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SA: 2011 Budget « Previous | |Next »
June 10, 2011

Jack Snelling, the new SA Treasurer, delivered a steady as she goes neo-liberal budget designed to retain the AAA credit rating whilst lauding his right wing credentials about protecting families. He framed the rhetoric of state budget's looking after families in terms of the household budget--limited debt, credit cards, balancing---whilst taking from families by substantially increasing government charges (water charges increase by 40% for instance), getting rid of 400 more public servants and delaying key health and transport infrastructure projects.

It's called debt reduction ---paying off the credit card or mortgage in kitchen table economics --- thereby denying the Keynesian benefits of infrastructure spending when the economy shrinks and there is low population growth. It's neo-liberal economics. Snelling says he's restoring restoring the balance between social compassion and economic frugality, but that he could not provide cost-of-living relief for families because his priority was keeping the AAA rating.

And so the Catholic right continues its embrace of both neo-liberal economics and caring working class values that uses the spin of the human face of capitalism to cover up both the politics of austerity and the ongoing fracturing within the Rann Labor Government. They are pretty divided these days due to the factions and power brokers who have taken over in the party's structure and who are like a cancer in the party.

But the Rann's Government's future is full of hope because BHP's expansion of the Olympic Dam mine (the copper, uranium, silver and gold mine at Roxby Downs) is due next year. Forever hopeful. The mining boom is always just around the corner. This means that it is a "budget for the future of mums and dads who want to raise their families in SA".

| Posted by Gary Sauer-Thompson at 12:20 PM | | Comments (5)
Comments

Comments

Once upon a time, a long long time ago, in a galaxy far away there was this bloke named Donny Dunstan ....

is the ALP in SA still a social democratic party?

I love the way a half decent poleconomic scientist "decodes" the sort of waffle we were subjected to last night on channel 2.
You'd have thought Snelling constituted the Second Coming.
But elsewhere, Neville Wran and Sen. Faulkner have addressed issues much closer to the hearts of Labor supporters.
If it's a prelude to the end of Julia, "t'were better it were done quick", without the usual bloodspilling and remonstrance for the benefit of the Murdoch press.

How will lower budget deficits lead to increased growth and job creation in an economy mired in an economic slump?

The standard answer from the deficit hawks is that if the government reduces its deficit, and therefore borrows less, it will reduce interest rates. Lower interest rates will, in turn, give firms incentive to invest more.

Lower interest rates should also cause the dollar to decline, since it will make US government bonds and other dollar assets less attractive to foreign investors. If the dollar falls in value, then our goods will be more competitive on world markets. This will cause us to import less and export more, thereby creating jobs.

Is that going to happen? Does the mining boom mean inflationary pressures and rising interest rates?

"how will lower deficits will lead to increased growth and job creation in an economy mired in an economic slump?"

The deficit hawks say that if the government lays off workers in the public sector, then that will increase employment in the private sector. Then, the story goes, the mass layoffs of public sector workers will depress the wages of workers further, thereby making it more profitable for employers in the private sector to hire them.