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foreboding futures « Previous | |Next »
August 25, 2010

There is a lot of commentary around the new politics due to the emergence of a multi-party democracy, the three regional Independents holding the balance of power in the House of Representatives and a minority government with some form of coalition. The promise emerging from this balance of power situation is parliamentary reform, better public services in health and education, more economic development for regional Australia and a more sustainable economy.

My own fear is that what will eventuate is a closure of this possibility, due to a minority Liberal government returning to power with the support of the Nationals and the regional Independents. That means three years of the economics of austerity based on the politics of fear constructed around the crushing government debt and financial catastrophe scenario that will bring ruin.

JenningsBcoalition.jpg Brian Jennings

This is a politics of neo-liberalism's free markets and small government economics that uses Johan Norberg's recent book Financial Fiasco as a road map. A politics designed to make the world safe for bankers and brokers in the citadels of capitalism.

My argument is that the Liberals are deeply opposed to the use of Keynesian style stimulus in preventing the economy from sliding into recession---because such governments continue to pursue a course of endless debt, higher taxes, more regulation. The Liberals have an explicit program of deep cuts to the government budget to reduce the deficit and government debt. Behind this is theory that tax cuts for the rich yield prosperity. No doubt their rhetoric will be one of "progressive austerity", unavoidable cuts, and returning the budget to surplus.

The economics of austerity and a hard deflationary budget---means that working families on the lowest incomes – particularly those with children – would be the biggest losers in the cities. For those living in the regions, already facing unemployment and reduced health and education services, it means more social pain from increased unemployment. It does not mean major investment in regional Australia and it does not mean overcoming the increasing levels of inequality and which equate the ‘good’ with what is economically efficient.

In these circumstances will the 3 regional Independents become Abbott's fall-guys? Will the coalition become unstable over the budget cuts? Will the Independents help to hold the axe handle, or will they turn the other way? They are not fools. They must know what Abbott's economics of austerity means for the bush and regional Australia. Are they critical of a neo-liberal mode of governance? Bob Katter certainly is.

And if the regional Independents decide to support Gillard Labor? Well, the budget cuts to return the budget to surplus over the next three years will be less severe than those advocated by the Liberals, and they could be counterbalanced by greater investment in public infrastructure in regional Australia.--eg., renewable energy grids and high speed broadband that would make a difference to everyday life in the regions.

| Posted by Gary Sauer-Thompson at 11:42 AM |