The adults have been back in charge for over three years now. Our economy has been saved from the debt and deficit decimation and everything is back to normal. Scott Morrison take a bow. You have achieved something Joe Hockey couldn’t.
Oops! Hang on. Something’s not quite right here.
The September Quarter national accounts have thrown up something that can’t be right, can it? A negative growth factor of 0.5% could only occur under a Labor government, surely. An annual growth rate of just 1.8%? Doubtless there are people out there who will still blame Labor for it.
And it appears Scott Morrison is trying to. He is demanding that Labor must now support the government’s $48bn tax cut plan because the economy needs it. It’s the same old ‘trickle-down’ rubbish conservative governments have been preaching for years.
“This is the ticket to the next 25 years of growth,” he said on Wednesday. “But we cannot achieve that if we cannot get the partners in this parliament that will engage with us in the national interest, that won’t be engaging in party political games, that won’t engage in negative politics and wrecking and destroying, but will engage to lift the burden on business so they can invest and employ more people.”
Can you believe the economic fantasies this man entertains? He actually believes that a $48 billion tax cut for businesses is in the national interest. The cut is over a 10 year spread, let out in dribs and drabs that business will hardly notice. The savings in most cases will probably pay for a Christmas break-up party, but little else.
The modelling shows the corporate tax cuts will deliver an increase in the GDP of 1% in 20 years’ time. Compare that to a GDP loss of 0.5% in the last three months. Morrison thinks that this is going to save the Australian economy from disaster and set up the next 25 years of prosperity. Talk about delusions of grandeur!
And this is what he is banking on to save his economic record. To those of us who have been warning a recession is immanent, that increased government spending, not tax cuts for business, is what is needed, we say, “we told you so.” But Morrison is not listening.
“To regain our competitiveness, and therefore create and sustain jobs, we must encourage our businesses, which employ most Australian workers, to invest and grow,” Morrison said at a press conference on Wednesday.
For the record, the nine Australian governments are collectively the country’s largest employers to the tune of 2 million workers and it is the government who should be leading from the front. Business is waiting for government to show the way.
They will thank Morrison for the tax cuts but won’t invest the proceeds. To think otherwise is sheer fantasy. If Morrison wants to encourage business to invest, then he should lead by example.
Let’s start by constructing the world’s biggest solar plant in South Australia, let’s build a fast train service between Sydney and Melbourne, let’s restore the NBN to its original design (FTTH) and get it finished by the end of 2017. Let’s upgrade our urban transport systems.
There’s plenty of other projects just begging for attention. But no, this government is determined to bring the budget to balance. That’s code for surplus. They won’t spend because they think that deficit spending creates debt and debt is bad.
All of which is sheer bollocks!
How do we get it through their thick heads that the only way out of the mess they have created, is to spend? Even the IMF has changed its mind. After being a major contributor to the economic disaster that is the Eurozone by preaching austerity, they have now decided that infrastructure spending is the new austerity.
Professor Bill Mitchell was quick to react. He writes, “The Australian economy has been marching inexorably towards recession for the best part of this year and government refuses to budge from its attempts to impose fiscal austerity. Madness is a euphemism for their policy conduct. Incompetent also comes to mind.”
Hello! Is anyone in Canberra listening?