November 2, 2012
I see that the some journalists in the poll-driven Canberra Press Gallery have started to revise their gold plated narrative about a doomed Gillard Government. They have begun to recognize the changing dynamics in the Parliament favouring Gillard Labor, and they are even starting to question Abbott's 'axe the carbon tax' roadshow with its scare campaign rhetoric.
What the journalists in the media aren't doing is stepping behind the surface point scoring politics of the budget surplus -to the fact that Gillard Labor has pulled off a big fiscal turnaround in just one year from a deficit of $43 billion to a $1.1 billion surplus forecast. The don't analyze the policy issues of this in the context of a stagnant global economy, and the economic reality that Canberra needs to rejig its revenue base.
How plausible is the politics of austerity, with its rhetoric fiscal black holes, as advocated by the Coalition in today's world? This is one in which the global economy is very interconnected, there is a synchronized economic downturn in almost all countries, and there are major problems for government finances. So what to do?
The politics of austerity, as advocated by the Coalition, is still just accepted by the Gallery, and they rarely criticize the deficit demagogues. They don't appear to ask whether the strategy of a politics of austerity---lower taxes and public services slashed to the bone---is an agenda that helps a few powerful people while hurting the rest of us. Or question the claims of some supporters of austerity who argue that fiscal adjustment to achieve budget surpluses could restore economic growth. They don't ask why state intervention in demand management through fiscal means is anathema for finance and mining capital.
Nor do they ask whether the neo-liberal preoccupation with the virtues of "sound finance" ---(ie, of balancing budgets) and reducing public debt--- is flawed as a long term approach to the revenue shortfalls, due to the global economic crisis. Is it the right approach to the opportunities for Australia that are being opened, and shaped by, developments in the Asia-Pacific Rim region.
They don't seem to weigh this up in relation to whether a better approach to Australia's future is one of strengthening our economy and preserving the essential functions of government?