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.
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.