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things are sliding, badly « Previous | |Next »
March 2, 2005

It's all bad news. This week's balance of payments numbers were horrible, interest rates have risen by 0.25% with more on the way and the Australian economy is barely growing. And there is negative productivity growth.

Is that not policy failures on several fronts? So why is Peter Costello still given a tick as federal Treasurer when a cross is more appropriate? Are not the economic managers really saying that Australia is a successful economy because we borrowed a lot of money?


Australia does not have a booming economy anymore.

Costello is not looking good as an economic manager, and his justifications were thick and fast. Yesterday it was all the state govenments fault. Today the bad news of low economic growth is really good news.

Honestly, the strategic flaws are serious. As John Ducie in the AFR (the Chanticleer column) points out, in the last year Costello has

committed...[himself] to channelling $65 billion worth of budget surpluses over the next 5 years to boosting income and spending; and almost none to long-term reform or projects.

Costello has committed himself to little capital investment infrastructure renewal, or increasing productivity through knowledge and research and development rather than through creating more flexible labour markets.

That is a pretty devastating indictment. Now, whose responsibility is that?

Costello is diverting attention from this marked failure by deploying his 'blame the states' tactics. The states have been very slack---Costello is right about this. The states have also cried poor when the GST revenue has been rolling into their coffers, and they have continued their old 'blame the commonwealth 'game.

But Costello is evading the Commonwealth's own serious shortfalls. It has failed to face the problems of infrastructure developmentit is now going on about. Costello still talks about using the proceeeds of the T3 Telstra sale on repaying debt, and not on infrastructure development.

Costello's creditionals as an economic manager are tarnished indeed.

| Posted by Gary Sauer-Thompson at 12:05 PM | | Comments (0) | TrackBacks (1)

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