October 23, 2013
According to Joe Hockey raising the debt ceiling was a sign of economic mismanagement of the Gillard Government. It was akin to maxing out the “credit card”. It was a sign that the Gillard Government could not achieve a budget surplus, that the Labor government was profligate spenders, and hooked on debt addiction. The rhetoric for the last the three years was: "Don’t keep spending too much money. Don’t accrue that debt”. It was a sovereign risk issue.
Hockey, now Treasurer in an Abbott government, is increasing the debt ceiling from $300bn to $500bn. The mantra of "Don’t keep spending too much money. Don’t accrue that debt. Keep the budget in surplus" has been quietly shelved and forgotten.
It has to be cos Hockey is going to increase the budget deficit--eg., more subsidies to the old fossil fuel industries, funding the paid parental leave scheme and infrastructure, and making a massive increase in defence spending. But the budget deficit is all Labor's fault. The excesses and waste always are. Hockey's hands are clean. His plan for more spending than savings is not wasteful spending.
Australia is to have a commission of audit to find ways to pay down debt to counter balance Hockey's profligate spending, and to achieve the Abbott Government's stated aims of reducing the deficit, achieving a budget surplus and paying down debt. Fiscal austerity is the order of the day.
However, any tax increases have already been ruled out in advance. Faced with declining government revenue caused the recession fallout from the global financial crisis-which never happened according to the Coalition-- that leaves the following options: privatization (eg., Medibank Private), cutting spending, cutting services and charging more for government services. Or shrinking the size of the federal government by handing over responsibilities to the states and charities.
What's more cutting subsidies (eg., private health insurance), cutting services and charging more for government services for the middle class --that is to reining in the growth of welfare payments to middle-class families-- is “class warfare” and “the politics of envy”.
So that leaves fiscal austerity to target the working poor and those on welfare. The justification? The Labor government has been living beyond its means and it cannot continue. It's Labor's fault. It always is. The Coalition have to clean up the mess created by excessive government spending.
Welcome to the politics of austerity. The pathway to prosperity. That Liberal Party's pathway to prosperity is to lower the wealthy's taxes, deregulate the activities of business, and privatize government production of goods and services. Their program for the future is always: free the private capitalist system from (Labor) government intervention, and you will get "prosperity" and growth.
Economic problems are always reduced, by them, to pesky and unwarranted government tampering in the free market because they assume that capitalism is a fully self-healing system. The best solution for capitalism's problems, they insist, is to let the system function and correct them. Anything else will just make matters worse.