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campaign launches « Previous | |Next »
November 12, 2007

It's campaign launch time at the end of the election campaign that has been going on for a year or so. No doubt we will have lots promises and give aways at the spectacles, which will add to the inflationary pressures noted by the RBA. Both leaders will claim to be both conservative and deeply committed to being economically responsible. It's a topsy turvy surreal world is it not?

Alan Moir

For sure, we will not hear much about spending cuts advocated by the IMF, given that spending promises by both political parties are running at $100 billion. The only other solution is to increase productivity big time. That means increased investment in university as well as vocational education.

However, I don't see this investment happening. Education policy has a couple of decades of history now and there is little sign that either major party is approaching education from a more radical perspective. So the policy proposal announced in the campaign launches are going to be modest, marginal and smallscale. The resources boom indicates that you don't need an investment in lower education to dig minerals out of the ground and sell them to China. Only business leaders need an education.

| Posted by Gary Sauer-Thompson at 5:44 AM | | Comments (7)



How much of that $100 billion do you reckon will actually get spent? How much of it gets set aside but never actually allocated to anything?

The Murray-Darling for example. Squillions set aside but only a couple of applications ever got approved and funded.

Many of the promises made in the past few months have turned out to be re-promising money that failed to actually turn up after the last election.

yes there is a history of not spending money. However, it tmay well be the case that a future government could not afford to be as generous as this one has been in recent years in handing back tax cuts.

A bigger surplus as a share of GDP and smaller tax cuts, may have to be the economic order of the day in 2008 and beyond.

Subsidies, tax breaks and other "demand side" policies to improve the affordability of things like housing or child care or education is good; but it can be self-defeating if the supply of workers is not increased, as providers take a slice of the assistance and simply bump up prices.

High-quality early childhood education and care is a function of high staff-to-child ratios, a high level of carer and teacher skills and qualifications, and a small care group size.

So what happened to all that Liberal talk about frugality and fiscal conservatism at the Liberal campaign launch? There was no attempt to rebalance monetary and fiscal policy. 'Responsible economic management' has become just another piece of spin and PR advertising.

Howard is encouraging self-reliance in an opportunity society by throwing money at the middle class. The slogan or catch cry is now 'from welfare state (bad) to opportunity state '(good). Decoded this means that welfare society like Sweden with a dependency mentality as opposed to an aspirational mentality of an oopportunity society.

The Reserve Bank puts up a big statement saying "slow the growth". It's red lights. Howard appeared on a stage in Brisbane framed by his election slogan "Go for Growth". And he did---$9.5 billion in 40 minutes. He's spent $64 billion so far. Ministers are saying there is more on the way.

even Rupert Murdoch, when he was in Adelaide yesterday, mentioned the importance of "infrastructure":

The future of any country is the quality of human capital and that gets back to education. Kids are leaving school virtually illiterate and that is terrifying, because they will form the next underclass. education was the key to changing society's attitudes, to encouraging innovation and a more aspirational mindset.

yes, but Rupert Murdoch's aspirational comments are tempered with continuing to make welfare dependency remarks. Thus:

It seems that both (political) sides are throwing, are promising, all sorts of financial benefits – which will take huge bureaucracies, by the way, to administer – in order to make people more and more dependant on the state. And when people become dependant on the state, the less aspirational they become, and they slow the country down.And that is not the spirit of certainly this country when I grew up, or the spirit as I understand it to be.