The profligate Liberal Government
Haven't had time to put this up in a timely fashion [ie as the events surrounding the Labor Govt budget were unfolding in the past week] but have to say, the carping and complaining by the Liberals about the extent of the debt that is envisaged in this budget is almost sickening.
Yes, of course we'd prefer not to be in debt, or at least not to the extent that we will be. However, there are two factors that need to be taken into account: firstly, that as is economic orthodoxy, in a recession, it is the obligation of the government of the day to raise demand by increasing spending, to try and keep the economy from falling too far.
The second, and most telling point for the Liberal argument however, is that when in power they squandered the opportunity to build up a huge surplus, courtesy of unprecendented revenues, which they paid out in pork [instead of using it wisely] to try and buy their way into power for a fifth term. As George Megalogenis writes in the Australian [May 16th] the last Liberal budget [before the election] was 'shot at the time of the election, because too much of the revenue windfall from the resources boom had been handed back as tax cuts and increased spending'.
According to Megalogenis, the Coalition had already built in structural deficits, in the face of pretty much the greatest boom the Australian economy had ever known. Nor, for that matter, did they spend their huge surpluses on developing infrastructure.
That is, the Liberals enjoyed unprecedented tax revenues brought about by the mining boom, but instead of wisely spending it on developing Australia's productive capacity or even 'saving for a rainy day' they blew most of it in middle-class welfare and pork-belly projects to their favoured constituencies. And finally, before the election, they tried to bribe the electorate by offering some further $30bn or so in tax cuts, which the Labour opposition was pretty much forced to match.
So for Malcolm Turnbull [or any Liberal politician] to decry the current amount of debt that the current government has been forced to budget for, is not only cynical in the extreme, but patently dishonest.
A
Yes, of course we'd prefer not to be in debt, or at least not to the extent that we will be. However, there are two factors that need to be taken into account: firstly, that as is economic orthodoxy, in a recession, it is the obligation of the government of the day to raise demand by increasing spending, to try and keep the economy from falling too far.
The second, and most telling point for the Liberal argument however, is that when in power they squandered the opportunity to build up a huge surplus, courtesy of unprecendented revenues, which they paid out in pork [instead of using it wisely] to try and buy their way into power for a fifth term. As George Megalogenis writes in the Australian [May 16th] the last Liberal budget [before the election] was 'shot at the time of the election, because too much of the revenue windfall from the resources boom had been handed back as tax cuts and increased spending'.
According to Megalogenis, the Coalition had already built in structural deficits, in the face of pretty much the greatest boom the Australian economy had ever known. Nor, for that matter, did they spend their huge surpluses on developing infrastructure.
That is, the Liberals enjoyed unprecedented tax revenues brought about by the mining boom, but instead of wisely spending it on developing Australia's productive capacity or even 'saving for a rainy day' they blew most of it in middle-class welfare and pork-belly projects to their favoured constituencies. And finally, before the election, they tried to bribe the electorate by offering some further $30bn or so in tax cuts, which the Labour opposition was pretty much forced to match.
So for Malcolm Turnbull [or any Liberal politician] to decry the current amount of debt that the current government has been forced to budget for, is not only cynical in the extreme, but patently dishonest.
A
Labels: Australian Economics, Australian politics, budget deficit and policy
posted by Crema-editor at 1:41 PM
3 Comments:
This comment has been removed by the author.
Thank you. I've been arguing this point for two weeks, yet most Liberal voters seem content to attribute the Howard/Costello surpluses to nothing more than superior economic management, and the defecits of today to 'another typical Labor government'. A little context puts things into perspective...
HI DB - nice to hear from an enlightened reader. Have to agree, most Liberal voters are either stupid or completely 'one-eyed' on this subject - in spite of the facts, they will swear black & blue that the howard and costello team stood for 'sound economic management'
Post a Comment
<< Home