What a monumental turn around. In a newspaper interview this week, Prime Minister Malcolm Turnbull has shrugged off the Abbott-Hockey debt and deficit rhetoric and signalled more debt to come.
“What we’re trying to achieve is to ensure that Australians who do live today in a high-wage, generous social welfare net economy, will be able to do so in the years ahead and in an environment where wages will be higher and we’ll have a bigger tax base and we’ll be able to provide for those in need more effectively,” he told Fairfax Media.
Contrast this with some of the verbal diarrhoea that came out of the mouths of both Abbott and Hockey when they convinced the more gullible amongst the electorate both before and after the 2013 election, that austerity was necessary to rein in Wayne Swan’s debt and deficit disaster.
Turnbull went even further when he said, “Everything, every single element, is on the table, and I know that always means that someone can then run a scare campaign, but I’m sorry, we’ve got to stop … this is part of the political tradition I’m determined to end. We have got to be able to consider policy options in an unfettered way.”
The significance of this statement and his acknowledgement that both revenue and spending options are on the table, cannot be ignored. While signalling a reversal of the previous administration’s scare mentality and adopting an expansionary mindset including borrowings for public transport projects, he has also, deliberate or otherwise, checked Scott Morrison for suggesting we only have a spending problem.
What are we to make of this policy about-turn?
My reading is that Malcolm has decided he will be his own man and if the party doesn’t like it, they can’t do much about it without making themselves a laughing stock. While the extreme right wing of the party might like to think it has its leader on a short leash, the opposite is the case.
Turnbull, it would seem, has decided that he will crash through or crash. To make public his intentions in such flamboyant language is a challenge to those who still cling to the ultra-conservative mindset that would hold the nation back.
Citing public transport as the flagship of future expansion is a good start. Who among us would deny a pressing need to upgrade and prepare ourselves for future population growth that will require some radical thinking in the area of mobility.
Victorian Premier Daniel Andrews will be delighted as will Mike Baird in NSW. Both have big plans for improving transport in our two major cities. Turnbull has foreshadowed that roads, urban infrastructure and ports, previously considered state responsibilities by Abbott and Co, are now up for Commonwealth funding participation through additional borrowings.
The burning question, ‘where is the money coming from’ has been answered before it has been asked. The former Goldman Sachs CEO knows how money works, unlike his parliamentary colleagues and is not afraid of debt.
This will not be good news for the banks. Such projects, normally financed within the private sector’s financial houses, will have the Commonwealth participating for part of the return on investment.
“We don’t need the same internal rate of return as Macquarie Bank would, obviously, but if we have a piece of it, then we’re able to invest more, frankly. Then we’re much better off being a partner rather than simply being an ATM, for which you get generally scant thanks or recognition,” Turnbull says.
Tony Abbott and Joe Hockey never understood this, nor does the conservative wing of the government that never wanted Turnbull as leader. They will be alarmed at his recent comments and will fight tooth and nail to stop him. But they cannot ignore his popularity and his importance in keeping them in power.
That is why he will win and so too the unemployed. While the private sector is twiddling its thumbs Government must take up the slack. That is not a theory, it is an accounting rule for a national economy. It is exactly what is needed today. Joe Hockey failed as Treasurer because he expected the private sector to do the heavy lifting.
At today’s historically low interest rates, issuing public debt has never been cheaper and when invested in projects that add value to the nation, promote growth, increase employment and by extension, increase tax revenue, everyone benefits.
Turnbull’s approach to inclusivity will enrage his conservative colleagues, but he knows there’s little they can do about it now.
Public transport infrastructure is a very good policy. However I will reserve my judgement on this man as his penchant for following the party line prior to becoming PM is a bit suss to say the least. He believed in the Labour climate change policy and the NBN, but then he agreed with Abbott’s removal of these outstanding policies and put in place the expensive second rate NBN and the bizarre Abbott/Hunt climate policies.
“What we’re trying to achieve is to ensure that Australians who do live today in a high-wage, generous social welfare net economy, will be able to do so in the years ahead and in an environment where wages will be higher and we’ll have a bigger tax base and we’ll be able to provide for those in need more effectively,” He means higher wages for the already well paid. He’s already come out in favour of reducing penalty rates, which are the lifeblood of some of our lowest paid in the country.
Loz, my gut feeling is we have a Labor man in the Liberal ranks. The conservatives think so too. The next six to eight months will tell a story one way or the other.
John Kelly 🙂 I spend a fair amount of time on Twitter and the only people really hating Turnbull are the conservatives (whose vote I hope, will be split up between DLP, One Nation, ALA, Rise Up and Jacqui Lambie Network).
My only worry is if they can all work together on preferences, we will end up with some ‘real’ doozies in the Senate that will make those currently called ‘feral’ look like the smart, reasonable ones on the cross bench.
I am with Loz and babyjewels on Turnbull as of this point. Very relieved to see the end of Abbott/Hockey/Abetz et. al …… but still very dubious on what Malcolm’s fundamentals are …..
I do not have the faith in Malcolm Turnbull that you do. He still believes in the top down approach of the capitalist model with its corresponding bias towards the top over the masses. Any commitment to quality outcomes has been willingly compromised to political pragmatism, as demonstrated in the NBN project. It seems that national consideration is subservient to personal hubris.
AND I agree with Gilly as well …..
Malcolm in the Wilderness.
“Were all Keynesians now,” quoth the wily fox Milton Freedman, fingers crossed, in Time Magazine, December 1965. Five months later he qualified the headline, claiming his original statement was, “In one sense, we are all Keynesians now; in another, nobody is any longer a Keynesian”. (Time magazine, letters, February 1966)
Having taken the US off the gold standard in 1971 Tricky Dicky Nixon reprised the thought with, “I am now a Keynesian in economics”. (New York Times, January 4, 1971) He has since been popularly credited with making the original statement.
Both spin merchants knew that when confronted by an economic or social crisis a little financial pump priming is essential to maintain some credibility. Neither of them actually supported Keynesian doctrines for an instant.
Now another wily fox is sounding all Keynesian because he knows full well that he’s going to be in strife with the public if he doesn’t. Malcolm would rather be in strife with his own the right wing ideologues, thereby appearing as a resolute Moses leading his fractious followers out of the wilderness. It took the original Moses 40 years to travel 613km and he died in sight of his goal. Not a great record methinks.
If you want to know how trustworthy Malcolm is remember the Godwin Gretch plot, designed to discredit Rudd. It was hatched with that other great statesman, Eric Abetz. A classic case of “blow-back” when it all unraveled in public. Don’t trust anything this appealing silver fox says. His actions will tell the truth; and the truth is that he too will lead us into a global corpocracy.
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I see Turnbull doing a great job at PR.
But then I look closer and see J.Bishop, C.Pyne and Mal "Jackie" Brough all co-conspirators in the Slipper Affair and think WTF !
On the "other" side I see Rudds back alley Bowen as one of the contenders for useless Shortens job, and the minute Shorten is gone it will be election time.
Think I will stay with The Greens for some time to come.
John Fraser ……. Milan, Italy.
Where Italy is Eataly and the food is a delight.
It’s is only going to be a temporary quick fix John. Putting up flashing lights is not going to help Turnbull while he is still beholden to the right. The whole inequity greed infested paradigm is a recipe for disaster and though he may step a little to the right the underpinning constructs of capitalism are very much synonymous with parasites. While the religious base of judgment, blame and retribution remain entrenched the necessary rational causal determinate axioms, including the need to recognise the evolutionary communitarian necessity of culture, will fall on deaf ears.
They will continue on with the fallacious notion of survival of the fittest couched in religious gobbledygook. The least we need to do is enact MMT and a living wage for all then move towards a low labour society underpinned by self-replicating machines and a cashless culture of positive life affirming rewards for creativity. Species survival regularly depend upon dramatic adaptive strategies to avert disaster and we are rushing head long to dystopia.
Either we think big and creatively or many are going to suffer intolerably. Conservatives and the Left, with its union base, are not going to cut it because the future threatens their base assumptions. The empirical facts are against both the traditional left and right captured by stagnation and regress as they fail to grasp the vital need for critical and lateral thinking; foundational logic; the impact of science; and primarily the primitive nature of their worn out assumptions.
Utegate .. not forgotten ..
I have no faith in Turnbull at all and I don’t believe a word he says. He can waffle on all he wants, but the stark, bleeding obvious is if he goes too far left his own party will pull him back into line or will just get rid of him. They have seen now that the media will be kind to a back-stabbing wanna-be PM, as long as that backstabbing new PM is Liberal, so there will be no angst about replacing Turnbull.
We have Mal Brough on record, a week after Turnbull became PM, saying this –
“Most of the people I speak to are very supportive and some of those who struggle because they think we’re moving more to the centre, which is interesting, but, you know, they’re more to the right, I said, “Well, the proof is in the pudding. If Malcolm Turnbull was to go off on a tangent on his own, there’s enough of us here to pull him back to where we need to be, but I just don’t see that as a risk.”
http://www.abc.net.au/7.30/content/2015/s4316958.htm
Turnbull was meant to turn the polls around, get the government back into an election-winning position.He has done that, but not very convinvingly. If he’s so popular why aren’t the polls showing a 2PP of 60/40 to the government, instead of hovering around the 52/48 mark? He may be preferred PM, as someone so new to the job should be, but that popularity is not transferring to votes for his government. Turnbull was not meant to be reformist, or to change government policy.
If a handful of Liberal MPs become nervous, or put off by Turnbull’s blather then he could well find himself returned to the back bench.
Malcolm is talking of a Sovereign Wealth fund when the deficit is fixed. Looks like a mixed message.
Where will the money come from? We don’t have to borrow, do we? Can’t we, as a sovereign nation, create our own money? Is that what the MMTers have been telling us? Where are they on this?
Interesting comments – well I did say at the bebinning of Turnbulls dash that he will need to turn the ship around and that will not happen over night, because the Abbott ship was a rudderless jugganought!
That Turnbull has moved so soon in that interview is a testamony to the fact that he is supported by yes men and at lelast one yes woman, most of his cabinet and supporters who came from the Abbott camp are typical right wing opportunists, they know that their futuhes lie with supporting the current leader al, of them have studied Julie Bishops panchant for following the school yard bully of the day.
Turnbull,will know this he has street smart and they do not, so he will play them with ease!
He can talk the talk but can he walk the walk?
Silkworm, you are right. As a sovereign currency issuing nation we do not need to borrow anything. We can create as much money as necessary to fund whatever we want to make and sell. Turnbull is planning (or says he is) to fund infrastructure projects by bond issuance, i.e. Borrowing. He is playing the neo classical game of running a country like a household. I am not convinced, however, that this is how it will turn out. We’ll have to wait and see.
If we are thinking of innovation and given that we have had a car industry that could perform the process from go to Whoa! – why are we not working at designing and building small, efficient hybrid cars for city use? Most modern hatchbacks can accommodate 5 adults or the standard parents plus 2.4 children (if they are still around!) so a comparably sized hybrid to displace the ridiculous Toorak tractors which overflow our roads and car parks would be an excellent development. They also have remarkable boot capacity and versatile layouts and should be replacing the 6 cylinder and V-8 models anyway.
I see where you’re heading, Rosemary – you want us to negotiate the slough of despond of (gasp) SOCIALISM!
You have envious eyes on all those soon-to-be-idle assembly plants, don’t you. You hope that Debt & Deficit Labor will go to the next (or 2019 or 2022 …) election with some hair brained scheme to resume said plants and start producing a “peoples’ car”? …… OMG! You’re not a socialist; you’re a fascist.
Either way, you will argue that the billions of dollars the companies took in subsidies (we now know to have been on false pretences) nicely covers any compensation they might expect to drop into their begging bowl?
Typical left wing, impractical, holier-than-thou …. here – hang on – you’re a bloody Green ratbag!
So you want the government, who couldn’t make a profit in a brothel on a Saturday night with the fleet in town, to run a business with a gaggle of clock watching public servants and compete against China?
Take a lesson from history. TAA, PMG, CBA! All three word slogan companies run into the ground by socialism but now nursed back to health to be contributing members of Team Australia.
But apart from all that; it’s a bloody good idea that, I hope, has exercised the minds of more people than you and me.
The source of revenue that so rarely gets a mention is the Medibank rebate and will continue to fly under the radar as long as the goal of privatising Medibank remains very much an LNP wish. Would love to know what Malcolm really thinks…
Absolutely agree diannaart
What amazes me most is how easily Turnbull has gotten the props. I haven’t seen this much unwarranted adulation since Obama won the Nobel Peace Prize for not being Bush.
Of course Turnbull doesn’t fear ‘debt’. It doesn’t exist. Whoops, this will prompt a response by NeilofSydney. Run for your lives!
diannaart
I think you may be thinking of the private health insurance rebate that Julia Gillard sought to have means tested and the coalition vowed to reverse that ; they haven’t done so, so far.
As regards Medibank, it’s already been sold off, it’s Medicare you have to watch out for.
Cheers
I did mean to write ‘Medicare’ – apologies for mistake.