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August 4, 2010
The Coalition's mantra or slogan --- end the waste, pay back the debt, stop the big new taxes and stop the boats--- is wearing rather thin. Instead of being a framework for their ideas about economic policy it looks more like an election script based on zombie economics.
The reason that it is more mantra than framework is that the Coalition is giving the impression that there was no global financial crisis at all. The mantra about Labor's ''reckless spending'' and ' big 'waste'' and "huge debt" gives the impression that government's stimulus package thing just went to Labor's head---(its what Labor does) and because they are Labor they throw money around----"Labor is borrowing 100m a day"--- to keep the state big. Labor just loves a big state that crushes individual freedom. Or Labor are just tizzy.
The government is the problem not the economy is the implication. The global financial crisis and the global recession that followed is simply airbrushed out of history.
So there is no need to say what the Coalition would have done to deal with the global financial crisis; how they will bring the budget back to surplus other than cutting the waste (eg., killing off the national broadband network!) or how they will "stop the big new taxes" when they are proposing a new tax on larger companies, a 1.5 per cent levy, raising $6.1 billion in the first two years, to help pay for his paid parental leave scheme.
The reality is that Australia has low public debt according to the Glenn Stevens, the Governor of the Reserve Bank, good credit ratings, limited pressure on interest rates due to moderate inflation, and a mining boom that will increase government revenue.
So where is the Gillard Government's attack on the Coalition's mantras? Where is their economic narrative to show their good economic management? The general economic consensus is that the Rudd Government's fiscal stimulus package designed by Treasury, which includes the school building program and the $900 Commonwealth payment, saved the Australian economy from the worst of the economic crisis.
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Gary I think it's a hard argument to condense into campaign material. People tend not to be too impressed by claims they were saved from potential harm by the government. They're just as likely to believe the threat was over-hyped in the first place and resent having been made to worry about it. They may also believe that Labor's actions were little different to what the Libs would have done - something I tend to believe too - and so the argument would depend on reminding voters of what the Libs said from the safety of opposition. It's a coherent argument but like I said, not one that can be made quickly. And it also feeds the Libs' counter-argument that it was a short-term fix with long-term debt problems, which is also rebuttable but again not in a 30 second sound-bite.
One possible complicating factor is that Gillard has never held an economics portfolio and in fact I can't recall ever hearing her engage in any kind of deep discussion of economics. It may be that she has limited knowledge of the field and Labor's trying to minimise the risks of her making a gaffe or two. Economists and business pundits are somewhat precious about their secret handshakes and so on. They had great fun at Barnaby Joyce's expense when he mixed a few things up - imagine how they would react if a PM did something similar.