The Government continues to be in polling trouble.
The national accounts are out today and it is possible they will show the income side to have two successive quarters of negative growth. ( They do see HERE)This is because the terms of trade are falling and affecting national income.At present Real GDP and Nominal GDP are increasing at the same rate! The Kouk is unimpressed.
MYEFO ( Greg Jericho has a good article on this )is out in a few weeks and will show the deficit blowing out. As I said on Monday this is of no consequence. One does not institute tighter fiscal policy simply because the economy is weaker than expected. ( See Bill Mitchell)To some extent Hockey is being hoisted on his own petard. When this occurred under Wayne Swan he said it was rubbery assumptions ( although no-one in the markets thought that) and excessive spending. He now looks completely stupid when explaining the same situation.
He is going to look really stupid when projections show deficits for a long time. This is why people think they were lied to. If the problem was spending then the answer is pretty simple. If the problem is not spending then there is nothing worse that an electorate that believes they were wood-ducked
I think UNLESS the $A depreciates to a 'normal' level (say 75c) then the present government is toast.
The electorate have already made up their mind they have instituted or want to institute unfair measures.
They will only 'forget' this if the economy improves and gets back to trend nominal GDP growth levels.
I do not think the government has any idea of this at all. Just like the previous government!
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