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May 12, 2010
The economic narrative of the Rudd Government's 2010 pre-election budget is that Labor are responsible economic managers. They steered Australia through the global financial crisis and economic recession with generous stimulus spending that meant low unemployment. They imposed fiscal discipline with a 2 per cent real spending cap; they have charted a course back to budget surplus and enabled the economy to recover.
This kind of economic prudence is such a contrast to the huge cuts to public spending that will need to be implemented by the new coalition Conservative/Liberal Democrat government in the UK under David Cameron. In contrast to the turbulence in the economies of Europe that are burdened with debt for many years to come, Wayne Swan, Australia's Treasurer, is talking about a return to surplus in three years from a flow of tax revenue from strong economic growth due to the mining boom in iron ore, coal and natural gas.
Australia is the lucky country. We ride the mining boom to prosperity thanks to the continuing industrialization of China, and forget all about the effects of climate change on Australia. It's a political amnesia that flows out of winning the next election. And after the election? The China-fuelled growth means infrastructure bottlenecks, labour shortages, stubborn inflation pressures, rising housing prices and rising interest rates.
Climate change is over the horizon, beyond the rainbow of the never ending mining boom. There is no need to restructure the economy to take into account climate change by making a substantive start on baseload electricity generation by renewables. There is no commitment to a substantive investment in research and development in green energy technologies; investments so that we can have cheap solar panels rather than expensive ones as we have now.
Maybe, even though the reality of global warming is accepted by the Rudd Government, they are thinking that dramatically cutting carbon emissions is simply not warranted.
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I expect that the neo-liberals will go on about government debt, Keynesian economics, and spendthrift Labor.