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Speaker 1: Chris joy Well, straight talk again mate, It's a pretty

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Speaker 1: good timing, Like, how long in the country for about

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Speaker 1: a month? About a month. I'm glad I got hold

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Speaker 1: of you before you take off. Last week we met

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Speaker 1: for the budget. What would you say relative to what

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Speaker 1: you were predicting before the budget? Now post budget? What

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Speaker 1: do you think?

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Speaker 2: Well, I mean, for a couple of years and silling

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Speaker 2: with you, we've talked about the fact that Australia is

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Speaker 2: threatening itself with economic irrelevance and we're kind of trading

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Speaker 2: away our prosperity, our innovation, our ingenuity. And for several

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Speaker 2: years I've felt that the professional political class are coming

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Speaker 2: for the private sector. They see it as a zero

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Speaker 2: sum game. The guys that have spent their entire life

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Speaker 2: working in Canberra working for government have never started a business,

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Speaker 2: never risked capital, never hired a single soul from their

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Speaker 2: hippocket I've done. They just see those who are working

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Speaker 2: in small, medium and larger businesses as targets for wealth transfers.

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Speaker 2: So I've felt for a long time they're coming for

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Speaker 2: our income, our savings, our capital, and I just think

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Speaker 2: it's astonishing how brazen they were. I argued in my

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Speaker 2: AFI columns before the budget that this would be catastrophic

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Speaker 2: for labor. Everyone thought I was being alarmist. All my

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Speaker 2: journal mates said, no, no, no, mate. They've pulled the

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Speaker 2: but Jesus out of this body and it's going to

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Speaker 2: be wildly popular with the Wokes, the youth and so on.

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Speaker 2: And once the budget was released, I wrote that I

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Speaker 2: thought it was going to be cataclysmic for the country

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Speaker 2: and for the government, and so it's proven. Yeah, I

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Speaker 2: just think it's an absolute disaster. And you know you've

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Speaker 2: got under our be and easy. The bureaucracy since twenty

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Speaker 2: two in Australia, in the last few years alone has

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Speaker 2: increased twenty five percent. In the budget, they said, hey,

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Speaker 2: we're trying to save money from this monstrosity called the

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Speaker 2: NDIS that's now costing as much as Medicare, that is

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Speaker 2: just ridden with like absolutely rampant corruption. They're going to

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Speaker 2: save nineteen point eight billion dollars. How amazing over this

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Speaker 2: period of time, over the fourcast period of the budget.

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Speaker 2: But here's the rub. So they're taking nineteen point eight

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Speaker 2: billion from the NDS, which was this huge white elephant

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Speaker 2: that they created in the first place to feather they're

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Speaker 2: own nests and they're spending though another nineteen point six

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Speaker 2: billion on the public service on themselves, so they're taking

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Speaker 2: it from the NDIS and they're red just distributing back

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Speaker 2: to themselves.

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Speaker 1: So those people who are affected in the ndias, like actual

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Speaker 1: genuine people who need NDS assistance that for which they're

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Speaker 1: no longer going to have, if they're looking into where

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Speaker 1: that's gone gone to feathering the nests of the actual

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Speaker 1: government themselves.

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Speaker 2: See the only way they know how to make money

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Speaker 2: to tax and take from those who generate. And of

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Speaker 2: course this creates huge disincentives for anyone in Australia who

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Speaker 2: wants to establish a new product, a new service, a

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Speaker 2: new business. Why would you do it in this country

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Speaker 2: when you've got the world's highest capital gains tax rate.

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Speaker 2: You can go to any other country on the planet

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Speaker 2: and get a lower capital gains tax rate. So just unbelievable,

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Speaker 2: particularly as they promised relentlessly to not change capital gains

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Speaker 2: tax or negative growing pride of the budget. So I

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Speaker 2: think it was a bit of an epiphany for the community.

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Speaker 2: I think prior to this, you had Laby, you had teals,

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Speaker 2: you had the right and it was a complex kaleidoscope

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Speaker 2: of agendas, and it's like the budget was this one singular,

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Speaker 2: galvanizing moment where it all coalesced. You had this jigsaw

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Speaker 2: puzzle where the peace as were scattered and they all

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Speaker 2: came in to picture, and there was immense clarity for

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Speaker 2: the community that this is all about the public service

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Speaker 2: robbing from the public private service in order to bolster

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Speaker 2: their own wealth.

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Speaker 1: Is this what everyone was talking about when they talk

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Speaker 1: about a transfer of wealth from one sector to another sector.

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Speaker 1: In other words, I don't want to say tax the

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Speaker 1: rich because it actually applies to small business owners. To

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Speaker 1: tax one sector in order to bolster another sector, is

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Speaker 1: it a proper transfer of wealth.

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Speaker 2: We'll think about small businesses. You know, one in three,

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Speaker 2: one and two have a family trust. And the history

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Speaker 2: of this country, we have never taxed trusts. Yeah, and

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Speaker 2: then in one fell sweep thirty percent tax on all trusts. Well,

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Speaker 2: it's highest capital gains tax rate a state taxes. You

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Speaker 2: know they've already tried under this government to tax unrealized

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Speaker 2: capital gains. You'll get death taxes, you'll get more taxes

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Speaker 2: on super You'll get taxes on any form of success.

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Speaker 2: Because they see it as a target rich environment from

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Speaker 2: which they can tax and take to ultimately pay themselves,

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Speaker 2: and it's the only way they know how to make money.

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Speaker 1: Do you believe in the fact that it's going to

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Speaker 1: create a brain drain? I mean, do you think do

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Speaker 1: you think this will take the innovation out of Australia,

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Speaker 1: You know, the type that Malcolm Turnbill tried to encourage

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Speaker 1: when he talked about the Innovation Nation back in the

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Speaker 1: twenty sixteen seventeen eighteen period, that period whenever he was

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Speaker 1: a Prime minister. Do you think it actually people will

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Speaker 1: leave the country to take their innovative ideas to some

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Speaker 1: other lower tax environment or do you think people just

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Speaker 1: say stuff and I'm going to stay here and I'm

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Speaker 1: not going to bother. I'd rather stay on as a

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Speaker 1: lawyer or a bank or whatever the case may be.

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Speaker 1: I'm not going to go to these other areas. I've

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Speaker 1: got these really great ideas well.

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Speaker 2: I know loads of people who are doing exactly that.

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Speaker 2: So it's just a statement of fact that you're going

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Speaker 2: to discourage people from doing business in Australia, from investing

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Speaker 2: in Australia, from establishing any new opportunity in Australia, and

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Speaker 2: you can see this happening all over the world. It's

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Speaker 2: happening in the US in California and New York. They

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Speaker 2: did this dealth socialism, very similar playbook, just tax prosperity,

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Speaker 2: tax anyone who's had any success, and they created huge

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Speaker 2: disincentives to business and what a business and people do

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Speaker 2: They left where they're getting a huge exodus of people

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Speaker 2: and money out of California and New York into Florida

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Speaker 2: and Texas. So you'll get these alternative states that will

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Speaker 2: rise up in their stead and you're also seeing it

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Speaker 2: on a global basis. In Europe, the Italians stepped up

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Speaker 2: and said, okay, if you commit to paying a fixed

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Speaker 2: maximum number of tax each year, a few hundred thousand

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Speaker 2: dollars or euros, you can come here and we won't

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Speaker 2: tax any of your global income. So the Italians have

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Speaker 2: attracted in large numbers businesses and world class investors and

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Speaker 2: entrepreneurs that want to capitalize on that opportunity. Arbudawi did

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Speaker 2: the same thing. De Bay has done the same thing,

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Speaker 2: and so I think you're going to see more and

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Speaker 2: more challenger states who want to usurp the incumbents offer

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Speaker 2: extreme incentives in what is an increasingly competitive and mobile world.

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Speaker 2: We're becoming very mobile, very competitive, and ultimately this is

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Speaker 2: going to directly reduce Australian living standards, Australian incomes, Australian prosperity.

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Speaker 2: So I think it's a.

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Speaker 1: Bad policy call. Like I mean, is it a bad

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Speaker 1: policy call? So what I don't mean by that is

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Speaker 1: not bad policy for policy sake, but in terms of

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Speaker 1: prosperity for Australia, as you said, standard living, those sorts

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Speaker 1: of things. Do you think they've got the policy wrong

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Speaker 1: relative to Australians. And I don't want to be I'm

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Speaker 1: not being politically labor liberal whatever, just intellectually to build

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Speaker 1: a country, a great nation, of a really high living standard.

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Speaker 1: You know we can define that later, but highlight standarding.

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Speaker 1: We can basically afford to do whatever most of the

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Speaker 1: things we'd like to do, standard stuff for good stuff,

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Speaker 1: you know what I mean. Do you think that this

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Speaker 1: policy decision has been a major mistake then therefore for

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Speaker 1: Australia's nation building capacity.

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Speaker 2: A huge mistake. And you know it's a classic mistake

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Speaker 2: made by nations that have experienced a tremendous amount of success.

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Speaker 2: So Australia has been a very successful country. We've had

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Speaker 2: very high growth rates, we've got these huge natural endowments

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Speaker 2: of resources. We've had amongst the world's strongest population growth,

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Speaker 2: and now we're squandering that prosperity. It's called Dutch disease.

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Speaker 2: It's basically the moral hazard associated with having huge endowments

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Speaker 2: of good fortune, in our case, iron or coal, you know,

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Speaker 2: natural gas, uranium, et cetera, et cetera, plus a political

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Speaker 2: program to relentlessly import people from foreign countries. So we've

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Speaker 2: been dropping half a million people in Sydney and Melbourne

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Speaker 2: every year. We've had amongst the world's strongest population growth

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Speaker 2: threats increasingly because the politicians believe that people coming here

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Speaker 2: will have a higher propensity to vote for those who

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Speaker 2: brought them here. And so you know, it's actually a

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Speaker 2: political strategy in the same way that they ruled out

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Speaker 2: the pandemic that Dan Andrews playbook of just spending as

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Speaker 2: much money as humanly possible to buy votes, financially corrupt

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Speaker 2: voters and try to perpetuate their position of power. The

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Speaker 2: problem with that program of just reckless spending in perpetuity

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Speaker 2: is it eventually creates a huge amount of inflation. So

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Speaker 2: all of this immigration and all of this public spending,

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Speaker 2: it eventually bleeds into the cost of living, so it's

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Speaker 2: pushing up prices. View plant half a million people in

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Speaker 2: Sydney and Melbourne every year. There's only so many houses

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Speaker 2: and only so many services that can support that population

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Speaker 2: growth and supply chain, the chain, energy, electricity, everything, and

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Speaker 2: ultimately it just kind of precipitates higher prices. So as

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Speaker 2: people start to realize that there's a connection between crazy

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Speaker 2: amounts of public spending and population growth, and that drives

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Speaker 2: higher cost of living, high inflation, and then they see

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Speaker 2: interest rates start to rise, and then ultimately all this

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Speaker 2: debt needs to be serviced, and that manifests in the

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Speaker 2: form of higher taxes. With no willingness from the political

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Speaker 2: class in any way to consolidate their spending because that

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Speaker 2: directly impacts their own personal wealth because they're all sucking

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Speaker 2: on the tee to the tax path of these professional politicians.

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Speaker 2: So they've got no incentive whatsoever to balance their books.

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Speaker 2: They've only got an incentive to continuously spend. I mean,

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Speaker 2: the amazing thing about the budget, just to give you

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Speaker 2: the numbers, is this financial year FI twenty seven, they

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Speaker 2: claim the deficit is thirty two billion, that's what they

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Speaker 2: call the underlying cash deficit, but the actual deficit is

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Speaker 2: sixty four billion dollars. So at a time when the

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Speaker 2: reserve bank pustrate is aggressively lifting interest rates three times

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Speaker 2: from three point six percent to four point three five percent,

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Speaker 2: at a time where we have an inflation crisis in

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Speaker 2: this country, where we haven't hit the inflation target since

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Speaker 2: twenty twenty one, where inflation expectations are drifting higher, and

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Speaker 2: the battle against entrenched inflation is becoming tougher and tougher,

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Speaker 2: and it's going to likely warrant higher and higher interest rates.

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Speaker 2: The political class are pouring more fuel on the flames

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Speaker 2: because that's what serves their financial interests. The pay rise

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Speaker 2: is the constant wage inflation for the public sector, the

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Speaker 2: pet personal political projects, the NDAs. It was meant to

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Speaker 2: be twelve to thirteen billion a year, Suddenly it's fifty

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Speaker 2: five billion a year, and every man in their dog

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Speaker 2: is roughting it. So you get this vicious cycle, and

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Speaker 2: the only thing that can really stop it is high inflation,

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Speaker 2: high interest rates, and then a public reckoning when we

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Speaker 2: realize that actually we're squandering our prosperity. We're trying to

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Speaker 2: boost today by borrowing from the future, but ultimately that

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Speaker 2: money has to be repaid, and by allocating money really imprudently.

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Speaker 2: Today we're actually bidding up prices. We're pushing up the

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Speaker 2: price of everything, and it's not sustainable.

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Speaker 1: What did you think when you heard the treasurer talk

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Speaker 1: about the intergenerational inequality. By the way, it's not the

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Speaker 1: first time that terms ever been applied. I mean Costello

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Speaker 1: applied that in two thousand and five. I think the

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Speaker 1: same thing. But costello solution, by the way, was to

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Speaker 1: get rid of debt, national debt, public debt.

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Speaker 2: Well, here had an opportunity to because the government in

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Speaker 2: two thousand and seven was running budget surpluses rather than

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Speaker 2: a sixty four billion dollar deficit. They are actually printing cash,

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Speaker 2: they were actually spending less than the money they were receiving,

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Speaker 2: and Costello actually had a national conversation about the possibility

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Speaker 2: of completely repaying all government debt, whereas today they've wracked

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Speaker 2: up one point three trillion of new debt, not including

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Speaker 2: state debt. Correct. And the amazing thing is that you

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Speaker 2: mentioned the point about the political class running this propaganda

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Speaker 2: around intergenerational fairness and equity, But how is it fair

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Speaker 2: to borrow trillions of dollars from future restraints that haven't

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Speaker 2: been born today in order to spend that money on

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Speaker 2: the current generation. That's robbing the future to pay for

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Speaker 2: the present. That is demonstrably unfair, that's demonstrably inequitable, particularly

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Speaker 2: when there's no case for spending that money. I think

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Speaker 2: national debt per person in Circuit two thousand and seven

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Speaker 2: was around six thousand dollars to ten thousand dollars, and

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Speaker 2: today it's something like sixty thousand dollars. So it's not

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Speaker 2: fair in any way, shape or form. These guys are

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Speaker 2: just bullshiting because they ultimately just want to claim more

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Speaker 2: power by controlling more and more of the economy and

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Speaker 2: putting larger and larger parts of the economy under the

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Speaker 2: remit of the public service and paying themselves more money.

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Speaker 1: What do you think about the Treasury, And of course

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Speaker 1: Treasury supported all this stuff, for the Treasury being the

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Speaker 1: Department of Treasure has supposed to the Treasure's office. What

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Speaker 1: do we thinking about the Treasury forecast in terms of

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Speaker 1: the effects on house prices, which, by the way, so

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Speaker 1: far hasiturated to be correct. They said, house prices will

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Speaker 1: continue to risee but at a slow rate. In fact,

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Speaker 1: right now we're looking at house prices falling like falling

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Speaker 1: like a stone, and there's no pointing. I don't want

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Speaker 1: to sort of you know.

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Speaker 2: Short coat.

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Speaker 1: This is bad and in some places, some parts of

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Speaker 1: straits worse than others. Blake Victoria, but it's bad.

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Speaker 2: Sydney's bad, dude. I, as you know, designed the totality

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Speaker 2: indicies that we used to measure house pruss changes in Australia.

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Speaker 2: In the last three months of data, Sydney house prices

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Speaker 2: are falling at a twelve percent annual rate. Melbourne prices

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Speaker 2: are also falling at a double digit annual rate. So

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Speaker 2: we have potentially the mother of all housebruss corrections, the

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Speaker 2: biggest fall in national house prices ever accorded with eleven percent.

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Speaker 2: So I think there's two explanations for this big downward

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Speaker 2: adjustment prices. One is, obviously the RBA has lifted the

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Speaker 2: CA straight three times because they shouldn't have cut the

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Speaker 2: cash rate in twenty twenty five, but they were politically

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Speaker 2: corrupted by the treasure of Jim Chalmers. He sacked the Treasurer.

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Speaker 2: So he sacked the governor of the RBA and replaced

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Speaker 2: that governor fil though with a new governor and a

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Speaker 2: deputy governor and the new board and a new board,

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Speaker 2: and so we replaced seven of the nine interest rate

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Speaker 2: voting members on the interest rate Setting Committee, and so

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Speaker 2: ultimately you got a very dubbish Reserve Bank of Australia

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Speaker 2: was very politically partial to Charmers and Albanesi, and they

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Speaker 2: won the election with the tail wind of the rate cuts.

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Speaker 2: But house prices, part of that point, had been falling.

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Speaker 2: So until the RBA first cut rates in Febry twenty

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Speaker 2: twenty five, house prices were in decline and those rate

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Speaker 2: cuts really balled out the housing market. Now they've reversed

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Speaker 2: those rate cuts and we are still staring at the

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Speaker 2: specter of potentially further hikes. So currently the cashots at

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Speaker 2: four point three five percent. Our modeling implies the RBA

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Speaker 2: probably who's cool, that's cool, but yeah, our modeling implies

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Speaker 2: that the RBA should probably lift the cashret to somewhere

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Speaker 2: between four point seventy five percent. Yeah, So that's another

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Speaker 2: couple of hikes, possibly three hikes, And that's not that high.

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Speaker 1: That's the control inflation there.

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Speaker 2: Yeah, So how bud is inflation I talk, you know,

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Speaker 2: I use the potentially hyperbolic characterization of an inflation crisis.

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Speaker 2: But we haven't hit the target since twenty twenty one.

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Speaker 2: But today, inflation over the last six months in Australia

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Speaker 2: has annualized it a three point four percent annual rate

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Speaker 2: and over the last twelve months at a three and

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Speaker 2: a half percent annual rate. So inflation is running way

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Speaker 2: above the RBA's target. And with all this public spending

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Speaker 2: creating pressure in the economy at the same time as

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Speaker 2: in the half a million new people coming into the

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Speaker 2: country every years put creating pressure on the economy, we

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Speaker 2: have entrenched inflation pressures that only higher interest rates can

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Speaker 2: deal with unless the politicians start to pull in their

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Speaker 2: purse strings and balance the books. But they're not going

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Speaker 2: to do that. So I think the RBA has a

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Speaker 2: a multi year battle on its hands with inflation. I

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Speaker 2: don't think there's any short term pantasy. I don't think

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Speaker 2: there's any easy answer. It's going to require a lot

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Speaker 2: of pain. And we had a similar cycle between two

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Speaker 2: thousand and two and two thousand and seven when the

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Speaker 2: RBA lifted the cash rate to its highest seven point

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Speaker 2: twenty five percent. But I was going to make the

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Speaker 2: point that from twenty twenty two to twenty twenty three,

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Speaker 2: the RBA lifted the cash rate from zero point one

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Speaker 2: percent all the way up to four point three five percent,

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Speaker 2: and they stopped in November twenty three. The rest of

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Speaker 2: the world went to five to five and a half percent.

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Speaker 1: And I remember you talking about it. You were saying

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Speaker 1: we should have gone more.

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Speaker 2: We should have gone more. Exactly, you've got a good memory.

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Speaker 2: So Canada, New Zealand, the US UK all went to

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Speaker 2: five five and a half. The RBA was the only

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Speaker 2: central bank in the world that really bucked that trough.

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Speaker 2: And they said, no, no, no, we're unusually gifted. We can

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Speaker 2: thread the needle. We're going to keep unemployment low and

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Speaker 2: inflation low. And I argue they were wrong, and particularly

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Speaker 2: we use their own economic models, so we're coolby round

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Speaker 2: the RBA's economic models. We showed publicly that they should

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Speaker 2: have gone to five, but they didn't. They went to

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Speaker 2: four point three five and we never got inflation in

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Speaker 2: the control. So the risk is we need to go

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Speaker 2: back to five again. And the risk is it's going

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Speaker 2: to be a bit of a push pull, and it

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Speaker 2: could be a long cycle where they pause for twelve

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Speaker 2: months and then hike again, and all of that's bad

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Speaker 2: for house prices. So the first negative for house prices

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Speaker 2: is the IRBA lifting the cash rate. The second their

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Speaker 2: negative is just the huge regulatory and tax uncertainty created

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Speaker 2: by the budget. What is and isn't going to happen?

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Speaker 2: And I just think you get an immense amount of

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Speaker 2: inertia and decision making paralysis because people don't know what's

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Speaker 2: going to happen, what are they going to keep, what

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Speaker 2: are they going to roll back, what happens if there's

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Speaker 2: a change of government, and so it just kills sentiment

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Speaker 2: and it kills the preparedness for people to allocate their

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Speaker 2: marginal dollars into real estate.

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Speaker 1: So what's interesting about that? And I know this for

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Speaker 1: a fact that in terms of flow of new mortgages

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Speaker 1: on a monthly basis, around forty two percent of that

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Speaker 1: was coming from investors. And the investor market has just

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Speaker 1: completely disappeared, Is that right? Yeah, just they've gone nowhere.

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Speaker 1: And sure there are some and I heard the Prime

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Speaker 1: Minister saying yesterday the day before that there's more new

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Speaker 1: homeowners in Australia, or more people are buying first time

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Speaker 1: owners are buying homes. Yeah, but as a percentage of

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Speaker 1: what of first time owners before, Yes, house prices might

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Speaker 1: be lower. Therefore a few more people might be able

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Speaker 1: to afford to buy a house. But the point is

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Speaker 1: you have to there are more people are who own

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Speaker 1: a house who have a mortgage, or people who own

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Speaker 1: a house who don't have a mortage but paid it off,

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Speaker 1: did the right thing. And then you know, they might

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Speaker 1: be in the sixties whose only asset is the home,

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Speaker 1: so they feel rich or poor based on the value

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Speaker 1: of the home as opposed to the number of people

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Speaker 1: who want to get into the home. And this is

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Speaker 1: a bit of a problem. I mean, you don't solve

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Speaker 1: one problem by creating a problem for somebody else. So

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Speaker 1: the way they've just decided to solve the problem for

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Speaker 1: the people who don't own a home first time buyers

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Speaker 1: is to take value away from the people who do.

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Speaker 1: I know.

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Speaker 2: Yeah, they're trying to naterally pick winners and lose.

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Speaker 1: That's not the answer.

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Speaker 2: Is if there's some benevolent dictator.

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Speaker 1: Well that's god mentality. Yeah, and it's unfair because.

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Speaker 2: It's the same mentality of you know, trying to win

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Speaker 2: a hoodwinking the entire country by saying in an election repeatedly,

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Speaker 2: we're not going to do CGT, we're not going to

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Speaker 2: do negative gearing, everyone contemplating taxing trusts or death taxes,

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Speaker 2: and then just rolling out precisely that, and then they

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Speaker 2: got what's amazing made is it was clear that the

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Speaker 2: community signal that after the budget this was something that

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Speaker 2: they were violently opposed to, like there was a huge

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Speaker 2: backlash against all these polishy measures, and yet they're still

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Speaker 2: railroaded them through Parliament. So they have no interest in

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Speaker 2: sort of cleaving to any democratic notions at all. This

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Speaker 2: is just a money and a powergraph.

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Speaker 1: So you know a lot of people are going to

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Speaker 1: you know, I know what's going to happen, but they're

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Speaker 1: going to come after a thing and to say, well,

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Speaker 1: you know, you to die in the wall. Liberals, there's

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Speaker 1: nothing to do. A liberal part of their paper means

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Speaker 1: this is just about policy, like individuals who made who

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Speaker 1: have decided to make a policy. The point being here

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Speaker 1: is the Reserve Bank, which is independent, is putting interest

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Speaker 1: rates up because of the money that's been spent absolutely,

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Speaker 1: and they're going to do it again.

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Speaker 2: Interest rates would be a hell of a lot lower,

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Speaker 2: and inflation would be a hell of a lot lower

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Speaker 2: in Australia, and our cost of living would be lower

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Speaker 2: if and our taxes work would be lower if they

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Speaker 2: weren't spending as much money as they are on all

395
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Speaker 2: of these crazy projects, infrastructure projects that have never completed,

396
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Speaker 2: pet projects that are completely unnecessary. The NBN, and we

397
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Speaker 2: spent the best part of fifty sixty billion on the NBN,

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Speaker 2: which is being rendered completely redundant by Starlink when they

399
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Speaker 2: came out with the idea of the NBN, and this

400
00:21:40,880 --> 00:21:43,119
Speaker 2: is a classic two labor politicians sitting on a private

401
00:21:43,200 --> 00:21:46,879
Speaker 2: jet writing an idea down on a beer coaster that

402
00:21:46,960 --> 00:21:49,439
Speaker 2: wouldn't it be great just to build a fiber optic

403
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Speaker 2: network that we control, we control the Internet. That sounds

404
00:21:52,280 --> 00:21:54,879
Speaker 2: pretty fun, doesn't Yeah? Sure? Then they splaged fifty to

405
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Speaker 2: sixty billion on it. At the time they came out

406
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Speaker 2: with the idea, I wrote for the ABC online, what

407
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Speaker 2: happened if we get super fast wireless internet? Hey, what

408
00:22:03,560 --> 00:22:07,119
Speaker 2: happens if somebody starts cracking the code on satellite Internet LO?

409
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Speaker 2: And behold elon Musk rocks up with SpaceX delivering Starlink Internet,

410
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Speaker 2: which can give you one thousand megabit per second internet

411
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Speaker 2: speeds in aeroplanes flying at forty five thousand feet. So

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Speaker 2: arguably SpaceX and Starlink, you know, going to eviscerate the

413
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Speaker 2: need for the NBN huge waste of money?

414
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Speaker 1: Are you starlink? I mean, and I don't have it

415
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Speaker 1: in my house anymod have my farm, But I ardequally

416
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Speaker 1: would say I put it in my house that sign

417
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Speaker 1: if I need to, Like, I have no issue about

418
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Speaker 1: it none.

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Speaker 2: You're going to have Starlink in your phone soon. What's

420
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Speaker 2: going to happen to the telecom communications companies when SpaceX

421
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Speaker 2: and starting are completely disintermediating them?

422
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Speaker 1: So what's the prognosis in mate? Like amman, this sounds

423
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Speaker 1: very bleak. I mean, if we're talking about house prices,

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Speaker 1: do you see a recovery on house prices? I mean,

425
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Speaker 1: we're still gonna have a shortage. The one good thing

426
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Speaker 1: is of bringing more people into the country, of which

427
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Speaker 1: everybody needs somewhere to live over time, do you think

428
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Speaker 1: we'll recover get back to where it was? I mean,

429
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Speaker 1: we've seen falls and house prices before in Australia. We've

430
00:23:09,320 --> 00:23:11,400
Speaker 1: seen falls and share markers before. In Australia, things seem

431
00:23:11,400 --> 00:23:13,800
Speaker 1: to recover this they tend to recover even better than

432
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Speaker 1: they were before the fall. What do you feel.

433
00:23:16,440 --> 00:23:17,840
Speaker 2: I think this will be one of the biggest, if

434
00:23:17,880 --> 00:23:19,679
Speaker 2: not the biggest correction in the house prices we've ever

435
00:23:19,720 --> 00:23:22,520
Speaker 2: seen point one point two. I think it'll be a

436
00:23:22,600 --> 00:23:26,800
Speaker 2: multi year battle against inflation that will require the RBA.

437
00:23:26,720 --> 00:23:28,320
Speaker 1: To potentially lift that's the keyson.

438
00:23:28,359 --> 00:23:32,560
Speaker 2: It illustrates a lot further and it could be very

439
00:23:32,600 --> 00:23:34,479
Speaker 2: stop start like we saw between two thousand and two

440
00:23:34,480 --> 00:23:37,560
Speaker 2: and two thousand and seven. I think another problem that

441
00:23:37,600 --> 00:23:39,920
Speaker 2: the housing market faces, which no one's really talking about,

442
00:23:39,960 --> 00:23:41,440
Speaker 2: and which I think I might have spoken about on

443
00:23:41,480 --> 00:23:43,959
Speaker 2: the last podcast episode we did. But one of our

444
00:23:44,000 --> 00:23:48,200
Speaker 2: key predictions, and this is well before the budget triggered

445
00:23:48,200 --> 00:23:51,359
Speaker 2: the debate, was that we would have a very polarizing

446
00:23:51,400 --> 00:23:54,680
Speaker 2: debate on immigration, as we've seen play out around the

447
00:23:54,720 --> 00:23:57,280
Speaker 2: rest of the world, in Canada, in the UK, in

448
00:23:57,359 --> 00:24:00,720
Speaker 2: the US, Poland, Yeah, Poland. And what I told you

449
00:24:00,840 --> 00:24:03,119
Speaker 2: last time was I think we need to prepare for

450
00:24:03,160 --> 00:24:07,160
Speaker 2: a world, or more specifically a country and an economy

451
00:24:07,200 --> 00:24:09,320
Speaker 2: where we have no population growth. It's quite normal in

452
00:24:09,359 --> 00:24:11,119
Speaker 2: the US right now they have no population growth. In

453
00:24:11,160 --> 00:24:13,800
Speaker 2: Japan they've had for a long time negative population growth.

454
00:24:14,800 --> 00:24:18,359
Speaker 2: Population growth is slumped in New Zealand and Canada, and

455
00:24:18,400 --> 00:24:21,240
Speaker 2: an Australian economy with no population growth is a completely

456
00:24:21,280 --> 00:24:24,480
Speaker 2: different proposition, and that would be as a function of

457
00:24:24,840 --> 00:24:28,000
Speaker 2: a radical reduction in immigration, which is arguably required just

458
00:24:28,040 --> 00:24:31,000
Speaker 2: to cope with the huge influx in people that we've

459
00:24:31,000 --> 00:24:33,960
Speaker 2: had to absorb in recent times, where we've been running

460
00:24:33,960 --> 00:24:37,280
Speaker 2: the world's strongest rate of population growth growth certainly as

461
00:24:37,320 --> 00:24:40,159
Speaker 2: measured by kind of leading countries in the OECD. So

462
00:24:41,040 --> 00:24:43,320
Speaker 2: that would be very, very negative for housing made So

463
00:24:43,359 --> 00:24:46,400
Speaker 2: you have a combination of much higher in straits, which

464
00:24:46,400 --> 00:24:51,919
Speaker 2: we're contending with right now, coupled with extreme tax, legal,

465
00:24:52,080 --> 00:24:54,960
Speaker 2: regulatory and political uncertainty. Because you just look left and

466
00:24:55,040 --> 00:24:57,320
Speaker 2: right every time move, youre getting your headlown off by

467
00:24:57,320 --> 00:25:01,520
Speaker 2: these professional politicians who just want to take everything, your income,

468
00:25:01,520 --> 00:25:04,880
Speaker 2: your savings, your capital, the works. And then you have

469
00:25:05,080 --> 00:25:08,000
Speaker 2: a world in which the demand side driver that had

470
00:25:08,000 --> 00:25:09,800
Speaker 2: been the gift that keeps on giving in the form

471
00:25:09,840 --> 00:25:12,840
Speaker 2: of well beating population growth, suddenly disappears, and that can

472
00:25:12,880 --> 00:25:15,040
Speaker 2: happen very quickly. If you turn off the immigration taps,

473
00:25:15,359 --> 00:25:19,120
Speaker 2: you're not going to have any population growth, trivial population growth,

474
00:25:19,119 --> 00:25:21,439
Speaker 2: because we don't have much in the way of natural fertility.

475
00:25:21,960 --> 00:25:23,639
Speaker 2: So I think the prospects of the housing market are

476
00:25:23,640 --> 00:25:27,240
Speaker 2: a little grim, and I think there's a reasonable chance

477
00:25:27,320 --> 00:25:29,600
Speaker 2: we have one of, if not the biggest correction of

478
00:25:29,640 --> 00:25:30,800
Speaker 2: house prices we've ever seen.

479
00:25:31,160 --> 00:25:35,240
Speaker 1: The growth in population or the immigration that helps population growth,

480
00:25:35,560 --> 00:25:38,080
Speaker 1: what's the economic policy behind that so far? I mean,

481
00:25:38,280 --> 00:25:41,240
Speaker 1: what is it that is justified from an economics point

482
00:25:41,240 --> 00:25:44,600
Speaker 1: of view, well apart from collecting more taxes because everyone

483
00:25:44,600 --> 00:25:45,240
Speaker 1: has to get a job.

484
00:25:45,440 --> 00:25:48,800
Speaker 2: So I think the political calculus is the government of

485
00:25:48,800 --> 00:25:51,480
Speaker 2: the day at the federal and state level, has spent

486
00:25:51,560 --> 00:25:55,680
Speaker 2: trillions of dollars and they need people to deliver those intentions,

487
00:25:56,200 --> 00:26:03,800
Speaker 2: whether it's schools, infrastructure, care, economy, yeah, hospitals, whatever the

488
00:26:03,840 --> 00:26:06,080
Speaker 2: case may be. And we just don't have enough people

489
00:26:06,080 --> 00:26:09,719
Speaker 2: in this country. So unemployment in Australia is sitting at

490
00:26:09,840 --> 00:26:12,760
Speaker 2: very low historical levels, around four point four percent. The

491
00:26:12,880 --> 00:26:15,800
Speaker 2: normal rate of unemployment, according to the RBA's own numbers,

492
00:26:15,840 --> 00:26:19,639
Speaker 2: is about five percent. And what that means is the

493
00:26:19,760 --> 00:26:23,520
Speaker 2: labor market's hot, and that drives wage pressures. We've obviously

494
00:26:23,520 --> 00:26:27,840
Speaker 2: had very large minimum wage increases that amplify that, and

495
00:26:27,880 --> 00:26:31,520
Speaker 2: that in turn feeds into the costs that businesses have

496
00:26:31,600 --> 00:26:34,560
Speaker 2: to bear, which are people. And in Australia we have

497
00:26:34,560 --> 00:26:37,919
Speaker 2: a particularly insidious problem where not only is there healthy

498
00:26:37,920 --> 00:26:41,879
Speaker 2: wage growth, but productivity is amongst the world's lowest, and

499
00:26:41,920 --> 00:26:45,080
Speaker 2: so productivity adjusted wage growth is very strong and that's

500
00:26:45,080 --> 00:26:48,119
Speaker 2: what drives inflation. So our productivity adjusted wage growth has

501
00:26:48,160 --> 00:26:51,399
Speaker 2: been running around five percent and that feeds into very

502
00:26:51,400 --> 00:26:55,639
Speaker 2: strong services inflation, which keeps the cost of living very high.

503
00:26:55,680 --> 00:27:00,400
Speaker 2: So we have ongoing very robust inflation pressure that didn't

504
00:27:00,400 --> 00:27:02,439
Speaker 2: turn what weren't higher interest rates.

505
00:27:02,640 --> 00:27:05,080
Speaker 1: So what is a government? What have they got to do?

506
00:27:05,160 --> 00:27:08,919
Speaker 1: Like I mean, I remember years ago you wrote a

507
00:27:09,000 --> 00:27:11,560
Speaker 1: nine point plan or eleven point plan for Joe Hockey

508
00:27:12,000 --> 00:27:15,199
Speaker 1: when he was the treasurer. But what what would you

509
00:27:15,240 --> 00:27:17,880
Speaker 1: be planning for? What would you say to Jim Chalmers

510
00:27:17,880 --> 00:27:21,640
Speaker 1: now to correct things? Because because because because the last

511
00:27:21,640 --> 00:27:23,240
Speaker 1: thing he wants is to go on an election in

512
00:27:23,440 --> 00:27:28,040
Speaker 1: twenty eight with us perhaps in a recession, and we'll

513
00:27:28,040 --> 00:27:30,800
Speaker 1: talk about that in a moment. Or house prices down

514
00:27:31,880 --> 00:27:36,399
Speaker 1: in interest rates high, et cetera. You know, unemployment perhaps

515
00:27:36,440 --> 00:27:38,359
Speaker 1: going closer to five percent. Last thing he wants is

516
00:27:38,359 --> 00:27:40,200
Speaker 1: at what would you be saying to Gym.

517
00:27:40,280 --> 00:27:44,080
Speaker 2: Now, I'd sell the NBN and get whatever value you

518
00:27:44,119 --> 00:27:48,840
Speaker 2: can salvage from it. I'd cut the NBAS down pine

519
00:27:49,520 --> 00:27:52,800
Speaker 2: fifty to seventy five percent. I would try and shrink

520
00:27:53,160 --> 00:27:56,760
Speaker 2: the public service by about a quarter, so you'd say

521
00:27:56,800 --> 00:27:59,520
Speaker 2: a huge amount of money through those channels. I'd increase

522
00:27:59,560 --> 00:28:03,600
Speaker 2: the GIS tea and widen the base of the GST

523
00:28:04,640 --> 00:28:07,320
Speaker 2: so to cover more things. Yep, I'd increase to about

524
00:28:07,359 --> 00:28:09,960
Speaker 2: fifteen percent. And then I'd use all of those savings

525
00:28:10,359 --> 00:28:14,159
Speaker 2: to fund massive income tax cuts and massive corporate tax cuts.

526
00:28:14,520 --> 00:28:17,960
Speaker 2: I'd obviously remove his new taxes like the trust taxes,

527
00:28:18,440 --> 00:28:22,480
Speaker 2: and then I'd create incentives for the founders of new business,

528
00:28:23,040 --> 00:28:27,119
Speaker 2: whereby they would have the opportunity to pay no capital

529
00:28:27,160 --> 00:28:30,760
Speaker 2: gains tax on their upside in the event that they

530
00:28:30,800 --> 00:28:34,920
Speaker 2: were successful and they created well beating products and services.

531
00:28:34,960 --> 00:28:39,880
Speaker 2: So you could create a quarantine on any capital gains

532
00:28:39,880 --> 00:28:43,560
Speaker 2: tax at all up to say a certain threshold, and

533
00:28:43,680 --> 00:28:49,520
Speaker 2: try and ensure Australia remained a destination for world class

534
00:28:50,160 --> 00:28:53,760
Speaker 2: human and financial capital that would have all the incentives

535
00:28:54,200 --> 00:28:56,520
Speaker 2: to establish new ideas here.

536
00:28:57,040 --> 00:29:01,320
Speaker 1: Would you create like a play in a certain a

537
00:29:01,360 --> 00:29:03,080
Speaker 1: circle and a certain place to sit in your Melbourne

538
00:29:03,080 --> 00:29:04,480
Speaker 1: prisoner where it is a bit like it They've duneon

539
00:29:04,520 --> 00:29:07,400
Speaker 1: Island in Dublin where you invite all the big guys

540
00:29:07,400 --> 00:29:09,480
Speaker 1: in and say, look, if you establish yourself here and

541
00:29:09,520 --> 00:29:11,479
Speaker 1: employed people that start building buildings and all that sort

542
00:29:11,520 --> 00:29:13,520
Speaker 1: of stuff, your tax rate will be ten percent. Would

543
00:29:13,560 --> 00:29:16,520
Speaker 1: you like Singapore style? Yeah, I mean Dublin style.

544
00:29:17,280 --> 00:29:20,360
Speaker 2: We've seen around the world that these incentives work, whether

545
00:29:20,360 --> 00:29:26,280
Speaker 2: it's Abadabi, Dubai, Italy, Portugal, Florida, Texas. If you set

546
00:29:26,360 --> 00:29:31,080
Speaker 2: the platform for businesses to become well beating, you will

547
00:29:31,120 --> 00:29:34,760
Speaker 2: attract people in capital. But I probably would look at

548
00:29:34,760 --> 00:29:39,560
Speaker 2: a national reset. So I'm not that interested in having

549
00:29:39,640 --> 00:29:43,040
Speaker 2: one particular jurisdiction that has these incentives. I want to

550
00:29:43,040 --> 00:29:45,600
Speaker 2: make Australia a great place to invest in work in

551
00:29:45,680 --> 00:29:50,200
Speaker 2: by Australians. Yeah, and so I think the solutions are clear.

552
00:29:50,880 --> 00:29:54,160
Speaker 2: It's a lot less political spending, much lower taxes, and

553
00:29:54,920 --> 00:30:00,440
Speaker 2: massive rationalization of waste NBN waste, NDIS waste, public BUREYOCRICY

554
00:30:01,080 --> 00:30:03,480
Speaker 2: I mean, we know that if we went through. In fact,

555
00:30:03,480 --> 00:30:05,000
Speaker 2: I was just having lunch with a bunch of guys

556
00:30:05,080 --> 00:30:08,000
Speaker 2: today who said the waste in the public service in

557
00:30:08,080 --> 00:30:11,240
Speaker 2: commercial real estate is unbelievable. He said, we own these buildings.

558
00:30:11,240 --> 00:30:13,360
Speaker 1: There's someone in there, there's nobody in there, and they're empty.

559
00:30:13,480 --> 00:30:14,000
Speaker 1: There's camera.

560
00:30:14,280 --> 00:30:18,200
Speaker 2: These are ghost cities. And everyone works from home.

561
00:30:19,640 --> 00:30:22,680
Speaker 1: They don't need They probably can work from home, subjects

562
00:30:22,680 --> 00:30:24,240
Speaker 1: them being supervised to stuff like that, but they don't

563
00:30:24,240 --> 00:30:26,240
Speaker 1: go to work. I know that to be the case.

564
00:30:26,240 --> 00:30:29,360
Speaker 2: In Canberra. We know that there's been absolutely zero increase

565
00:30:29,520 --> 00:30:32,520
Speaker 2: in government productivity for about a quarter of a century.

566
00:30:32,600 --> 00:30:34,520
Speaker 2: So that's one of the big problems that straight has

567
00:30:34,520 --> 00:30:36,560
Speaker 2: with its overall productivity performance.

568
00:30:36,600 --> 00:30:39,000
Speaker 1: How much of this is to blame just labor? I mean,

569
00:30:39,280 --> 00:30:40,320
Speaker 1: where's liberal f in it? All?

570
00:30:40,320 --> 00:30:40,400
Speaker 2: This?

571
00:30:40,680 --> 00:30:42,920
Speaker 1: And Nationals and the Coalition generally.

572
00:30:44,440 --> 00:30:46,600
Speaker 2: You know, people often say that the opposition is to blame.

573
00:30:46,920 --> 00:30:49,440
Speaker 2: We don't have a healthy opposition. I just wonder whether

574
00:30:49,680 --> 00:30:52,080
Speaker 2: it's the opposition or it's actually the electorate and the

575
00:30:52,120 --> 00:30:55,160
Speaker 2: community and voters themselves. Because they want this hedonism, they

576
00:30:55,240 --> 00:30:58,080
Speaker 2: want this myopia, they want the handouts they've loved making

577
00:30:58,120 --> 00:30:59,920
Speaker 2: out like bandits on the NDA.

578
00:31:00,080 --> 00:31:02,080
Speaker 1: So you have got try I mean in this room

579
00:31:02,120 --> 00:31:03,440
Speaker 1: has got that handers. I mean, do you know people

580
00:31:03,480 --> 00:31:04,200
Speaker 1: got the handouts?

581
00:31:04,760 --> 00:31:06,800
Speaker 2: No, but people are getting handouts and they are making

582
00:31:06,800 --> 00:31:09,640
Speaker 2: it like banners and they are perpetually voting the likes

583
00:31:09,640 --> 00:31:13,040
Speaker 2: of Dana Andrews back into power. So the incentives work.

584
00:31:13,160 --> 00:31:15,280
Speaker 2: You know, you pay money, they tend to people, they

585
00:31:15,320 --> 00:31:18,480
Speaker 2: tend to be partial to your perspectives when you're funding them.

586
00:31:18,560 --> 00:31:23,600
Speaker 2: And I think that works until you get an inflation

587
00:31:23,680 --> 00:31:27,200
Speaker 2: crisis that warrants much higher interest rates. And it also

588
00:31:27,240 --> 00:31:29,640
Speaker 2: works until you wreck up so much debt that you're

589
00:31:29,720 --> 00:31:33,040
Speaker 2: left with no choice but to jam taxes up in

590
00:31:33,120 --> 00:31:35,880
Speaker 2: order to get people to repay the money you've borrowed.

591
00:31:36,120 --> 00:31:39,520
Speaker 2: So and I think that reckoning is emerging now. We're

592
00:31:39,520 --> 00:31:43,760
Speaker 2: starting to see people join the dots and understand that

593
00:31:43,840 --> 00:31:48,880
Speaker 2: there is a powerful relationship between government spending, cost of living, inflation,

594
00:31:49,040 --> 00:31:50,080
Speaker 2: interest rates and taxes.

595
00:31:50,520 --> 00:31:54,240
Speaker 1: Could we often talk about the national debt like just

596
00:31:54,680 --> 00:31:58,680
Speaker 1: under a trillion dollars, which means, you know, Australians will

597
00:31:59,080 --> 00:32:01,160
Speaker 1: owe that amount of money and we'll be paying the

598
00:32:01,160 --> 00:32:03,400
Speaker 1: interest in our children and grandchildren paying the interest on

599
00:32:03,440 --> 00:32:05,800
Speaker 1: that for the future. But maybe you could just quickly

600
00:32:05,800 --> 00:32:08,280
Speaker 1: touch on what never gets talked about as a state debt.

601
00:32:09,200 --> 00:32:11,080
Speaker 1: I mean, as I under saying state that debt is

602
00:32:11,120 --> 00:32:13,800
Speaker 1: close to eight one hundred and fifty billion, it's not

603
00:32:13,840 --> 00:32:17,000
Speaker 1: far off the national debt. How important is it for

604
00:32:17,120 --> 00:32:18,920
Speaker 1: us to get control of state debt? And what is

605
00:32:18,920 --> 00:32:21,880
Speaker 1: the relationship between state and federal Like, why is the

606
00:32:21,920 --> 00:32:23,280
Speaker 1: state racking up so much money?

607
00:32:24,280 --> 00:32:26,880
Speaker 2: Well, I think they're borrowing from that same playbook. Everyone

608
00:32:27,040 --> 00:32:29,880
Speaker 2: across all the states has recognized that for that period

609
00:32:29,880 --> 00:32:31,600
Speaker 2: that money was cheap in interest touch was very low.

610
00:32:32,000 --> 00:32:34,920
Speaker 2: They wanted to borrow as much as possible and spend

611
00:32:34,920 --> 00:32:37,600
Speaker 2: as much as possible to buy votes. And that became

612
00:32:37,640 --> 00:32:43,280
Speaker 2: a very successful political reflex that was rolled out. But

613
00:32:43,440 --> 00:32:45,640
Speaker 2: now we're seeing the consequences. What we are seeing is

614
00:32:45,760 --> 00:32:47,800
Speaker 2: the interest rates on state government debt have gone through

615
00:32:47,880 --> 00:32:50,800
Speaker 2: the roof. So Victoria was paying an interest rate on

616
00:32:50,840 --> 00:32:53,080
Speaker 2: instead of about one percent in twenty twenty one, whereas

617
00:32:53,080 --> 00:32:57,040
Speaker 2: today it will be paying closer to six percent. Wow,

618
00:32:57,280 --> 00:32:59,600
Speaker 2: and certainly five and a half to six percent depending

619
00:32:59,600 --> 00:33:00,440
Speaker 2: on what the lone go.

620
00:33:00,440 --> 00:33:02,600
Speaker 1: Because there's losses rating didn't it.

621
00:33:02,120 --> 00:33:05,840
Speaker 2: It went and it's now double A and the risk

622
00:33:05,880 --> 00:33:08,960
Speaker 2: as it goes to single at But yeah, I mean,

623
00:33:09,040 --> 00:33:11,200
Speaker 2: our public debt is accommodation of the federal and state

624
00:33:11,200 --> 00:33:13,400
Speaker 2: government debt. It's a fairly inefficient system where you've got

625
00:33:13,440 --> 00:33:17,360
Speaker 2: a lot of duplication and a lot of coordination failure

626
00:33:17,400 --> 00:33:23,320
Speaker 2: between state and federal governments. And as you mentioned, you know,

627
00:33:23,400 --> 00:33:25,640
Speaker 2: it wasn't long ago that we had no debt to

628
00:33:25,720 --> 00:33:28,160
Speaker 2: really speak of, and the states weren't buying much and

629
00:33:28,160 --> 00:33:31,640
Speaker 2: the Feds weren't buying much. And now their collective debt

630
00:33:31,760 --> 00:33:35,160
Speaker 2: is well north of the trillion dollars. And you know,

631
00:33:35,200 --> 00:33:38,560
Speaker 2: the States are borring about one hundred and twenty five

632
00:33:38,600 --> 00:33:41,960
Speaker 2: billion a year, a little bit more than that in fact,

633
00:33:42,160 --> 00:33:44,520
Speaker 2: and the Feds are also borring about one hundred billion

634
00:33:44,560 --> 00:33:47,480
Speaker 2: a year. So between the two of them, you know,

635
00:33:47,520 --> 00:33:50,680
Speaker 2: they're borring about a quarter of a trillion dollars of

636
00:33:50,760 --> 00:33:51,680
Speaker 2: new debt every year.

637
00:33:52,040 --> 00:33:54,320
Speaker 1: What do you think is going to happen with Australia's rating,

638
00:33:54,400 --> 00:33:57,480
Speaker 1: because at the national level I'm talking about in terms

639
00:33:57,520 --> 00:34:00,520
Speaker 1: of the Credit Agencies rating of US. Do you think

640
00:34:00,560 --> 00:34:02,280
Speaker 1: that they're going to get starting to get nervous about

641
00:34:02,840 --> 00:34:06,880
Speaker 1: deficits and debt rising so much so that they might

642
00:34:07,480 --> 00:34:09,560
Speaker 1: change our rating, which means our interest cost is going

643
00:34:09,600 --> 00:34:11,560
Speaker 1: to cost is going to be a lot more costly

644
00:34:11,600 --> 00:34:12,560
Speaker 1: on an annual basis.

645
00:34:12,920 --> 00:34:15,839
Speaker 2: Yeah, we've definitely been in the cross aairs on our

646
00:34:15,920 --> 00:34:20,319
Speaker 2: rating in the past. The credit rating agencies that anoint

647
00:34:20,400 --> 00:34:25,440
Speaker 2: these things have threatened to Downgreat Australia repeatedly, and the

648
00:34:25,680 --> 00:34:32,400
Speaker 2: ongoing deterioration in our credit worthiness and the enlargening of

649
00:34:32,480 --> 00:34:35,520
Speaker 2: these deficits threatens that rating. So there's every chance we

650
00:34:35,520 --> 00:34:38,560
Speaker 2: could lose that trible rating. We never used to avatable rating.

651
00:34:38,600 --> 00:34:44,279
Speaker 2: We won it after the thrifty experience of the pre

652
00:34:44,400 --> 00:34:47,600
Speaker 2: GFC period, and then that rating has since been called

653
00:34:47,600 --> 00:34:49,799
Speaker 2: into question, and I think it's a good question if

654
00:34:49,800 --> 00:34:51,800
Speaker 2: we lost it. With interest rates go up, there is

655
00:34:51,840 --> 00:34:53,719
Speaker 2: a bit of a relationship between the rating and the

656
00:34:53,760 --> 00:34:56,160
Speaker 2: quality of the rating and the interest rates. It's a

657
00:34:56,239 --> 00:34:59,640
Speaker 2: somewhat complex relationship, but I think the direction of travel

658
00:34:59,719 --> 00:35:04,640
Speaker 2: for interest rates on debt are much higher, and that

659
00:35:04,760 --> 00:35:07,880
Speaker 2: just means higher taxes. Higher interest on debt means governments

660
00:35:07,920 --> 00:35:09,640
Speaker 2: have to pay more money to the people that borrow

661
00:35:09,719 --> 00:35:10,520
Speaker 2: from which means.

662
00:35:10,360 --> 00:35:13,160
Speaker 1: They have to raise taxes in order to service that debt,

663
00:35:13,600 --> 00:35:16,000
Speaker 1: and I think it's really important just to mean you

664
00:35:16,080 --> 00:35:17,960
Speaker 1: and I understand this, but maybe the audience doesn't quite

665
00:35:18,000 --> 00:35:20,439
Speaker 1: get it. The bottom line is when we talk about

666
00:35:20,840 --> 00:35:23,799
Speaker 1: intergenerational inequity in relation to the bigg amounts of debat

667
00:35:23,800 --> 00:35:25,600
Speaker 1: that have been gathered by government, state and victual. But

668
00:35:25,840 --> 00:35:29,680
Speaker 1: the inter generation and equity is that the bigger the debt,

669
00:35:29,800 --> 00:35:32,439
Speaker 1: the higher the amount of interest we pay. The only

670
00:35:32,480 --> 00:35:34,239
Speaker 1: place government are going to get They've got to get

671
00:35:34,239 --> 00:35:37,759
Speaker 1: it from taxes. They either increase the population to get

672
00:35:37,760 --> 00:35:40,680
Speaker 1: more taxes out of an increased population, or alternally do

673
00:35:40,760 --> 00:35:43,479
Speaker 1: something to make our country really profitable and everybody's making

674
00:35:43,840 --> 00:35:46,440
Speaker 1: a whole heap of money, then we all pay more taxes,

675
00:35:46,680 --> 00:35:48,640
Speaker 1: or alternatively, if we don't make a whole lot of money.

676
00:35:48,640 --> 00:35:50,720
Speaker 1: In other words, there's no duty big growth. We're not growing,

677
00:35:51,280 --> 00:35:54,320
Speaker 1: just charging more tax, just drag more tax aut it

678
00:35:54,320 --> 00:35:57,279
Speaker 1: because we the government have to pay the interest on

679
00:35:57,320 --> 00:36:00,000
Speaker 1: the bill, so we have to get the money from somewhere.

680
00:36:00,600 --> 00:36:05,560
Speaker 1: So your point earlier was changes changed that you said,

681
00:36:05,680 --> 00:36:10,799
Speaker 1: change the population growth, immigration, changed the tax position. Maybe

682
00:36:10,880 --> 00:36:14,120
Speaker 1: do something with the GCT. But can you see government

683
00:36:14,160 --> 00:36:14,640
Speaker 1: doing any of that?

684
00:36:15,239 --> 00:36:18,600
Speaker 2: Probably not until you have a cathartic crisis.

685
00:36:18,640 --> 00:36:20,359
Speaker 1: But what do you mean by that, Like we actually hit.

686
00:36:20,280 --> 00:36:23,080
Speaker 2: The recession, you have to have yeah, and that forces

687
00:36:23,080 --> 00:36:26,400
Speaker 2: that basically galvanizes the collective will for real change. So

688
00:36:26,400 --> 00:36:29,000
Speaker 2: I think the change has to come on a grassroots basis.

689
00:36:29,000 --> 00:36:31,200
Speaker 2: I think the great thing about the budget is it

690
00:36:31,239 --> 00:36:35,840
Speaker 2: did catalyze a huge public debate and suddenly it cast

691
00:36:35,920 --> 00:36:38,520
Speaker 2: into sharp relief that there are alternatives. You know, you

692
00:36:38,560 --> 00:36:42,799
Speaker 2: do have one nation, you do have the Coalition. And

693
00:36:43,200 --> 00:36:46,799
Speaker 2: I don't think it's the Coalition's fault necessarily that they

694
00:36:46,800 --> 00:36:49,920
Speaker 2: weren't contest. I mean maybe they competed and contested the

695
00:36:49,960 --> 00:36:53,440
Speaker 2: space very poorly. I don't follow Ossie politics, particularly closing myself,

696
00:36:54,480 --> 00:36:56,719
Speaker 2: but I think there was just no community interest and

697
00:36:56,800 --> 00:37:00,000
Speaker 2: appetite for change. I think everyone was on the tape.

698
00:37:00,160 --> 00:37:03,000
Speaker 2: I mean the cis, the Center for Independent Studies, estimates

699
00:37:03,000 --> 00:37:05,560
Speaker 2: that one in two Australians are deriving more than half

700
00:37:05,600 --> 00:37:07,960
Speaker 2: their income directly or indirectly from the public purse. Whether

701
00:37:08,000 --> 00:37:09,680
Speaker 2: that's right or wrong, we know it's a big number.

702
00:37:10,200 --> 00:37:14,719
Speaker 2: And so the only way you can convince people that

703
00:37:14,760 --> 00:37:17,200
Speaker 2: they need to change and they need to perhaps be

704
00:37:17,280 --> 00:37:21,040
Speaker 2: more thrifty and parsimonious is if they can see the

705
00:37:21,080 --> 00:37:23,000
Speaker 2: costs and they're now staring down the barrel of the

706
00:37:23,040 --> 00:37:26,440
Speaker 2: cost because it's cost living, interest rates, taxes.

707
00:37:26,920 --> 00:37:29,440
Speaker 1: So it seems to me what you're saying is that

708
00:37:29,480 --> 00:37:32,359
Speaker 1: we need to have a collective national punch in the head.

709
00:37:34,040 --> 00:37:35,960
Speaker 1: A recession we had to have. And the last time

710
00:37:36,000 --> 00:37:38,400
Speaker 1: we had a major recession was back in the early nineties,

711
00:37:38,440 --> 00:37:40,719
Speaker 1: and Keating called it the recession we had to have.

712
00:37:41,400 --> 00:37:44,719
Speaker 1: By the way, that period, whilst interesting, was substantially high

713
00:37:44,800 --> 00:37:47,600
Speaker 1: in absolute terms, in relative terms relative the amount of

714
00:37:47,600 --> 00:37:50,160
Speaker 1: money we borrow, we're actually in a worse position now

715
00:37:50,880 --> 00:37:54,800
Speaker 1: right now. He did call for Banana Republic at the

716
00:37:54,800 --> 00:37:57,400
Speaker 1: same time, I think earlier on in that year, but

717
00:37:57,480 --> 00:37:59,920
Speaker 1: he said it's a recession we had to have, being honest.

718
00:38:00,200 --> 00:38:02,720
Speaker 1: You know, one thing about Coating was always pretty honest.

719
00:38:03,520 --> 00:38:05,000
Speaker 1: He said we had to have it because that was

720
00:38:05,000 --> 00:38:07,200
Speaker 1: the only way you're going to control inflation getting strace back.

721
00:38:07,960 --> 00:38:10,919
Speaker 1: Do you see that as a proper proagnosis from Australia.

722
00:38:11,120 --> 00:38:14,439
Speaker 2: I think inevitably, like whether we have a recession soon

723
00:38:15,040 --> 00:38:17,480
Speaker 2: or at some point in the future, that's probably going

724
00:38:17,520 --> 00:38:21,560
Speaker 2: to be what's required to make the changes that are

725
00:38:21,880 --> 00:38:28,760
Speaker 2: needed in order to restore productivity, improve the per capita

726
00:38:28,840 --> 00:38:32,520
Speaker 2: income growth, the standard of living nationally, and to power

727
00:38:32,520 --> 00:38:35,399
Speaker 2: prosperity because otherwise we've talked about this before, we become

728
00:38:35,400 --> 00:38:37,440
Speaker 2: ashes at bet that we just sell our physical wears,

729
00:38:37,440 --> 00:38:42,200
Speaker 2: our beaches and bikinis and budgies and yeah, so we

730
00:38:42,560 --> 00:38:45,040
Speaker 2: need a big reset. I do think the brain drain

731
00:38:45,120 --> 00:38:48,200
Speaker 2: is a real issue. I mean a lot of very

732
00:38:48,200 --> 00:38:51,480
Speaker 2: successful strains that I speak to are looking for alternative

733
00:38:51,480 --> 00:38:54,680
Speaker 2: They have moved their capital. Yeah, well they are, it's happening. Yeah, yeah,

734
00:38:54,680 --> 00:38:56,479
Speaker 2: because they're just like and the rest of the world

735
00:38:56,520 --> 00:38:58,640
Speaker 2: looks at Australia just thinks we're basket cases in the

736
00:38:58,680 --> 00:39:01,080
Speaker 2: sense that but non the Republic, well they think this

737
00:39:01,160 --> 00:39:03,640
Speaker 2: is the UK reducts. This is exactly what happened in

738
00:39:03,640 --> 00:39:07,040
Speaker 2: the UK, This stealth socialism, the pendulum swinging to the

739
00:39:07,040 --> 00:39:09,080
Speaker 2: fire lift. It's also similar to what happened under Biden.

740
00:39:09,719 --> 00:39:12,160
Speaker 2: So we're now seeing the pendulum swing in the other direction.

741
00:39:13,200 --> 00:39:15,680
Speaker 2: And people are saying to understand that the cost of

742
00:39:17,440 --> 00:39:20,919
Speaker 2: taxing away productivity and prosperity is lower living standards and

743
00:39:21,000 --> 00:39:23,759
Speaker 2: everyone's worth off. The world is actually a much better

744
00:39:23,800 --> 00:39:28,120
Speaker 2: place with the Elon Musks out there, rather than having

745
00:39:28,120 --> 00:39:30,160
Speaker 2: the place powered by the Jim Chalmers and the Anthony

746
00:39:30,160 --> 00:39:33,799
Speaker 2: Alberanezies of the world who are kind of sucking on

747
00:39:33,840 --> 00:39:37,120
Speaker 2: the taxpayer's teeth. And the thing about Musk is people say, well,

748
00:39:37,200 --> 00:39:40,480
Speaker 2: let's just tax him even more as if there'll be

749
00:39:40,560 --> 00:39:44,680
Speaker 2: no consequences. But if you create those disincentives, Musk will

750
00:39:44,719 --> 00:39:46,359
Speaker 2: go elsewhere. There he leave.

751
00:39:46,640 --> 00:39:48,200
Speaker 1: Yeah, then you can do the same thing. His brain

752
00:39:48,239 --> 00:39:49,080
Speaker 1: will take him anywhere.

753
00:39:49,400 --> 00:39:51,200
Speaker 2: As crazy as it sounds, why do you think he

754
00:39:51,400 --> 00:39:54,560
Speaker 2: wants to create an interplanetary capability? I mean, who has

755
00:39:55,000 --> 00:39:59,439
Speaker 2: control of rights, regulations and in space or in mars. Yeah,

756
00:40:00,280 --> 00:40:02,200
Speaker 2: it's very interesting in utopia.

757
00:40:02,280 --> 00:40:05,759
Speaker 1: Yeah, it's a very interesting prognosis that we're sort of

758
00:40:05,800 --> 00:40:07,920
Speaker 1: sitting in front of us, Because what should people be

759
00:40:07,960 --> 00:40:10,839
Speaker 1: looking out for if this government thinks that we're going

760
00:40:10,880 --> 00:40:12,759
Speaker 1: to go into a recession. Let's just say some of

761
00:40:12,760 --> 00:40:15,200
Speaker 1: the treasures said there's a possibility we go into recession

762
00:40:15,200 --> 00:40:18,120
Speaker 1: because of the high interest rates and the cost of living,

763
00:40:18,120 --> 00:40:21,279
Speaker 1: et cetera, et cetera. What would you expect to see

764
00:40:21,280 --> 00:40:23,400
Speaker 1: the government do to avoid that Before the next election.

765
00:40:23,440 --> 00:40:25,200
Speaker 1: What sort of policies would they put in place I

766
00:40:25,200 --> 00:40:28,920
Speaker 1: don't know, mean economic policies, but spend give people more money.

767
00:40:29,080 --> 00:40:30,920
Speaker 2: I think they're going to spend more, and this is the.

768
00:40:31,239 --> 00:40:33,120
Speaker 1: To buy their way of recession for the next election.

769
00:40:33,440 --> 00:40:36,840
Speaker 2: Try and defer and delay that prospect. And the problem

770
00:40:36,960 --> 00:40:38,680
Speaker 2: is it just exacerbates the problem.

771
00:40:38,560 --> 00:40:40,400
Speaker 1: Or pushes it a bit further, but makes it bigger.

772
00:40:40,600 --> 00:40:42,960
Speaker 2: Yeah, but they're kicking the can down the road. But

773
00:40:43,080 --> 00:40:45,920
Speaker 2: if they lose the election, it'll be the next government.

774
00:40:46,040 --> 00:40:47,719
Speaker 2: And if they win the election, they can deal with

775
00:40:47,760 --> 00:40:48,919
Speaker 2: that problem at that point in time.

776
00:40:49,120 --> 00:40:51,239
Speaker 1: So in other words, we'll put the land mines out

777
00:40:51,280 --> 00:40:54,400
Speaker 1: there everywhere, and if we lose, someone else is going

778
00:40:54,440 --> 00:40:54,919
Speaker 1: to have the problem.

779
00:40:54,960 --> 00:40:57,960
Speaker 2: And these guys are absolutely deluted donkeys. They have no

780
00:40:58,080 --> 00:41:00,880
Speaker 2: idea whatsoever. I mean, everything they're doing is killing the country.

781
00:41:01,160 --> 00:41:05,400
Speaker 1: Meanwhile, we've got the Reserve Bank governor sitting there looking

782
00:41:05,440 --> 00:41:07,759
Speaker 1: at all this that going on and think just so well,

783
00:41:07,760 --> 00:41:11,720
Speaker 1: my job is to reduce inflation. My only only mechanism

784
00:41:11,840 --> 00:41:14,400
Speaker 1: is interest rates. What chance does she have for not

785
00:41:14,400 --> 00:41:17,160
Speaker 1: putting rates up and continuing it to do so?

786
00:41:17,320 --> 00:41:20,439
Speaker 2: Yeah, I mean they've been perpetually dubbish, so they will

787
00:41:20,440 --> 00:41:23,080
Speaker 2: try and avoid rate hikes if they can. So the

788
00:41:23,120 --> 00:41:25,320
Speaker 2: housing market gives them a bit of a stay of

789
00:41:25,360 --> 00:41:27,319
Speaker 2: execution because they can look at house prices and say, well,

790
00:41:27,320 --> 00:41:29,120
Speaker 2: Sydney house prices are falling at a twelve percent on

791
00:41:29,160 --> 00:41:31,759
Speaker 2: your raid, and Melbourne house prices are falling by the

792
00:41:31,760 --> 00:41:34,680
Speaker 2: same margin, and that's most of the country. Maybe we'll

793
00:41:34,680 --> 00:41:37,280
Speaker 2: get a need of wealth effect, and maybe that'll tax

794
00:41:37,840 --> 00:41:42,080
Speaker 2: or dampened consumption and spending and maybe put down pressure

795
00:41:42,080 --> 00:41:44,279
Speaker 2: on inflation. But maybe not. Maybe if we keep on

796
00:41:44,280 --> 00:41:47,080
Speaker 2: inputting all these margarets and the politicians keep on spending

797
00:41:47,080 --> 00:41:49,959
Speaker 2: like drunken sailors, and there's this huge waste and inefficiency,

798
00:41:50,360 --> 00:41:53,600
Speaker 2: they will continue to be price pressures and they'll continue

799
00:41:53,640 --> 00:41:56,440
Speaker 2: to be in productivity adjusted wage growth. It drives high

800
00:41:56,480 --> 00:42:00,000
Speaker 2: inflation because we're increasing minimum wages by massive margins as

801
00:42:00,000 --> 00:42:04,520
Speaker 2: another example, And so then you just have this slow

802
00:42:04,560 --> 00:42:05,319
Speaker 2: moving train work.

803
00:42:05,600 --> 00:42:08,320
Speaker 1: But do you think that the Reserve Bank will actually

804
00:42:08,760 --> 00:42:11,000
Speaker 1: therefore make a rate rise in August? It mean you're

805
00:42:11,040 --> 00:42:14,000
Speaker 1: expecting to see a higher inflation number in the June

806
00:42:14,000 --> 00:42:16,239
Speaker 1: thirty numbers come out there in July. You're expecting that,

807
00:42:16,600 --> 00:42:18,920
Speaker 1: We're all expecting that. Do you think they'll just sayble

808
00:42:18,920 --> 00:42:20,799
Speaker 1: to sit and wait. Because house prices are going down,

809
00:42:20,880 --> 00:42:23,719
Speaker 1: people feeling less wealthy, therefore they're going to tend to

810
00:42:23,760 --> 00:42:25,440
Speaker 1: spend less money. Do you think that I.

811
00:42:25,440 --> 00:42:27,799
Speaker 2: Don't have a strong view on August. I do have

812
00:42:27,840 --> 00:42:30,480
Speaker 2: a strong view that the inflation battle is going to

813
00:42:30,520 --> 00:42:33,719
Speaker 2: be long lived and difficult and painful. So whether they

814
00:42:33,840 --> 00:42:36,480
Speaker 2: raise rates or not in August is kind of irrelevant

815
00:42:36,480 --> 00:42:39,319
Speaker 2: to me personally. What I'm much more focused on is

816
00:42:39,360 --> 00:42:43,520
Speaker 2: where does the cycle go, what's the direction of travel?

817
00:42:44,280 --> 00:42:48,279
Speaker 2: You know, how high could rates ultimately go and what

818
00:42:48,360 --> 00:42:50,680
Speaker 2: are the consequences of that? And I think it's going

819
00:42:50,719 --> 00:42:53,279
Speaker 2: to be pained for property, It's going to be a

820
00:42:53,320 --> 00:42:55,359
Speaker 2: much lower rate of population growth. I think you're going

821
00:42:55,400 --> 00:42:58,600
Speaker 2: to see a radical reduction in migration. I think you're

822
00:42:58,600 --> 00:43:01,480
Speaker 2: going to get a really polarize seeing political debate because everyone,

823
00:43:01,480 --> 00:43:03,080
Speaker 2: and we're seeing this right now, everyone's going to be

824
00:43:03,080 --> 00:43:06,319
Speaker 2: blaming everybody else here and now you charmers now being

825
00:43:06,400 --> 00:43:08,920
Speaker 2: to say, hey, these precipitous has pluce falls. That's not

826
00:43:08,960 --> 00:43:13,440
Speaker 2: our fault, right, see the RBA's fault. And the RBS say, well, actually,

827
00:43:13,520 --> 00:43:17,560
Speaker 2: you know you've created an unprecedented investment Uncertainly I mean,

828
00:43:17,600 --> 00:43:20,759
Speaker 2: you just we had very clear rules of the game

829
00:43:20,800 --> 00:43:23,560
Speaker 2: that have existed for decades, and you just chucked the

830
00:43:23,640 --> 00:43:26,320
Speaker 2: rules out the door and said none of We're establishing

831
00:43:26,360 --> 00:43:27,960
Speaker 2: a new game because we want to control the game,

832
00:43:28,000 --> 00:43:30,799
Speaker 2: because we're you know, we're the real big dogs, right,

833
00:43:30,840 --> 00:43:36,440
Speaker 2: We're just going to be mafiosa style, taking money from here, there,

834
00:43:36,480 --> 00:43:39,359
Speaker 2: and everywhere to feather our own nests and also till

835
00:43:39,400 --> 00:43:41,239
Speaker 2: the probability is in our favor, because we want to

836
00:43:41,320 --> 00:43:44,360
Speaker 2: tax and take from the private sector because that's the

837
00:43:44,440 --> 00:43:47,520
Speaker 2: only way we know how to make money. So I

838
00:43:47,560 --> 00:43:52,560
Speaker 2: think that's devastating for confidence and sentiment. And you want

839
00:43:52,600 --> 00:43:55,880
Speaker 2: people to have the comfort and confidence to establish businesses,

840
00:43:56,200 --> 00:43:59,120
Speaker 2: to spend money to build world class products and services,

841
00:43:59,320 --> 00:44:02,480
Speaker 2: to high stuff to drive future growth, and that's going

842
00:44:02,520 --> 00:44:03,320
Speaker 2: to be very difficult.

843
00:44:03,560 --> 00:44:05,440
Speaker 1: It's talk about America because you spend a lot of

844
00:44:05,480 --> 00:44:08,880
Speaker 1: time over that way. You visit lots of countries. In relationship,

845
00:44:08,920 --> 00:44:13,080
Speaker 1: you could of our business and you know often pitching,

846
00:44:13,520 --> 00:44:16,799
Speaker 1: you know your your your how will your products? Your

847
00:44:17,160 --> 00:44:19,359
Speaker 1: list of products there, which is a growing list. They

848
00:44:19,440 --> 00:44:22,960
Speaker 1: go on forever. And I actually know Luke ring your

849
00:44:22,960 --> 00:44:27,600
Speaker 1: bell the other day for an ETF fun, you guys,

850
00:44:28,000 --> 00:44:32,560
Speaker 1: is easier fine, Luke Bora said, is he Luky? How

851
00:44:32,600 --> 00:44:33,080
Speaker 1: do you get that one?

852
00:44:33,120 --> 00:44:33,200
Speaker 2: In?

853
00:44:34,120 --> 00:44:35,759
Speaker 1: What are they saying? What are they saying in other

854
00:44:35,760 --> 00:44:36,520
Speaker 1: countries about us?

855
00:44:36,520 --> 00:44:36,680
Speaker 2: Mate?

856
00:44:36,760 --> 00:44:39,000
Speaker 1: Like, what are they what do they think about it?

857
00:44:39,200 --> 00:44:40,840
Speaker 2: I think the interesting thing is there's a lot of

858
00:44:40,960 --> 00:44:43,800
Speaker 2: positivity and optimism in the US. So for all the

859
00:44:43,920 --> 00:44:46,839
Speaker 2: visceral hatred of Trump and the Trump derangement syndrome, which

860
00:44:46,840 --> 00:44:50,160
Speaker 2: is a real thing, It's amazing how even very smart

861
00:44:50,160 --> 00:44:55,279
Speaker 2: people can't divorce themselves from their sort of primal distaste

862
00:44:55,360 --> 00:44:58,880
Speaker 2: for the Orange Man, notwithstanding that some of these policies

863
00:44:59,320 --> 00:45:03,400
Speaker 2: may be are really quite tractable and durable and important.

864
00:45:03,400 --> 00:45:07,280
Speaker 2: I mean, he has completely single handedly rewritten the rules

865
00:45:07,280 --> 00:45:11,160
Speaker 2: of the Middle East, and he's rewired all the relationships

866
00:45:11,160 --> 00:45:13,880
Speaker 2: in the Middle East. He's kind of created this unwitting

867
00:45:14,000 --> 00:45:17,560
Speaker 2: coalition between Israel and all of Iran's contiguous neighbors. I

868
00:45:17,600 --> 00:45:19,920
Speaker 2: was speaking at lunch yesday to one hundred and fifty people,

869
00:45:20,160 --> 00:45:22,720
Speaker 2: mostly clients, and one guy got up and said, oh,

870
00:45:23,160 --> 00:45:25,040
Speaker 2: sounds like you like Trump. I mean, he's a coward.

871
00:45:25,080 --> 00:45:27,120
Speaker 2: He didn't put boots on the ground. The Iranians won,

872
00:45:27,360 --> 00:45:30,439
Speaker 2: and I was like, dude, the Iranians are all dead.

873
00:45:30,600 --> 00:45:34,960
Speaker 2: Like that regime was largely eliminated. They've had most of

874
00:45:35,000 --> 00:45:41,000
Speaker 2: their offensive kinetic military capability destroyed, they have had all

875
00:45:41,040 --> 00:45:46,239
Speaker 2: of their nuclear facilities destroyed. They have no enrichment capacity whatsoever.

876
00:45:47,280 --> 00:45:51,279
Speaker 2: They have very limited to any power projection capabilities. And

877
00:45:51,440 --> 00:45:54,880
Speaker 2: if you think Trump's lost, He's become the biggest export

878
00:45:54,960 --> 00:45:57,759
Speaker 2: of oil in the world. And moreover the price of

879
00:45:57,800 --> 00:46:00,719
Speaker 2: oil has gone from seventy one bucks a barrel to

880
00:46:00,760 --> 00:46:02,400
Speaker 2: one hundred and twenty one bucks a barrel, and whereas

881
00:46:02,400 --> 00:46:04,280
Speaker 2: it today, it's back down at seventy one bucks a barrel.

882
00:46:04,560 --> 00:46:07,520
Speaker 2: Trump won comprehensively. I mean, it was the most one

883
00:46:07,560 --> 00:46:10,319
Speaker 2: sided conflict you can possibly ever imagine. They didn't have

884
00:46:10,320 --> 00:46:14,280
Speaker 2: a single casualty in Iran. There are a few people

885
00:46:14,280 --> 00:46:17,080
Speaker 2: that were injured at verous bases around the US. So

886
00:46:17,880 --> 00:46:21,480
Speaker 2: I would say we're seeing in the US the reassertion

887
00:46:21,680 --> 00:46:25,960
Speaker 2: in a fairly unprecedented way of US geostrategic primacy and

888
00:46:26,200 --> 00:46:30,840
Speaker 2: US economic exceptionalism. And people in the US, whether they

889
00:46:31,040 --> 00:46:32,799
Speaker 2: like or hate Trump, and obviously a lot of people

890
00:46:32,800 --> 00:46:37,799
Speaker 2: hate him, they I think are generally in agreement that

891
00:46:37,880 --> 00:46:40,799
Speaker 2: they have the most business friendly president in history, and

892
00:46:40,800 --> 00:46:43,000
Speaker 2: he's not perfect, like you know, nobody. I don't like

893
00:46:43,040 --> 00:46:46,440
Speaker 2: the front running and the insider trading that you sometimes

894
00:46:46,719 --> 00:46:48,760
Speaker 2: see from what it seems to be a vous sporous,

895
00:46:50,280 --> 00:46:54,480
Speaker 2: very informationally porous administration. So that sort of stuff is

896
00:46:55,080 --> 00:46:59,080
Speaker 2: quite unseemly. But the reality is, if you want to

897
00:46:59,160 --> 00:47:02,000
Speaker 2: establish a business in the US, you've got the most

898
00:47:02,160 --> 00:47:04,880
Speaker 2: business friendly climate that people have seen in our lifetimes.

899
00:47:04,880 --> 00:47:08,239
Speaker 2: And that's why the information technology or the IT or

900
00:47:08,280 --> 00:47:13,640
Speaker 2: tech oligarchy, who many of them were Democrat pumpers, have

901
00:47:13,760 --> 00:47:17,200
Speaker 2: all coalesced behind Trump. So you know, most of the

902
00:47:17,239 --> 00:47:20,400
Speaker 2: tech oligarchy are now very partial to and supportive of

903
00:47:20,440 --> 00:47:23,400
Speaker 2: Trump because they recognize that he's out there trying to

904
00:47:23,400 --> 00:47:25,919
Speaker 2: help them win. He wants to win, that's his game.

905
00:47:26,440 --> 00:47:31,800
Speaker 2: So I would say if you juxtapose that ostensibly positive

906
00:47:33,160 --> 00:47:38,840
Speaker 2: economic and business dynamic against say the UK, where the

907
00:47:38,840 --> 00:47:41,319
Speaker 2: country feels like it's in depression, it's a very very

908
00:47:41,320 --> 00:47:45,040
Speaker 2: different dynamic. And the US economy is as strong as

909
00:47:45,040 --> 00:47:47,600
Speaker 2: ten men. I mean, our big economic ideas over the

910
00:47:47,640 --> 00:47:50,920
Speaker 2: last twelve months have been that ais inflationy notor deflationing,

911
00:47:51,040 --> 00:47:54,000
Speaker 2: or great jobs rather than destroy jobs, and that Trump's

912
00:47:54,000 --> 00:47:57,960
Speaker 2: tax cuts would support growth, and that combined with the

913
00:47:58,040 --> 00:48:01,680
Speaker 2: unprecedented AI cap x, which we argued would be much

914
00:48:01,719 --> 00:48:04,040
Speaker 2: much bigger than people think, because we thought that the

915
00:48:04,120 --> 00:48:06,960
Speaker 2: hyperscalas were lying about the true extent of the capex

916
00:48:07,000 --> 00:48:09,120
Speaker 2: because they didn't want to tip off their rivals how

917
00:48:09,160 --> 00:48:10,920
Speaker 2: much they wanted to spend, because they've all got to

918
00:48:11,040 --> 00:48:14,560
Speaker 2: compete for the same people chips, memory cards, compute, and

919
00:48:14,600 --> 00:48:18,000
Speaker 2: resources to build data centers. We argue that the capex boom,

920
00:48:18,000 --> 00:48:22,239
Speaker 2: combined with the tax cuts, combined with the massive deregulation

921
00:48:23,239 --> 00:48:26,280
Speaker 2: dynamic in the US, would power a very very strong

922
00:48:26,320 --> 00:48:28,480
Speaker 2: economy that would then force the Fed to lift rates.

923
00:48:28,560 --> 00:48:30,160
Speaker 2: The market a year ago, when we were saying this,

924
00:48:30,440 --> 00:48:32,440
Speaker 2: and I think I've said it here before, the market

925
00:48:32,480 --> 00:48:34,160
Speaker 2: was pricing one hundred bases of points of rate cuts

926
00:48:34,160 --> 00:48:36,480
Speaker 2: from the Fed. No One people thought I was a

927
00:48:36,560 --> 00:48:37,920
Speaker 2: nut case when I was saying, listen, we think the

928
00:48:37,960 --> 00:48:39,960
Speaker 2: Fed's going to hike in twenty six street seven twenty eight.

929
00:48:40,280 --> 00:48:42,680
Speaker 2: The bond market was pricing a zero percent probability of

930
00:48:42,760 --> 00:48:45,160
Speaker 2: rate hikes in twenty six steeks twenty seven, twenty eight.

931
00:48:45,239 --> 00:48:47,440
Speaker 2: Today they are now pricing a hike and they're in

932
00:48:47,480 --> 00:48:50,359
Speaker 2: fact pricing almost two hikes from the FED later this year,

933
00:48:50,640 --> 00:48:54,120
Speaker 2: probably after the midterm elections. So I think the US

934
00:48:54,200 --> 00:48:56,440
Speaker 2: is making out like bandits right now. People are positive.

935
00:48:57,120 --> 00:48:59,960
Speaker 2: I think they look incredulously at Australia and say, why

936
00:49:00,120 --> 00:49:02,640
Speaker 2: on Earth, as the wonder down owner, the best performing

937
00:49:02,680 --> 00:49:04,360
Speaker 2: economy in the fricking world.

938
00:49:04,200 --> 00:49:07,520
Speaker 1: Over the last forty years, thirty.

939
00:49:06,760 --> 00:49:12,720
Speaker 2: Like this economic miracle, why have they suddenly lumbered business

940
00:49:12,719 --> 00:49:16,240
Speaker 2: creators and investors with the highest CGT rate on the planet.

941
00:49:16,640 --> 00:49:19,799
Speaker 2: And why have you slammed small businesses with a thirty

942
00:49:19,800 --> 00:49:22,760
Speaker 2: percent tax on their trusts when that's a key vehicle

943
00:49:22,800 --> 00:49:24,759
Speaker 2: for small business organizations They all do.

944
00:49:25,120 --> 00:49:29,920
Speaker 1: It's not just for rich people plumbers, electricians like shop tax.

945
00:49:30,000 --> 00:49:33,120
Speaker 2: What's the cost of closing down the trust and re

946
00:49:33,360 --> 00:49:36,840
Speaker 2: establishing and reorganized or getting evaluation or getting evaluation. I

947
00:49:36,880 --> 00:49:39,080
Speaker 2: mean you're talking about tens of thousands of dollars potentially,

948
00:49:39,520 --> 00:49:42,759
Speaker 2: So it's just ridiculous. And the conclusion is this is

949
00:49:42,840 --> 00:49:48,400
Speaker 2: again the stealth socialism that we've seen as send and

950
00:49:48,440 --> 00:49:50,600
Speaker 2: then fail throughout much of the world. We saw it

951
00:49:50,680 --> 00:49:52,040
Speaker 2: under buy it and we've sent it in Canada, you

952
00:49:52,120 --> 00:49:53,640
Speaker 2: sent in the UK, you saw it under a turn

953
00:49:53,680 --> 00:49:58,600
Speaker 2: in New Zealand and it's all ultimately failed.

954
00:49:58,800 --> 00:50:01,880
Speaker 1: Do you think the US today, whilst Trump is all

955
00:50:01,920 --> 00:50:04,120
Speaker 1: those things you just mentioned like he's he can be

956
00:50:04,160 --> 00:50:07,359
Speaker 1: a bit annoying, can be a bit confusing, he can

957
00:50:07,400 --> 00:50:10,400
Speaker 1: be a bit come across as arrogant, et cetera. The

958
00:50:10,400 --> 00:50:12,160
Speaker 1: a's a whole heap of things. And maybe we don't

959
00:50:12,200 --> 00:50:15,160
Speaker 1: like his particular form of politics, But do you think

960
00:50:15,160 --> 00:50:19,680
Speaker 1: that his view on leading a country's economic might is

961
00:50:19,680 --> 00:50:21,920
Speaker 1: something that the rest of the Walshall borrow that should

962
00:50:22,000 --> 00:50:26,680
Speaker 1: is economics, prosperity. Wealth is important, but is prosperity a

963
00:50:26,840 --> 00:50:32,440
Speaker 1: number one outcome for a country's you know, national pride

964
00:50:32,440 --> 00:50:36,799
Speaker 1: and strength that a politician should be aiming for economic prosperity.

965
00:50:37,640 --> 00:50:41,800
Speaker 2: I mean, he just wants to compete, win and maximize prosperity.

966
00:50:41,800 --> 00:50:44,120
Speaker 2: And I think that's the right objective.

967
00:50:44,160 --> 00:50:45,759
Speaker 1: It's pretty simple, but it makes sense.

968
00:50:45,800 --> 00:50:48,279
Speaker 2: A rising tide lifts all boats. And you know, the

969
00:50:48,320 --> 00:50:51,440
Speaker 2: most prosperous countries can provide for the poorest people.

970
00:50:51,760 --> 00:50:55,000
Speaker 1: Because that's how organized welfare by being prosperous.

971
00:50:54,520 --> 00:50:58,920
Speaker 2: Correct and not by borrowing that correct. And you know,

972
00:50:59,040 --> 00:51:04,280
Speaker 2: his I think economic calculus is pretty distilled and simple

973
00:51:04,320 --> 00:51:07,240
Speaker 2: and so far as compete and win, and by winning

974
00:51:07,920 --> 00:51:11,960
Speaker 2: you can generate income and wealth, and with that resource

975
00:51:12,239 --> 00:51:16,239
Speaker 2: you can provide for the community more broadly, but I

976
00:51:16,280 --> 00:51:22,600
Speaker 2: think he has a kind of primal understanding what is

977
00:51:22,640 --> 00:51:26,560
Speaker 2: required to succeed in the private sector, and what he

978
00:51:26,680 --> 00:51:31,480
Speaker 2: knows on a human level is that government interference and

979
00:51:31,520 --> 00:51:35,759
Speaker 2: government's trying to stand in the wheel of entrepreneurial progress

980
00:51:36,320 --> 00:51:38,600
Speaker 2: is typically suboptimal, and that's what I think he's trying

981
00:51:38,640 --> 00:51:44,320
Speaker 2: to eliminate. He's also, I think, trying to remove external

982
00:51:44,360 --> 00:51:48,720
Speaker 2: interference in the US, particularly in his sphere of influence.

983
00:51:48,719 --> 00:51:52,040
Speaker 2: We've seen this in Venezuela and that campaign's been remarkably successful.

984
00:51:52,280 --> 00:51:55,760
Speaker 2: He's turned a cross as more recently to Cuba, and

985
00:51:55,920 --> 00:51:59,400
Speaker 2: you know, Iran was clearly the most misanthropic actor globally.

986
00:51:59,400 --> 00:52:03,879
Speaker 2: That was threight Western prosperity and they've neutralized I think,

987
00:52:03,920 --> 00:52:06,799
Speaker 2: around very effectively. So I think his program has been

988
00:52:06,840 --> 00:52:10,919
Speaker 2: pretty successful. I think as an individual he's a much

989
00:52:10,960 --> 00:52:14,120
Speaker 2: more complex cap than Australians and particularly give him credit for.

990
00:52:14,200 --> 00:52:17,360
Speaker 2: It's interesting when you talk to Ozzie's about Trump, almost

991
00:52:17,400 --> 00:52:20,680
Speaker 2: everyone qualifies anything they say by saying something like both

992
00:52:20,680 --> 00:52:23,080
Speaker 2: of us have said today, which is listen, I know

993
00:52:23,160 --> 00:52:24,839
Speaker 2: he's not everyone's cup of tea, or I know he's

994
00:52:24,840 --> 00:52:27,719
Speaker 2: a bit crazy, or I don't personally like him, and

995
00:52:27,719 --> 00:52:30,799
Speaker 2: that's fair enough. But when you speak about Trump across

996
00:52:30,840 --> 00:52:32,319
Speaker 2: the rest of the world, people are much more I

997
00:52:32,320 --> 00:52:36,480
Speaker 2: think focused on his actions and decision making, progress, effectiveness

998
00:52:36,880 --> 00:52:41,000
Speaker 2: and the outcomes. And even from Democrats in the US,

999
00:52:41,520 --> 00:52:44,080
Speaker 2: I think they acknowledge that the economy has been a

1000
00:52:44,120 --> 00:52:46,920
Speaker 2: big beneficiary of the shift. And there's a massive comparing

1001
00:52:46,960 --> 00:52:49,959
Speaker 2: contrast taking place in the US where you've got two

1002
00:52:50,040 --> 00:52:53,400
Speaker 2: systems and two models in the form of California and

1003
00:52:53,480 --> 00:52:55,320
Speaker 2: New York on the one hand, and Florida and Texas

1004
00:52:55,360 --> 00:52:58,000
Speaker 2: on the other, and Trump's clearly aligned with the latter,

1005
00:52:58,560 --> 00:53:04,160
Speaker 2: and the business for only enterprise orientated, relatively free market

1006
00:53:04,400 --> 00:53:06,640
Speaker 2: as solutions are winning, and that's what he's focused on.

1007
00:53:07,960 --> 00:53:09,919
Speaker 1: Do you think, therefore, because this is where I'm trying

1008
00:53:09,920 --> 00:53:12,279
Speaker 1: to get to, do you think the government's maybe in

1009
00:53:12,280 --> 00:53:14,839
Speaker 1: the UK and other places, particularly here in Australia, they're

1010
00:53:14,880 --> 00:53:17,680
Speaker 1: overthinking it and it should be more simple. They just say,

1011
00:53:17,920 --> 00:53:19,840
Speaker 1: get the economy prosperous and we can look after all,

1012
00:53:19,840 --> 00:53:21,759
Speaker 1: the people need welfare and help them all out. We

1013
00:53:21,800 --> 00:53:24,239
Speaker 1: can do the you know, if you're disabled, or you're

1014
00:53:24,480 --> 00:53:26,239
Speaker 1: you know, you're you don't have a job, or whatever

1015
00:53:26,239 --> 00:53:28,960
Speaker 1: the case, maybe we can help you. But that's a

1016
00:53:29,000 --> 00:53:32,680
Speaker 1: pretty simple way of looking at things. And sometimes the

1017
00:53:32,840 --> 00:53:35,239
Speaker 1: simplicity of these things we can test that we've got

1018
00:53:35,280 --> 00:53:38,600
Speaker 1: to say, no, that's it's got to be more nuanced.

1019
00:53:38,400 --> 00:53:40,520
Speaker 1: He doesn't seem be nuanced. He just seems to be said,

1020
00:53:40,560 --> 00:53:43,600
Speaker 1: we'll get ourselves to be successful, and we'll make lots

1021
00:53:43,640 --> 00:53:45,759
Speaker 1: of money, and I'll drop the tax rates to make

1022
00:53:45,800 --> 00:53:48,680
Speaker 1: sure everybody's incentivized to do that. I'll get productivity up

1023
00:53:48,680 --> 00:53:52,720
Speaker 1: because their productivity is up relative to ours is incredible relative.

1024
00:53:52,560 --> 00:53:55,719
Speaker 2: Like where no, relative to everyone in the world, US productivity.

1025
00:53:55,239 --> 00:53:58,279
Speaker 1: Is so this simple stuff has worked. Why does it

1026
00:53:58,560 --> 00:54:01,480
Speaker 1: and why? What do you think it is here in

1027
00:54:01,520 --> 00:54:04,080
Speaker 1: our mentality that our politicians don't accept that were just

1028
00:54:04,640 --> 00:54:05,360
Speaker 1: and or adopted.

1029
00:54:05,600 --> 00:54:07,120
Speaker 2: Well, I think we've lost sight of the fact that

1030
00:54:08,120 --> 00:54:12,719
Speaker 2: what powers prosperity and living standards is success. We want

1031
00:54:12,719 --> 00:54:15,600
Speaker 2: to take and tax success, whereas in the US they

1032
00:54:15,640 --> 00:54:20,160
Speaker 2: have a deep set of genetic understanding that everything is

1033
00:54:20,200 --> 00:54:25,000
Speaker 2: about success. You know, Musk has probably created one hundred

1034
00:54:25,080 --> 00:54:28,200
Speaker 2: trillion dollars plus of welfare for the community at large.

1035
00:54:28,200 --> 00:54:32,040
Speaker 2: I mean, he's the guy that has electrified automobiles, he's

1036
00:54:32,080 --> 00:54:36,280
Speaker 2: given us electronic payment systems, he's given us cheap Internet

1037
00:54:36,280 --> 00:54:40,200
Speaker 2: connectivity for every person on the planet, and he's now

1038
00:54:40,239 --> 00:54:43,640
Speaker 2: giving us the capacity to develop an interplanetary species. So

1039
00:54:44,040 --> 00:54:46,400
Speaker 2: the welfare he might have made a trillion dollars, but

1040
00:54:46,480 --> 00:54:48,360
Speaker 2: he's gifted to the rest of the world one hundred

1041
00:54:48,520 --> 00:54:53,480
Speaker 2: x that, possibly more. And we want to motivate and

1042
00:54:53,840 --> 00:54:57,680
Speaker 2: mobilize and incent every Musk out there. And you don't

1043
00:54:57,800 --> 00:55:01,960
Speaker 2: do that by crushing productivity and prosperity, which is what

1044
00:55:02,040 --> 00:55:04,480
Speaker 2: the other side want to do. And I think you

1045
00:55:04,560 --> 00:55:08,040
Speaker 2: lose sight of the need for productivity and prosperity and

1046
00:55:08,400 --> 00:55:11,520
Speaker 2: the need to cultivate success when you're so wealthy and

1047
00:55:11,560 --> 00:55:13,920
Speaker 2: you're so rich that you just want to argue about

1048
00:55:13,960 --> 00:55:16,120
Speaker 2: cutting up the pie rather than growing as a country,

1049
00:55:16,440 --> 00:55:17,799
Speaker 2: US as a country. Yeah, And I think that's what

1050
00:55:17,800 --> 00:55:20,719
Speaker 2: we've been doing prevince Ball. Yeah yeah. And I think

1051
00:55:20,840 --> 00:55:25,680
Speaker 2: these entitled professional politicians are just you know, want to

1052
00:55:25,719 --> 00:55:28,440
Speaker 2: rape in pillage from the private sector in order to

1053
00:55:29,200 --> 00:55:34,680
Speaker 2: buffer their own pockets, and that's the problem, and you

1054
00:55:34,760 --> 00:55:37,040
Speaker 2: only realize it's a problem when you start to pay

1055
00:55:37,080 --> 00:55:41,640
Speaker 2: the consequences of that problem in the form of rates, taxes,

1056
00:55:41,800 --> 00:55:43,560
Speaker 2: cost of living, which is I think what's playing out

1057
00:55:43,600 --> 00:55:43,920
Speaker 2: right now.

1058
00:55:44,080 --> 00:55:45,480
Speaker 1: You've had a lot to say in the past about

1059
00:55:45,640 --> 00:55:51,160
Speaker 1: cryptocurrency too expensive. We've seen bitcoyn more recently come back

1060
00:55:51,200 --> 00:55:54,560
Speaker 1: and really sort of for quite a lot later over

1061
00:55:54,600 --> 00:55:58,400
Speaker 1: the last of six to two months. What is your

1062
00:55:58,840 --> 00:56:02,359
Speaker 1: hypothesis on crypto now where you stand, Yeah, I think

1063
00:56:02,360 --> 00:56:05,560
Speaker 1: it's pretty worthless. I don't really see any utility from

1064
00:56:05,560 --> 00:56:08,239
Speaker 1: crypto at all. It's not a stable store of wealth.

1065
00:56:08,239 --> 00:56:09,920
Speaker 1: It's the most volatile a set that exists.

1066
00:56:10,200 --> 00:56:13,000
Speaker 2: It's not government guaranteed, so in any crisis it can

1067
00:56:13,080 --> 00:56:16,800
Speaker 2: get eliminated. It's not cryptographically secured. I've argued for years

1068
00:56:16,840 --> 00:56:21,080
Speaker 2: that quantum computing could threaten the encryption that protects blockchain

1069
00:56:21,120 --> 00:56:24,319
Speaker 2: and bitcoin. I think people are getting very nervous about

1070
00:56:24,360 --> 00:56:28,320
Speaker 2: that right now. And it's not an inflation hedge. In

1071
00:56:28,360 --> 00:56:31,080
Speaker 2: the first big inflation crisis, after the pandemic and after

1072
00:56:31,080 --> 00:56:35,839
Speaker 2: the GFC, bigcoin fell eighty percent, and I note now

1073
00:56:36,200 --> 00:56:38,440
Speaker 2: this week it has been trading down around fifty eight

1074
00:56:38,440 --> 00:56:44,360
Speaker 2: thousand dollars. So I think you're going to see the

1075
00:56:45,480 --> 00:56:49,880
Speaker 2: momentum and fidelity to the crypto cause over time decay,

1076
00:56:50,560 --> 00:56:53,760
Speaker 2: and I just don't see what the value of crypto

1077
00:56:53,880 --> 00:56:57,880
Speaker 2: is period. If you want digital currencies, nation states and

1078
00:56:57,920 --> 00:57:02,560
Speaker 2: central banks will over time create government guaranteed digital currencies.

1079
00:57:04,360 --> 00:57:08,280
Speaker 2: But you know, I think it's pretty preposterous that this cryptocurrency, bigcoin,

1080
00:57:08,360 --> 00:57:13,120
Speaker 2: was created by a guy Satoshi San who apparently has

1081
00:57:13,200 --> 00:57:15,279
Speaker 2: billions and billions of dollars is stuff but has never

1082
00:57:15,360 --> 00:57:21,160
Speaker 2: utilized it, and protected blockchain with an encryption technology SH

1083
00:57:21,320 --> 00:57:24,920
Speaker 2: two five six, which was developed by the National Security Agency.

1084
00:57:26,200 --> 00:57:31,240
Speaker 2: And my best guess is that it's a Western intelligence

1085
00:57:31,240 --> 00:57:34,040
Speaker 2: honey trap that around the dawn of the time of

1086
00:57:34,040 --> 00:57:36,840
Speaker 2: the Internet and the widespread adoption of the incident and

1087
00:57:37,000 --> 00:57:39,760
Speaker 2: the advent of the idea of digital currencies, they thought

1088
00:57:39,760 --> 00:57:43,040
Speaker 2: to themselves, well, any non democratic actor is going to

1089
00:57:43,080 --> 00:57:45,640
Speaker 2: want to keep wealth outside of the banking system, outside

1090
00:57:45,640 --> 00:57:49,280
Speaker 2: of the reach of nation states via these cryptocurrencies, so

1091
00:57:49,280 --> 00:57:51,920
Speaker 2: why not try and control them. But yeah, I have

1092
00:57:52,720 --> 00:57:55,200
Speaker 2: no cryptocurrency, have never had any exposure to it, and

1093
00:57:55,240 --> 00:57:57,360
Speaker 2: I don't really understand it.

1094
00:57:57,440 --> 00:57:59,640
Speaker 1: Well, it's going to say it's because you don't understand it,

1095
00:58:01,000 --> 00:58:03,200
Speaker 1: and by the way, I don't either. I find it

1096
00:58:03,240 --> 00:58:06,600
Speaker 1: incredibly difficult to understand the point of it. Board about gold.

1097
00:58:07,880 --> 00:58:09,840
Speaker 2: Well, one of our big ideas a year ago was

1098
00:58:10,520 --> 00:58:12,120
Speaker 2: everyone in the world was talking about how much you know,

1099
00:58:12,160 --> 00:58:14,720
Speaker 2: the hated Trump and how we're going through this forever

1100
00:58:15,440 --> 00:58:18,600
Speaker 2: dedollarization trait. And then the AFR I wrote a year

1101
00:58:18,600 --> 00:58:21,760
Speaker 2: ago forget de dollarization things. You wrote this, Yeah, I wrote,

1102
00:58:22,560 --> 00:58:24,840
Speaker 2: I don't know anyone else globally who uses this term,

1103
00:58:24,840 --> 00:58:27,120
Speaker 2: but I said, you should be talking about not de dollarization,

1104
00:58:27,600 --> 00:58:31,920
Speaker 2: you should be talking about redollarization. Why because Trump is

1105
00:58:31,920 --> 00:58:33,560
Speaker 2: going to go out there and swing hard, and he's

1106
00:58:33,600 --> 00:58:40,320
Speaker 2: going to reassert his big dog, hegemonic, geostrategically dominant status,

1107
00:58:40,320 --> 00:58:42,880
Speaker 2: which is exactly what he's done. The US economy is

1108
00:58:42,880 --> 00:58:45,760
Speaker 2: going to be the central clearing house for all AI spending,

1109
00:58:45,800 --> 00:58:49,360
Speaker 2: AI research, AI innovation, and AI profits. They're going to

1110
00:58:49,360 --> 00:58:52,080
Speaker 2: be the big beneficiary, not China or not Russia, or

1111
00:58:52,120 --> 00:58:55,080
Speaker 2: not France or Germany. It's all about the US and

1112
00:58:55,200 --> 00:59:01,680
Speaker 2: this revolutionary technology and that ultimately is going to create

1113
00:59:01,720 --> 00:59:05,200
Speaker 2: a lot of economic success and inflation, which is going

1114
00:59:05,240 --> 00:59:08,440
Speaker 2: to force US interest rates higher and higher interstrates should

1115
00:59:08,440 --> 00:59:11,960
Speaker 2: push push the US dollar higher, and just more recently

1116
00:59:12,040 --> 00:59:16,760
Speaker 2: we've seen strong US dollar appreciation. And what was happening

1117
00:59:16,920 --> 00:59:21,880
Speaker 2: under the de dollarization dynamic is when Russia invaded the Ukraine,

1118
00:59:22,160 --> 00:59:25,400
Speaker 2: the West froze pudins US dollar reserves, and at that

1119
00:59:25,440 --> 00:59:29,000
Speaker 2: particular point in time, every non democratic state in the

1120
00:59:29,000 --> 00:59:31,880
Speaker 2: world woke up and realized that they could not keep

1121
00:59:32,000 --> 00:59:35,440
Speaker 2: US dollars as their liquidity source of last resort, and

1122
00:59:35,480 --> 00:59:37,480
Speaker 2: so they had to sell it. So all the non

1123
00:59:37,480 --> 00:59:39,959
Speaker 2: democracies of the world have been selling dollars to buy

1124
00:59:39,960 --> 00:59:45,520
Speaker 2: gold and crypto in some cases, and at some point

1125
00:59:45,520 --> 00:59:47,919
Speaker 2: that runs its course. At some point they sell the dollars,

1126
00:59:47,960 --> 00:59:50,360
Speaker 2: they buy the gold, and they're done. At that juncture,

1127
00:59:50,400 --> 00:59:54,680
Speaker 2: the natural economic forces that determine the price of gold

1128
00:59:54,720 --> 00:59:57,640
Speaker 2: and the exchange rate reassert themselves.

1129
00:59:58,160 --> 00:59:59,560
Speaker 1: That's like any outset class we're going.

1130
01:00:00,040 --> 01:00:02,960
Speaker 2: Yeah, So the de dollarization theme was like a picture

1131
01:00:02,960 --> 01:00:06,760
Speaker 2: of Python, and I argued a year ago that eventually

1132
01:00:06,760 --> 01:00:09,440
Speaker 2: you're going to see redollarization as people wake up and

1133
01:00:09,480 --> 01:00:12,680
Speaker 2: realize that the US dollar actually is the global reserve currency.

1134
01:00:12,680 --> 01:00:15,160
Speaker 2: It's not Chinese currency, it's not crypto it's the US

1135
01:00:15,240 --> 01:00:19,120
Speaker 2: recond dollar, which is backed by a military that's stronger

1136
01:00:19,120 --> 01:00:21,520
Speaker 2: than the rest of the will combine, and that is

1137
01:00:21,640 --> 01:00:25,600
Speaker 2: completely unassailable and also is currently being run by an

1138
01:00:25,640 --> 01:00:29,920
Speaker 2: administration that is hell bent on asserting not just geostrategic

1139
01:00:29,960 --> 01:00:34,840
Speaker 2: but also economic promising. And so that's bad for gold

1140
01:00:35,880 --> 01:00:39,160
Speaker 2: because you know, the bid for gold at some point

1141
01:00:39,600 --> 01:00:44,000
Speaker 2: deteriorates and that demand disappears because the diversification is done.

1142
01:00:44,240 --> 01:00:46,800
Speaker 2: So I suspect that's what they've all bought. They've bought,

1143
01:00:46,880 --> 01:00:49,360
Speaker 2: it's done, and gold prices are normalizing in the same

1144
01:00:49,360 --> 01:00:51,600
Speaker 2: way that you know, the people that were the crypto

1145
01:00:52,120 --> 01:00:54,760
Speaker 2: junkies have done what they needed to do, bought their

1146
01:00:54,800 --> 01:00:56,760
Speaker 2: bigcoin a one hundred and twenty thousand dollars, and now

1147
01:00:56,760 --> 01:01:00,000
Speaker 2: it's normalizing back down to colose to nothing.

1148
01:01:00,080 --> 01:01:02,600
Speaker 1: It's interesting you say that because, like you know, the

1149
01:01:02,640 --> 01:01:04,600
Speaker 1: old saying was when the dormant of the Wentworth Hotel

1150
01:01:04,600 --> 01:01:07,479
Speaker 1: which is now the Sofhotel hotel, but when the dormant

1151
01:01:07,480 --> 01:01:10,240
Speaker 1: that went with hotels starts talking about buying shares, that's

1152
01:01:10,280 --> 01:01:11,680
Speaker 1: when you know you should sell out. That was an

1153
01:01:11,680 --> 01:01:14,600
Speaker 1: old saying in the eighties. And what's interesting about that

1154
01:01:14,680 --> 01:01:17,400
Speaker 1: there's there's a gold bullying company I won't name the name,

1155
01:01:17,480 --> 01:01:20,040
Speaker 1: but in a Martin place and up until about two

1156
01:01:20,040 --> 01:01:22,720
Speaker 1: months ago, there was a line there every single day

1157
01:01:22,840 --> 01:01:25,400
Speaker 1: of one hundred meters of people lining up to go

1158
01:01:25,440 --> 01:01:30,440
Speaker 1: and they buy by Gold and I walked past their often.

1159
01:01:30,520 --> 01:01:32,800
Speaker 1: And over the last three to four weeks that line

1160
01:01:32,920 --> 01:01:37,280
Speaker 1: has gone disappeared, does not exist, none, zero people. And

1161
01:01:37,320 --> 01:01:40,440
Speaker 1: that's the dormant of the Wentworth. That's that's that's the

1162
01:01:40,520 --> 01:01:42,760
Speaker 1: canary in the coal mine for me, and that's a

1163
01:01:42,760 --> 01:01:45,560
Speaker 1: big indicator of that particular set class. Well, I just

1164
01:01:45,640 --> 01:01:47,720
Speaker 1: wanted to say one thing is before we finished, because

1165
01:01:47,960 --> 01:01:50,920
Speaker 1: you know, it's funny how moments were celebrating tend to

1166
01:01:50,960 --> 01:01:55,680
Speaker 1: have a few things in common. Good company, something worth toasting,

1167
01:01:56,160 --> 01:02:00,320
Speaker 1: and something that makes it feel like it mattered. Seventy

1168
01:02:00,360 --> 01:02:04,680
Speaker 1: five years of pan Folds Grange, once tasted, never forgotten.

1169
01:02:05,080 --> 01:02:07,880
Speaker 1: Now let's die back in a lot of people, you know,

1170
01:02:08,800 --> 01:02:12,120
Speaker 1: watch these shows and all things that you write or

1171
01:02:12,160 --> 01:02:14,720
Speaker 1: I might write, and they sort of want to come

1172
01:02:14,760 --> 01:02:18,840
Speaker 1: at you for a whole lot of reasons. And I've

1173
01:02:18,840 --> 01:02:23,720
Speaker 1: known Chris Joy for a long time. Chris is a

1174
01:02:23,800 --> 01:02:30,480
Speaker 1: pure pragmatist, so when he is here talking about the USA, Trump, whatever,

1175
01:02:31,360 --> 01:02:33,960
Speaker 1: any asset class you want to talk about. It's not

1176
01:02:34,040 --> 01:02:37,320
Speaker 1: because he's a fanboy, that's not him. He actually can

1177
01:02:37,400 --> 01:02:40,200
Speaker 1: give a rats ass about any of those things those

1178
01:02:40,240 --> 01:02:44,440
Speaker 1: people because he's because he's pure economics. He's feel purely

1179
01:02:44,600 --> 01:02:47,160
Speaker 1: interested in what asset class is going to be the

1180
01:02:47,160 --> 01:02:49,560
Speaker 1: best outcome for me, for your business, which is Cooliba

1181
01:02:50,120 --> 01:02:54,560
Speaker 1: and for Chris And you know, because a long long time.

1182
01:02:54,880 --> 01:02:56,680
Speaker 2: Yeah, I mean it's true, it's factual.

1183
01:02:56,880 --> 01:02:57,640
Speaker 1: We're talking about facts.

1184
01:02:57,960 --> 01:02:59,959
Speaker 2: I can't help myself. I just say what I think. Yeah.

1185
01:03:00,040 --> 01:03:02,640
Speaker 2: People often say to me after I do these podcast interviews,

1186
01:03:02,640 --> 01:03:04,680
Speaker 2: and I was on Carls a couple of times as well,

1187
01:03:05,160 --> 01:03:07,400
Speaker 2: and they're like, oh, why are't you going to politics? Mate?

1188
01:03:07,480 --> 01:03:10,320
Speaker 2: I could not think of anything worse because you're not political,

1189
01:03:11,240 --> 01:03:13,200
Speaker 2: not at all. And the other thing is that if

1190
01:03:13,240 --> 01:03:16,439
Speaker 2: you deal with these politicians, they're all narcissists. But these

1191
01:03:16,520 --> 01:03:19,400
Speaker 2: dudes are the student politicides who have never worked down

1192
01:03:19,400 --> 01:03:22,280
Speaker 2: in their lives and all they're interested is in their

1193
01:03:22,320 --> 01:03:25,760
Speaker 2: personal power. And you know, it's just the worst thing

1194
01:03:25,760 --> 01:03:28,120
Speaker 2: in the world. I mean, when you're a kid, you're

1195
01:03:28,200 --> 01:03:30,680
Speaker 2: very idealistic and you knew me during my twenties, I

1196
01:03:30,680 --> 01:03:32,400
Speaker 2: wanted to change the world. I had all these great

1197
01:03:32,440 --> 01:03:35,160
Speaker 2: ideas and I thought, wow, this is amazing. You go

1198
01:03:35,200 --> 01:03:38,760
Speaker 2: to Canberra, you convince people that there are some demonstrably

1199
01:03:38,760 --> 01:03:39,960
Speaker 2: good ideas maybe're doing.

1200
01:03:40,040 --> 01:03:42,200
Speaker 1: John Howard, Yeah, I wrote, she had Equity.

1201
01:03:41,920 --> 01:03:45,640
Speaker 2: Three hundred and eighty report for the premise on Affordable Housing. YEP.

1202
01:03:45,760 --> 01:03:48,520
Speaker 2: I convinced Kevin Rudd during the GFC to invest fifteen

1203
01:03:48,520 --> 01:03:53,280
Speaker 2: billion dollars into residential mortgage back securities. But at the

1204
01:03:53,360 --> 01:03:56,440
Speaker 2: end of the day, you sitting in Australia come to

1205
01:03:56,480 --> 01:04:03,360
Speaker 2: the conclusion that these are deeply flawed and conflicted processes

1206
01:04:03,960 --> 01:04:07,240
Speaker 2: where you very very rarely get good decisions. And to

1207
01:04:07,320 --> 01:04:10,040
Speaker 2: your point earlier about well what's the best operating model?

1208
01:04:10,040 --> 01:04:12,920
Speaker 2: Should government step aside and just let businesses do what

1209
01:04:12,960 --> 01:04:20,040
Speaker 2: businesses do and drive as much innovation, investment, endeavor, exertion

1210
01:04:20,640 --> 01:04:23,440
Speaker 2: and progress as humanly possible. Let the collective wisdom of

1211
01:04:23,480 --> 01:04:26,960
Speaker 2: the economy do its thing and try and minimize interference.

1212
01:04:27,040 --> 01:04:31,040
Speaker 2: Just set the stable rules of the game such that

1213
01:04:31,080 --> 01:04:34,120
Speaker 2: we maximize the probability that the Australia will win in

1214
01:04:34,160 --> 01:04:36,840
Speaker 2: this global market. Or should they try and pick the

1215
01:04:36,880 --> 01:04:39,680
Speaker 2: winners and losers. Should they try and act like those

1216
01:04:39,720 --> 01:04:43,960
Speaker 2: benevolent dictators and divine what the outcomes will be. Now,

1217
01:04:44,240 --> 01:04:45,880
Speaker 2: they're never going to make the right decisions. It's like

1218
01:04:45,920 --> 01:04:48,640
Speaker 2: those idiots sitting in that private jet saying, hey, why

1219
01:04:48,720 --> 01:04:51,320
Speaker 2: don't we just take fifty to sixty billion of other

1220
01:04:51,360 --> 01:04:54,280
Speaker 2: people's money and put it into the NBN, only to

1221
01:04:54,320 --> 01:04:58,240
Speaker 2: be absolutely eviscerated by Elon Musk. And you can name

1222
01:04:58,320 --> 01:05:02,280
Speaker 2: countless snowy hydro two point zero all of these white

1223
01:05:02,320 --> 01:05:05,240
Speaker 2: elephant infrastructure projects that they've spent hundreds of billions of

1224
01:05:05,280 --> 01:05:08,080
Speaker 2: dollars on, just total extreme wasts.

1225
01:05:09,040 --> 01:05:10,760
Speaker 1: So no accountability, by the way.

1226
01:05:10,800 --> 01:05:12,920
Speaker 2: But your point is, I don't have an agenda.

1227
01:05:13,000 --> 01:05:15,840
Speaker 1: I really don't look and I want people understand because.

1228
01:05:15,840 --> 01:05:17,040
Speaker 2: I'm just telling people what I think.

1229
01:05:17,120 --> 01:05:18,720
Speaker 1: Yeah, well, no, it's not what you think is what

1230
01:05:18,760 --> 01:05:21,600
Speaker 1: you've You've analyzed it. So you know, people don't realize

1231
01:05:21,640 --> 01:05:23,600
Speaker 1: is you've got all these PhD's working for you. You're

1232
01:05:23,600 --> 01:05:25,600
Speaker 1: all sort of looking for a base point here and there,

1233
01:05:25,760 --> 01:05:27,840
Speaker 1: literally because your business.

1234
01:05:28,160 --> 01:05:30,200
Speaker 2: I'm trying to make money out of this conversation. No, no,

1235
01:05:30,360 --> 01:05:31,520
Speaker 2: I'm saying you what I believe.

1236
01:05:31,600 --> 01:05:33,600
Speaker 1: But this is why I get you in is because

1237
01:05:33,600 --> 01:05:36,560
Speaker 1: you're doing the work which I think our listeners need

1238
01:05:36,560 --> 01:05:39,800
Speaker 1: to hear. But it's not politicized. I don't want this

1239
01:05:39,840 --> 01:05:43,360
Speaker 1: to be anyone to think this is politicized. And because

1240
01:05:43,400 --> 01:05:47,479
Speaker 1: I mean we've seen what's happened to you know, lots

1241
01:05:47,480 --> 01:05:50,479
Speaker 1: of people holding podcasts now, they tend to think, oh, well,

1242
01:05:50,720 --> 01:05:52,840
Speaker 1: you're just trying to take a sidemark, and or Chris

1243
01:05:52,920 --> 01:05:55,320
Speaker 1: Joy's trying to take No I've known you for a

1244
01:05:55,320 --> 01:05:55,720
Speaker 1: long time.

1245
01:05:56,000 --> 01:05:56,600
Speaker 2: He's not that.

1246
01:05:56,560 --> 01:05:59,080
Speaker 1: Type of person. I'm not going to get rats asked

1247
01:05:59,120 --> 01:06:02,000
Speaker 1: about it. I like to be honest with you. I

1248
01:06:02,040 --> 01:06:03,840
Speaker 1: don't reget any of the parties can do it. I think

1249
01:06:03,840 --> 01:06:06,080
Speaker 1: it needs to be sort of somehow left to us,

1250
01:06:06,360 --> 01:06:09,200
Speaker 1: not you and me, but Australia to fix it themselves.

1251
01:06:09,280 --> 01:06:10,920
Speaker 1: I don't think anyone got the ability to fix it.

1252
01:06:10,960 --> 01:06:11,439
Speaker 2: I just don't.

1253
01:06:11,960 --> 01:06:15,840
Speaker 1: And I mean I've made suggestions to both sides of

1254
01:06:15,920 --> 01:06:18,720
Speaker 1: politics about the GC. I get dismissed every time we

1255
01:06:18,800 --> 01:06:21,160
Speaker 1: keep saying it should go up to I don't go

1256
01:06:21,240 --> 01:06:22,480
Speaker 1: quite as far. I have done the numbers that I

1257
01:06:22,480 --> 01:06:24,320
Speaker 1: don't go quite as far as fifteen percent of sage,

1258
01:06:24,480 --> 01:06:26,560
Speaker 1: but it should be a fungible g T should we

1259
01:06:26,560 --> 01:06:29,040
Speaker 1: go between ten and twelve and a half. Every time

1260
01:06:29,080 --> 01:06:30,800
Speaker 1: the RBA is put the rates up, we put just

1261
01:06:30,880 --> 01:06:33,680
Speaker 1: out in lockstep. We put it back down, but never

1262
01:06:33,920 --> 01:06:36,720
Speaker 1: below ten percent. And whatever we raise above ten percent,

1263
01:06:36,960 --> 01:06:39,240
Speaker 1: it doesn't go to the state. Somehow we say, you're

1264
01:06:39,240 --> 01:06:40,840
Speaker 1: not going to get anymore if you or you only

1265
01:06:40,880 --> 01:06:43,640
Speaker 1: get more if you can reduce your spending, you know,

1266
01:06:43,880 --> 01:06:46,800
Speaker 1: as a reward type basic I've been dismissed by both

1267
01:06:46,800 --> 01:06:49,959
Speaker 1: sides of politics because they and they tell me straight

1268
01:06:49,960 --> 01:06:51,920
Speaker 1: in my face, Mark, we'll never gather through.

1269
01:06:52,000 --> 01:06:54,640
Speaker 2: Well as we've spoken about. I think before you and

1270
01:06:54,680 --> 01:06:58,200
Speaker 2: I rocked up to Wayne Swam rocked up to Wayne Swim,

1271
01:06:58,200 --> 01:07:01,120
Speaker 2: we was treasurer and said, listens the deal. We understand

1272
01:07:01,120 --> 01:07:04,200
Speaker 2: banks probably better than anyone in the world. And the

1273
01:07:04,240 --> 01:07:07,800
Speaker 2: banks benefit from a taxpayer substity where they can raise

1274
01:07:07,800 --> 01:07:13,600
Speaker 2: money artificially cheaply because of the perception of their government guaranteed.

1275
01:07:14,080 --> 01:07:16,480
Speaker 2: And there is a case to whack a tax on

1276
01:07:16,520 --> 01:07:20,920
Speaker 2: the banks to price the fact that they get to

1277
01:07:21,000 --> 01:07:24,600
Speaker 2: raise artificially cheap money and they go straight to not taxpayers,

1278
01:07:24,600 --> 01:07:28,480
Speaker 2: but to their bottom line, and that basically fluffs their

1279
01:07:28,480 --> 01:07:32,600
Speaker 2: return on equity, and so we're actually arguing for higher taxes.

1280
01:07:34,000 --> 01:07:37,200
Speaker 2: And what was his response, and a price on and

1281
01:07:37,240 --> 01:07:40,440
Speaker 2: a price on this taxpayer subsidy that we were gifting

1282
01:07:40,440 --> 01:07:43,880
Speaker 2: to the banking system. This is like heartland labor policies.

1283
01:07:43,400 --> 01:07:44,840
Speaker 1: Is straight off to GFC.

1284
01:07:44,560 --> 01:07:47,040
Speaker 2: Straight up to the GFC. And but this was this

1285
01:07:47,080 --> 01:07:50,920
Speaker 2: is central casting labor. Yeah, totally. You know, taxpayers helping

1286
01:07:50,960 --> 01:07:55,360
Speaker 2: out banks, they should be appropriately recompensed, and you need

1287
01:07:55,400 --> 01:07:58,000
Speaker 2: to price the free gift to the financial system.

1288
01:07:58,000 --> 01:07:59,760
Speaker 1: You know, of those tax the banks for the government

1289
01:07:59,760 --> 01:08:01,320
Speaker 1: garn you so called guvernment garn.

1290
01:08:01,160 --> 01:08:03,080
Speaker 2: Sewe said, oh no, I couldn't take on the banks.

1291
01:08:03,080 --> 01:08:03,760
Speaker 2: They're too powerful.

1292
01:08:03,880 --> 01:08:05,840
Speaker 1: He also said at the time, do you remember I

1293
01:08:05,840 --> 01:08:07,240
Speaker 1: don't know if you remember this, but he said to

1294
01:08:07,240 --> 01:08:09,480
Speaker 1: both of us now and we went there, you know,

1295
01:08:09,600 --> 01:08:12,200
Speaker 1: in good faith. He also said to us, because look

1296
01:08:12,240 --> 01:08:13,880
Speaker 1: what's happening in the mining lobby. I don't want to

1297
01:08:13,880 --> 01:08:15,360
Speaker 1: have to take on the bank lobby at the same time,

1298
01:08:15,400 --> 01:08:17,439
Speaker 1: mistake in the mining lobby, because there's election coming up.

1299
01:08:18,000 --> 01:08:18,120
Speaker 1: You know.

1300
01:08:18,160 --> 01:08:20,879
Speaker 2: The irony of all of that is another person who's villified,

1301
01:08:20,960 --> 01:08:23,920
Speaker 2: who's actually you know, in all my dealings with him,

1302
01:08:23,880 --> 01:08:26,599
Speaker 2: he was a very good guy. Scott Morrison, he actually

1303
01:08:26,680 --> 01:08:28,960
Speaker 2: did when he was Treasurer whacked this tax on the banks.

1304
01:08:29,520 --> 01:08:33,080
Speaker 2: He introduced something called the wholesale Liability Levy and there

1305
01:08:33,120 --> 01:08:36,200
Speaker 2: is a zero point six percent tax that the big

1306
01:08:36,240 --> 01:08:39,719
Speaker 2: banks pay every year and it generates billions of dollars

1307
01:08:39,960 --> 01:08:43,680
Speaker 2: in revenue four taxpayers. And that was our idea. That

1308
01:08:43,800 --> 01:08:45,000
Speaker 2: was the idea we put to Swaney.

1309
01:08:45,080 --> 01:08:46,320
Speaker 1: Yeah, but he didn't want to do it, didn't have

1310
01:08:46,400 --> 01:08:49,040
Speaker 1: the balls, Yeah, because he didn't he thought it was

1311
01:08:49,040 --> 01:08:50,759
Speaker 1: a gonn affect winning election the next election.

1312
01:08:50,800 --> 01:08:54,759
Speaker 2: Correct. Whereas Scott Morrison didn't do that for any reason

1313
01:08:54,760 --> 01:08:56,519
Speaker 2: related to politics. He did it because he thought it

1314
01:08:56,520 --> 01:08:59,679
Speaker 2: was actually the right thing, whereas Swaney all he cared

1315
01:08:59,680 --> 01:09:00,960
Speaker 2: about politics and power.

1316
01:09:01,080 --> 01:09:03,000
Speaker 1: I recalled there was another thing that you mentioned to

1317
01:09:03,320 --> 01:09:05,360
Speaker 1: that they should do, and you said we should have

1318
01:09:05,360 --> 01:09:08,439
Speaker 1: a royal commission into the banking system and he said

1319
01:09:08,479 --> 01:09:12,760
Speaker 1: there's no way. And then, of course Hockey you then

1320
01:09:12,800 --> 01:09:15,160
Speaker 1: put your limp point plan out to Hockey which called

1321
01:09:15,200 --> 01:09:17,519
Speaker 1: for the same thing. He said no way. And then

1322
01:09:18,600 --> 01:09:22,040
Speaker 1: following that it was Scott Morrison actually who put them up.

1323
01:09:22,040 --> 01:09:23,360
Speaker 2: Well, no, it was actually I put it to Hockey.

1324
01:09:23,439 --> 01:09:26,240
Speaker 2: He backed it. He backed back and Hockey as treasurer

1325
01:09:26,520 --> 01:09:28,040
Speaker 2: help the walls of the son of Wallace.

1326
01:09:28,160 --> 01:09:30,519
Speaker 1: That's right, you're right. Sorry, you're right, you're a son

1327
01:09:30,560 --> 01:09:32,839
Speaker 1: of Wallace. I forget that because the original Wallace inquiry

1328
01:09:32,880 --> 01:09:35,440
Speaker 1: was original banking inquiries the son of Wallace.

1329
01:09:35,600 --> 01:09:37,120
Speaker 2: And that was the Murray Inquiry.

1330
01:09:37,240 --> 01:09:39,080
Speaker 1: Yeah, yeah, which I wrote the terms of reference for

1331
01:09:39,200 --> 01:09:40,080
Speaker 1: Sir David Murray.

1332
01:09:40,160 --> 01:09:42,800
Speaker 2: Yeah. It's funny the people that would criticize I think

1333
01:09:42,880 --> 01:09:45,000
Speaker 2: a lot of the things I say are actually projecting

1334
01:09:45,000 --> 01:09:48,000
Speaker 2: their own political prejudices. And yeah, I think that's a

1335
01:09:48,080 --> 01:09:50,960
Speaker 2: key takeaway. We don't give a freaking and I couldn't

1336
01:09:50,960 --> 01:09:54,320
Speaker 2: care les. All I care about is figuring out solutions

1337
01:09:54,360 --> 01:09:56,639
Speaker 2: to problems and getting to the right answer.

1338
01:09:56,680 --> 01:09:58,439
Speaker 1: And all I care about is bringing the best people

1339
01:09:58,720 --> 01:10:01,280
Speaker 1: to the show who know the problems. Can I articulate

1340
01:10:01,320 --> 01:10:03,640
Speaker 1: the problems like you do and come up with some solutions,

1341
01:10:04,120 --> 01:10:05,400
Speaker 1: And that's all we can never hope for. But the

1342
01:10:05,400 --> 01:10:08,720
Speaker 1: problem is, mate, the politicians that listen to us. The

1343
01:10:08,800 --> 01:10:12,080
Speaker 1: country is so divided at the moment. The politicians know

1344
01:10:12,160 --> 01:10:14,479
Speaker 1: there's division, they're going to play the division because they're

1345
01:10:14,600 --> 01:10:17,680
Speaker 1: unfortunately you know, and I respect this part of it.

1346
01:10:17,720 --> 01:10:21,280
Speaker 1: They're fighting for their life. They are fighting for their lives,

1347
01:10:21,840 --> 01:10:24,840
Speaker 1: and you know, good luck to them. But it's one

1348
01:10:24,840 --> 01:10:25,960
Speaker 1: of the reason why I know a lot of people

1349
01:10:25,960 --> 01:10:27,519
Speaker 1: say I'm not going to live in this country anymore

1350
01:10:27,720 --> 01:10:30,880
Speaker 1: because the place you've heard people say that hundred percent.

1351
01:10:30,960 --> 01:10:33,880
Speaker 1: Heaps of people heaps heeps to me, and they want

1352
01:10:33,920 --> 01:10:36,479
Speaker 1: to take their capital, not only their money, but they

1353
01:10:36,680 --> 01:10:38,400
Speaker 1: know how and what they've.

1354
01:10:38,240 --> 01:10:40,120
Speaker 2: Developed, intellectual property and they've created it.

1355
01:10:40,320 --> 01:10:42,800
Speaker 1: Take some other place and they'll build businesses in New Zealand.

1356
01:10:42,800 --> 01:10:44,240
Speaker 2: They'll go to Sea a place, or Singapore.

1357
01:10:44,479 --> 01:10:48,040
Speaker 1: Singapore people saying to me, I will mark, there's only

1358
01:10:48,040 --> 01:10:50,400
Speaker 1: a few, there's not that many. Yeah, but these people

1359
01:10:50,680 --> 01:10:53,040
Speaker 1: when they set businesses up, they employ tens of thousands

1360
01:10:53,080 --> 01:10:54,160
Speaker 1: of people, So.

1361
01:10:54,080 --> 01:10:56,000
Speaker 2: There is many, isn't it charmer statistic? I don't know

1362
01:10:56,000 --> 01:10:57,479
Speaker 2: if this is right, but I thought I read it

1363
01:10:57,479 --> 01:11:00,360
Speaker 2: somewhere that is zero point one percent of Australians sixty

1364
01:11:00,360 --> 01:11:02,519
Speaker 2: percent of all capital against tax. Yeah. Well, if the

1365
01:11:02,640 --> 01:11:04,880
Speaker 2: zero point one percent up and leave, what's going to

1366
01:11:04,920 --> 01:11:07,160
Speaker 2: happen to your tax revenue? Buddy? Yeah, same thing happened

1367
01:11:07,160 --> 01:11:10,080
Speaker 2: in the UK. They basically changed the tax incentives for

1368
01:11:10,080 --> 01:11:12,360
Speaker 2: successful people in the UK. They basically all left.

1369
01:11:12,400 --> 01:11:14,240
Speaker 1: They were going to Dubai and Abadhabi in those places

1370
01:11:14,280 --> 01:11:17,000
Speaker 1: like that. There's been a massive exodus. So like tens

1371
01:11:17,000 --> 01:11:20,160
Speaker 1: of thousands of people have left the UK. It's the

1372
01:11:20,160 --> 01:11:20,960
Speaker 1: biggest exodus.

1373
01:11:21,120 --> 01:11:22,799
Speaker 2: You might say, well, who cares about tens of thousands,

1374
01:11:22,840 --> 01:11:25,160
Speaker 2: but if that zero point one percent of six percent correct,

1375
01:11:25,640 --> 01:11:26,599
Speaker 2: that's a pretty problem.

1376
01:11:26,640 --> 01:11:29,240
Speaker 1: And they were employing all the people. Yeah, as usual,

1377
01:11:29,280 --> 01:11:31,679
Speaker 1: makee Chris Joy awesome, mate, that was fantastic things, mate,