What do Donald Trump and Scott Morrison have in common?
Perhaps many things but we are only concerned about the economy at this time – they both reject the advice of economists on the best way to recharge the economy. Rather than look to the experts, Morrison focussed on key LNP constituencies – stimulating business with hand-outs in the hope that some same old same old ‘trickle-down’ and ‘the tide will raise all boats’ rhetoric will produce a recovery.
It was the budget that business groups wanted but certainly not one economists wanted.
We will never know what Treasury proposed but we do know the views of experts outside the public service. A good sample of those views was published last week in the Conversation. About 50 leading economists were asked to choose the four policy options that would be most effective in supporting the recovery.
The top four in order of importance were –
- Investing in social housing
- Permanently lifting Job Seeker
- Increasing funding for education and training
- Investing in infrastructure
Of those, only ‘infrastructure investment’ can be found in the government’s six biggest budget initiatives. Essentially, the budget was a pretty standard load of ideological cherries and giveaways. And bizarrely, with a huge output gap and excess capacity everywhere, there is a supply-side focus but no meaningful measures to stimulate demand. Nothing will come between the Coalition and ideology – certainly not experts!
It may be a touch optimistic, but with the advent of COVID-19 and its impact on the economy, the punters may be slowly twigging to the unreality of this phoney economy and asking what the hell has been the reality of the Australian economy and its performance over the last decade. Unfortunately, sweet FA is the answer.
If there anything good about this pandemic, it is the opportunity it has provided for an economy reset. But we all know that it will fall on a tone-deaf incompetent government. It seems the single raison d’etre of this Abbott/Turnbull/Morrison government is found in GDP growth (NOTE not in per capita growth which is actually falling) resulting from high level of immigration – this will be Morrison’s shameful legacy!
As we said when creating this website –
‘Just imagine ! Just imagine Australia with more honest politicians, a more insightful, nonpartisan press, a more mature understanding of its place in the world. We now have a rare opportunity to rethink what our nation can be’.
The views and opinions expressed here are solely those of the author.