United States sub-prime mortgage investment market. The subject had as much meaning as an error message on a computer screen. It’s a geek language known only to whiz kids and nerds in the financial sector. The rest of us barely understand the pages of ‘explanatory’ notes we have to read before signing a mortgage document.
But what we do know is the banks and their lawyers are going to screw us somehow if the economy goes belly up!
We know that corporate conglomerates such as Coles and Woolworths will use their monopolies to screw farmers, suppliers, contractors and consumers and we know banks will use theirs to raid our accounts with sneaky fees and charges at every stage of the banking process. On the other hand we expect government agencies to properly manage the taxes and rates they extract from us for the provision of infrastructure and services.
Recent revelations that Local Government Councils in New South Wales could lose more that $200 million dollars because of shonky investments in the United States sub-prime mortgage market has sent shock waves through our financial and government sectors. It is clear that some Councils have been operating well out of their areas of expertise in volatile international money markets. The decline of the United States sub-prime mortgage market has left them dangerously exposed.
As the third tier of government our local Councils are under enormous pressure from both Federal and State Governments. Increases in local government responsibilities are not met my commensurate increases in government funding. The Iemma/Costa government restricts their income by pegging rates at levels well below what they need to meet the needs of their communities and now ‘cranky Frankie’ Sartor wants to raid their Section 94 biscuit tins!
In another era it would have been called ‘rape and pillage’. Today it’s called ‘cost shifting’.
Whilst Maurice Iemma and Michael Costa have applied the squeeze they have failed to provide adequate guidelines or centralised expertise to guide Councils through the shoals of international investments. Even the advice we received from our grand-fathers about ‘not putting all your eggs in one basket’ seems to have been ignored by some.
It is probably too much to expect from a Government that has failed New South Wales residents in so many areas. Who will ever forget the failed T Card, the collapse of toll companies, the North Shore Hospital and the daily gridlock on our roads among other things.
Federal and State governments can do a lot more to minimise risk in this volatile area by setting proper Ministerial guidelines and providing centralised investment expertise.
Tags: Labor, Liberal, Local Government, Politics
