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"...public opinion deserves to be respected as well as despised" G.W.F. Hegel, 'Philosophy of Right'

the winds of political change blow as... « Previous | |Next »
March 12, 2005

With the Senate coming under the control of the Coalition after June, the jostling within the Liberal camp has begun.


The money is on Costello to succeed Howard with Downer, Abbott and Nelson angling for the Deputy Leader's position. This is now becoming the main game within the Coalition.

The conflict/battle over the economy has settled into firing shots from entrenched positions. These were dug in last week. Mark Davis in today's Australian Financial Review (p.22) describes the opposing positions in the economic warfare well.

The ALP is saying that:

...the good times fo the past decade are a result of Hawke and Keating government reforms. But the Coalition has failed to embark on a new round of reforms. The reform fatigue has led to skills shortages and infrastructure capacity constaints. These bottlenecks have produced a double whammy of slowing economic growth and rising interest rates which are hurting families.

Therefore the ALP is the only political party with good economic creditionals.

Really? We are going to see a lot of reform after June 30th. And what about the current account deficit and the need to build a knowledge economy? The silence on this means that the ALP's political arrows, which are being fired at the Coalition's citadel, are only designed for newspaper headlines, not for good economic policy.

And the Coalition's position? Costello's defence has three fronts.

[First] The labour shortages... are signs of the government's success in getting unemployment down to levels not seen in more than a gentration...[Secondly] only the government has the solutions for the current economic problem of demand outstripping supply..the governments plans to further deregulate the industrial relations system will relive the supply side constraints by lifting the economy's productivity and ensuring that labour shortages do not spill over into inflationary wage rises.

Not the Costello talk about the shortages of labour not the shortages of skilled labour or the need to invest in vocational and tertiary education to enable a knowledge economy.

Costello's third front is a diversionary one. Mark Davis says that Costello:

....has mounted a foray deep into his enemy's flank, accusing the state and territory Labor governments of squandering a multi-billion-dollar windafall of GST revenue and failing to invest in improving the nations's post and transport infrastructure.

Conveniently forgotten is the Commonwealth's failure to invest in education and infrastructure.

So what has been sidelined is the need to foster a "Silicon Valley"in Australian: to start a culture of real innovation and real value creation based around smart engineers, clever thinking, technology geeks, investors, R&D, innovation etc. Australia will continue to import technology and intellectual capital and pay for it by continuing to dig minerals out of the ground.

| Posted by Gary Sauer-Thompson at 11:54 PM | | Comments (1)


Best wishes.