and calm reallocation of portfolios will make mincemeat of market timers and those who make panicky judgments."


    Didn't I just say the foregoing?


    I am perpetually making reallocations in the portfolio, as issues rise, reducing their yields below my threshold. When markets get toppy, there are a paucity of new candidates that meet my hurdles rate, so, then, money gets increasing allocated to preferred shares and debt issues until such time as new better-yielding (i.e., lower priced) issues materialize. This disciplined approach is self correcting.


    There have been folks harping about QE since its inception and claiming it's "phony." But, it isn't phony; it's very real and those who ignored it have paid dearly. At the same time, most people have loittle understanding that QE mostly finds its way into excess reserves, so that it's not out there buying stocks and creating massive inflation. As the economy recovers further, QE will dissipated, replaced by growing bank lending and gradually rising rates. There isn't going to be any end-of-QE "moment," when QE suddenly stops, and the economy collapses, although I am sure the doom meisters and short traders will do yeoman work to convince the impressionable otherwise.
    17 Mar 2013, 02:12 PM Reply Like
  • QE leads to asset price inflation. There is more than ample evidence of that. To deny it, and to make excuses for QE as a necessary measure to sustain our markets and business cycles is a claim to a foolish dependency. QE kills "deep value investing" at its core. QED
    17 Mar 2013, 02:29 PM Reply Like
  • It will be very interesting to see if the markets blow off the Cyprus situation. The average sheeple's bank account takes up to a ten percent "tax" and the bankers go merrily along as if nothing happened. Wow.


    If this passes in Cyprus don't you think this will set a precedent and other PIGS countries could be forced into some like "tax"?


    The citizenry is not going to take this crap well and the bankers will see one hell of a run on them.


    I wonder why they choose Cuprus, such a small country, to implement this? As if we didn't know.
    17 Mar 2013, 02:29 PM Reply Like
  • TACK


    Sorry but i disagree about QE'S not having any bearing on the markets. Once the FOMC minutes were released a few months ago and a" hint" was dropped that QE might end sooner than anticipated the markets sold off immediately.


    So your point about it not being important is incorrect imo. I have ridden the wave the past few years but i have jumped off the bus now...I might be a few months early but i rather be then a day too late!!


    I am not a trader like you, so i value my profits when i make them..Once you posted a days worth of trades and my hat is off to you. I tried that years ago and didn't do so well. I like my dividend plays and my commodities right now..
    17 Mar 2013, 02:32 PM Reply Like
  • White:


    I've been a deep-value investor for decades. Value investing is about relative value, not absolute value. Those that insist on measuring absolute (i.e, "real") value are defeated before they commence. There is no such thing as "real" value in a fiat-based, discretionarily expandable currency.


    Inflation is a fact of life. It's been going on perpetually. An investor's assignment is to maximize one's nominal gains and, hopefully, exceed the market performance and the rate of inflation. But, no investor can do anything about inflation directly, so it's pointless to measure performance in yesterday's dollars, or those of ten years ago, or the last century.


    Successful investing is about playing the cards on the table, not philosophizing about whether they should be there.
    17 Mar 2013, 02:45 PM Reply Like
  • "The markets" meaning USA?
    On a Monday like this, would you rather "flee" to
    Shanghai, CAC or NYSE?
    This might launch "markets" in the USA higher.
    17 Mar 2013, 10:44 PM Reply Like
  • You know i am not even going to post that, but i am prepping for that day for years now...The writing has been on the wall for a while, sheeple just don't see it !!
    17 Mar 2013, 11:06 AM Reply Like
  • Wayne Swan, meet Black Swan: Cyprus
    17 Mar 2013, 12:09 PM Reply Like
  • Almost everyone in Australia has known post GFC that commodity prices would be under pressure for some years and that would affect Australian Government revenues because of reduced taxation. In fact, commodity prices have held up much better than most expected.


    Therefore, the Australian budget has earned more revenue than most commentators expected, even though Wayne Swan pretends that post GFC revenues are less than what might reasonably have been expected.


    Mr. Swan's remarks now are belated acknowledgement that his budget was never going to balance - now that his pretence that it would balance has been laid bare for all to see.
    His remarks are an attempt to pretend that revenues were hurt by unexpectedly low revenues post GFC, so as to hide the consequences of the Labor Government's reckless and poorly targetted spending.
    17 Mar 2013, 04:33 PM Reply Like
  • Aussie currency and markets have been surging with this as a backdrop. sure seems like an overblown headline...i have been following as a headline of the flooding issues out in Western Australia. Rather striking since i thought the entire region was desert. anywho this number seems laughably small relative to the USA, Europe, Great Britain and Japan. insoluble?
    17 Mar 2013, 04:35 PM Reply Like
  • hey tack; have you gotten any real money in these markets??


    or just a few shekels to keep you busy between tee times?


    try shorting WBK at 160 to get a taste of where the aussies are going
    18 Mar 2013, 12:03 AM Reply Like
  • chase:


    Think of my investment style as a huge lava flow, slowly engulfing things in its path. It never makes sudden or startling moves, just keep rolling along inexorably.


    I can sum up the strategy in a few simple bullets:


    -- Buy undervalued, deeply-discounted issues, always with substantial yields
    -- Sell puts against increased volatility on selected issues, when opportunity arises
    -- Sell revalued issues when prices have increased and yields drop below my target tolerance level, then redeploy funds
    -- Alter overall allocations between equity, preferred and debt, depending on economy
    -- No shorting
    -- No market timing
    18 Mar 2013, 10:52 AM Reply Like
  • tack
    Do you ever tire of patting yourself on the back.
    Really it is boring to read.
    18 Mar 2013, 12:07 PM Reply Like
  • wyo:


    How is offering what has been a long-time, very successful strategy to SA readers patting myself on my back? I responded to thechaser's question in the manner I thought appropriate. Perhaps, I should whine about politics and "banskters," as so many waste time and space doing here?


    You needn't read a single post of mine and can ignore any and all advice. I won't be offended.
    18 Mar 2013, 12:17 PM Reply Like
  • tack
    It's just that you do so repeatedly.
    18 Mar 2013, 12:32 PM Reply Like
  • wyo:


    SA has a lot of slow learners. :-)


    You may ignore me, repeatedly.
    18 Mar 2013, 12:43 PM Reply Like
  • tack
    Until you post audited statements verifying your fabulous track record I'll assume you are exaggerating your so called fabulous returns and simply patting yourself on the back.
    Your bragging is exceeded only by your hubris.
    18 Mar 2013, 02:08 PM Reply Like
  • wyo:


    Why don't you stick to commenting on subject matter, rather than on me? That's the typical approach, attack the messenger to discredit them, if you don't like what they say. I have offered my strategy numerous times, including specific recommendations, and answered innumerable personal e-mails from those who might gain from its use.


    I've been comfortably retired since I was 49 (now 63) and living rather well from my investments. If you wish to believe it's all poppycock, please engage in whatever approach toots your horn. Or, maybe, you only wish to relate to folks who are doing poorly. Maybe, that's the shoe that fits better.
    18 Mar 2013, 02:56 PM Reply Like
  • TACK


    I am happy that financially you could retire at 49..I wish i could have, however it is you 1% people who don't feel the pinch regular families are going through.


    So you and i see things from a different angle...However if you don't find what they are doing in Cyprus a huge potential problem then nothing i can say will wake you up..
    18 Mar 2013, 03:02 PM Reply Like
  • Unsure:


    As I suggested in posts last evening, from an investment perspective --what SA is supposed to be about -- who looks wiser, those who panicked out in the pre-market or at the open, or those who looked for buying opportunities?


    One must separate political concerns and emotionalism from investment decisions, or one will not make money, or worse.


    P.S. People retire, or not, as the result of the decisions they make throughout life, in education, jobs, savings, borrowings, investments, etc. It doesn't drop out of the sky unless you're born wealthy. I certainly wasn't. That's why it's vital to start making wise decisions early.
    18 Mar 2013, 03:18 PM Reply Like
  • TACK


    I have no reason to not believe you. I also invest in discounted stocks but not as well as you have. Congrads as what you did is everyone's dream..To be independently wealthy is a nice position to be in..


    I have posted more than once that i hope ALL make money here..My concern is maybe more political right now, as i do have a concern what is going on in Cyprus...Time will tell..
    18 Mar 2013, 03:23 PM Reply Like
  • Tack:


    Ignore the naysayers. I appreciate your insight, as I'm sure many others do.
    18 Mar 2013, 09:52 PM Reply Like
  • In the U.S. if we had the Aussie deficit we would pat ourselves on the back and call it a balanced budget.
    18 Mar 2013, 10:43 AM Reply Like
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