Sunday 30 April 2017
1 Remember the phrase ”spending like a drunken sailor” and how the conservative parties aided and abetted by the power of the Murdoch press would shout their gutter vile comments about debt and deficit? Here are a few examples. It’s been going on for years.
“Skyrocketing deb out of control.”
“We will not leave budget problems for another day knowing the truth means we can get on with building investment.”
“We are absolutely determined to get the economy moving again.”
“What we will see today is the sad truth that six years of Labor fiscal profligacy has given us cumulative deficits in order of a quarter of a trillion dollars.”
“The repair job started from day one obviously with the election of the new government but it accelerates from today given that we will see the full extent of Labor’s debt. Mr Hockey questioned whether he would live to ever again see the budget in surplus, such was the scale of the fiscal mess he claimed had been left by the former Labor government.”
”Labor’s debt and deficit disaster.”
Ministers from Tony Abbott down love to note that we are paying ”a billion dollars a month” in interest on our debt, and that they inherited a ”record” amount of debt.
The Australian newspaper even produced a Debt Clock.It also said:
”it’s a no-brainer: the Liberals are better at managing Australia’s finances than Labor.”
”History tells us it has been the job of our side of politics to rebuild the damage done by Labor governments. it is only a Coalition Government that can manage our public finances properly and restore the nation to prosperity.” (Malcolm Turnbull, leader of the opposition, 17 July 2009).
”We inherited Labor’s massive debt”
”This government will deliver Australia’s economic future because only a Coalition government can. As Liberals and Nationals, sound economic management is in our DNA. We’ve done it before and we are doing it again.” (Tony Abbott).
As I type it’s hard not to burst out laughing. The media have never given the Coalition the smack in the face it gave Labor.
History tells us that THEY HAVE NOW OFFICIALLY DOUBLED IT.
Remember how the “grown-ups,” the lifelong born to rule managers of money said they would fix the problem because they, and only they could manage the economy? Oh yes, the Abbott/Turnbull government were big on rhetoric over a long period of time but not so big on delivery when it came to reducing the debt. They have officially doubled it.
In doing so they have destroyed one of the most commonly held beliefs in Australian politics, namely, that the Coalition are better economic managers than Labor.
Now on the eve of the 2017/18 Budget the Treasurer has done a triple backflip with pike in announcing that the government would create a demarcation between good debt and bad debt. Something Chris Bowen, Labor, and sensible economists have been encouraging for some time.
But how fortuitous for the Treasurer. Now he can explain all of his mistakes with the “good debt, bad debt” tag. How simple.
Let’s face it, it’s a good idea in a pure economic sense. Well except for who is deciding what is and what isn’t bad debt. It’s just a pity that they have taken four years to get to this point.
Former RBA governor Glenn Stevens said the economy would only be pulled out if its malaise if ”someone, somewhere, has both the balance sheet capacity and the willingness to take on more debt and spend”.
”Let me be clear that I am not advocating an increase in deficit financing of day-to-day government spending,” Mr Stevens said.
”The case for governments being prepared to borrow for the right investment assets – long-lived assets that yield an economic return – does not extend to borrowing to pay pensions, welfare and routine government expenses, other than under the most exceptional circumstances.”
Borrowing when rates are rock bottom it makes absolute sense and if it rids us of the Australian myth that all government debt is bad then it’s a good thing. Anthony Albanese has been advocating it for years.
For the Government it’s like a sleight of hand trick. It will be able to borrow money whereas once their adversity to borrowing and going into debt was anathema to them and their followers. I wonder how they will react.
But like commongoodism, who decides what it is? It’s the ideology that worries me. It can certainly be used to decide what debt is good or what conversely is bad and get it wrong both ways. There should be a few arguments about that.
Could it be used to justify the government borrowing for the Adani mine? Is it a good debt for example?
”With the Adani mine likely to take some years to start production and renewable energy technology moving ahead at the speed of light why would any lending institution risk lending to an industry heading in the opposite direction.”
As Paul Kelly in The Monthly points out:
”In other words, the Coalition is setting itself up for a political future in which the supposedly politically neutral document of the budget designates Coalition-friendly spending as ”good” and Labor-friendly spending as ”bad”.
The Government is positioning itself up to be able to say that its debt is good debt and that if Labor wants to borrow in its traditional areas of spending such as education, health and welfare, then that’s bad debt. Where, for example, would the National Disability Insurance Scheme fit in all this? Could not a case be made that a long-term investment in it would be good debt? What about borrowing money for a better educated society. Or making kids pay 25% more for University fees. Is that good or bad debt that they will be incurring.
This is an economic budget game changer with many ramifications. The Government will borrow money to build and own Sydney’s second airport.
Yes, they are now going socialist. The Government is also giving away its advantage in calling Labor bad economic managers unless they can prove the bad debt tag. And what about machines of war. Where do we place them?
As a friend said:
“Liberal logic: spending $1 billion on #Adani coal mine is good, spending $500 million to save Aussie car industry is bad”
The May 2017 Budget will make a distinction between “good” and “bad” debt. This decision, not without merit, will further enshrine in conservative ideology the thought that the poor will be looked after by the drip down effect of the rich without any understanding of the needs of a cohesive society other than capital.
Good luck with that.
”The gross national product does not allow for the health of our children, the quality of their education, or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages… It measures neither our wit nor our courage; neither our wisdom nor our learning; neither our compassion nor our devotion to our country; it measures everything, in short, except that which makes life worthwhile.” (Robert Kennedy, 1968).
2 In admitting that he was surprised the job of President would be so hard Trump has shown an ignorance beyond belief. Life wasn’t meant to be easy.
3 Now I know. I have been wondering all week just what it is that Yassmin Abdel-Magied had said to get everyone upset.
”LEST. WE. FORGET. (Manus, Nauru, Syria, Palestine …)” That’s it. That’s the whole thing in a nutshell.
And for saying what amounts to a plea that while you are honouring those who have fallen for your country could you also give a little thought to the suffering elsewhere.
Now as If the preposterous vitriol towards her isn’t bad enough, some idiot is now asking Minister Dutton to revoke her citizenship! Ah Australian values and free speech remain a mystery to me .
4 On this day in 2016 I wrote:
Instead of being proactive the Government seems to be reacting to everything. It’s still true.
My thought for the day.
“The secret of change is to focus all your energy on not fighting the old but on building the new.”