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"...public opinion deserves to be respected as well as despised" G.W.F. Hegel, 'Philosophy of Right'

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February 24, 2014

Australia's reforms aim to lift economic growth back above 3 per cent according to Joe Hockey, the Australian Treasurer at the G20 meeting in Sydney. The latter's communique called for increasing economic growth by 2%. They plan to do this by getting government out of the way and then hoping that the growth will come from the private sector investing in infrastructure.

Hockey added that only economic growth that is faster than 3 per cent would stop the rise in unemployment in Australia and start reducing unemployment.

MoirAG20.jpg Alan Moir

So where is this kind of economic growth (an aspirational target?) come from, given the downsizing of manufacturing, the decline of mining, the high Australian dollar, and a budget surplus achieved through reducing the welfare state?

It would seem that the spin doctors are busy at work in glossy media management---eg., the ''end of entitlement'', structural reform and the unions as the bogeyman. Structural reform in Australia means labour market reform--- cutting back its employment protection framework ---as well as reducing access to the pension and greater user-charging for healthcare. This is called doing the "heavy lifting", making the "tough choices" and everything is on the table. It's all necessary because Australia faces an economic crisis.

These sound bites make little mention of repairing the global financial system, dealing with the sovereign debt crisis in Europe and the US banking crisis, the recession in Europe and the US, some countries in the eurozone facing the prospect of more than a lost decade of economic growth, the politics of austerity and low productivity growth. The shadow of the financial crisis that began in 2008 is a long one.

It's best to ignore the G20 Its history since its heyday at the London summit in April 2009 has been one of fragmentation and increasing irrelevance. It lacks a political leader to give it impetus, and it lacks an agenda that could put in place measures to tackle unemployment, global warming and the threat of a second financial crash.

How can the Abbott Government promote a big growth target on one hand while simultaneously reducing growth via austerity on the other? An expansionary austerity? The assumption is that unemployment could only arise as a result of problems specific to labor markets, such as minimum wages or recalcitrant unions. Hence the attack on unions.

The austerity economics is not an end in itself. Economics is the means to end the "age of entitlement", by which is meant making the market mediate decisions about our day-to-day lives thereby making us more individualistic; and making us less reliant on the ‘nanny state’ (ie., the welfare state) by withdrawing public subsidies of individual use of health, education, care or policing service. The Conservative's austerity project empowers the central state so that it has the power to expand market relations and create an economic framework that weakens intermediate institutions such as trade unions and local government.

| Posted by Gary Sauer-Thompson at 1:11 PM | | Comments (9)
Comments

Comments

If you listen to Abbott in Question Time in Parliament then economic growth comes from “scrapping bad taxes like the carbon tax and the mining tax, cutting red tape, improving productivity and opening up export markets with free trade agreements”.

The Australian prime minister sticks to the same themes whatever the audience or situation.

"it lacks an agenda that could put in place measures to tackle unemployment, global warming and the threat of a second financial crash."

climate change wasn't on the G20 agenda. It would clutter up the agenda, which was about economic growth.

'austerity’ is starting to re-appear in the political landscape as a concept, populating the headlines of newspapers and official documents to account for the foreshadowed massive cuts on public spending.

Austerity has references to a ‘sternness’ and ‘severity’ of lifestyle, and, above all, to the ‘inessential’ that needs to be violently cast off from ‘public’ and ‘private’ life.

austerity means that the welfare state is going to starved by the Abbott Government and those who need it are regarded as parasites and ‘nudged’ back towards to street.

The G20, under Australia's leadership, calls for economic growth.

Yet for most of the American and European middle class, education and full time employment can no longer guarantee access to a high standard of living, or even a preferable field of work.

Graduates are regularly exploited across the industries of advertising, charity, fashion, journalism, politics and doubtlessly many more. Often they end up exactly where they started, unemployed.

Those who do find work will have to work harder for longer and for less and they don’t expect anybody to do anything about it.

Austerity is a neo-liberal project in which economics is the method and the object is to change the soul.

The aim is to change the Australian people so that they become more individualistic. It is the market which increasingly mediates decisions about our day-to-day lives .

An AFR editorial says that:

"the time has come for Australia to jettison the protectionist, welfare-state mindset that has held back the economy for decades."

That's the Big Business interpretation of the end of the age of entitlement slogan. They want to reduce the incomes of poorer Australians.

The western nations in the G20 are facing similar long run trends of slowing growth, deindustrialisation, expensive labour forces and the outsourcing of their manufacturing to emerging lower cost economies.Many of them also continue to ride through the aftermath of the global financial crisis. Their sovereign debt is increasing and they face a future of an ageing population and an accelerating increase in social security and health expenditure.

So how do they get 2% economic growth?