The Australian economy is at a critical juncture. Last week, the Reserve Bank cut interest rates despite them already being at record lows, despite a highly stimulatory fiscal policy from the federal government and despite the Aussie dollar being dramatically weaker against the US dollar than three years ago. It has also revised down its growth forecasts, and the bank believes unemployment will rise further and stay higher for longer.
There are good external reasons for this weakness: commodity prices have fallen significantly, growth in China has slowed, the mining investment boom had to end at some point. But domestic economic growth has been severely affected by the government’s policy decisions, inability to explain them and its disastrous 2014-15 budget.
While the media and politicians focus on the leadership of the Liberal Party, the real story is how our continuing economic weakness is affecting workers, families, business and investors across an economy that is performing well below trend and seems unlikely to do otherwise for the foreseeable future. And from that point of view, the outcome of the leadership spill motion in Canberra today is the worst possible result. It’s a vote for the status quo — for more uncertainty, for more ineptitude, for more miscommunication and lack of confidence — at a time when the government needs to be providing reassurance to both consumers and business that it has a clear plan both to improve economic growth and provide a path back to a budget surplus.
While Labor ripped itself apart between Julia Gillard and Kevin Rudd, it kept delivering economic growth. As the Liberals go to pieces over Tony Abbott’s prime ministership, it’s the lack of growth that should be the focus of everyone’s attention.
Maybe you could add some substantiation to your bald statement that “Domestic economic growth has been severely affected by the government’s policy decisions, inability to explain them and its disastrous 2014-15 budget.”
But I don’t expect you to. It’s now a received truth on the left I guess.
As most of the key budget measures have been blocked by hostile Senate, I struggle to see exactly how government policy has tanked the economy.
Terms of trade, weak international demand for our exports, a flat economy with not much growth and low business confidence makes sense.
Tell me what the government has done to damage the economy. I dare you.
David Hand, for a start the renewable energy industry has been seriously undermined.
Er, getting rid of the car industry?
Saying the Australian Submarine Corporation couldn’t build a canoe?
Great way to help stability and confidence.
As most of the key budget measures have been blocked by hostile Senate, […]
An enlightening way to describe a system working in precisely the way it was intended.
[…] I struggle to see exactly how government policy has tanked the economy.
By doing nothing to try and address real economic problems, but instead focus on punishing people who don’t vote Liberal.
The renewable energy industry is a drain on our economy not an asset. This is demonstrated by the wails of agony when the renewable energy target has been challenged. The industry NEEDS regulation to force energy companies to by their production because it is so expensive. The great irony is that it is the big end of town that is hocked up in renewables and wants the rent.
The car industry. Hulloooo!! They’re still making cars in Geelong and Adelaide the last time I looked. And gobbling up $250m of taxpayers’ money every year at the same time- that could be better spent elsewhere.
ASC. Well that organisation costs a lot a to maintain subs that can’t actually put to sea but I fail to see how that has tanked the economy either. Especially as the heroes of the downtrodden “most vulnerable” have stopped the government legislating any of its reforms. Yep, people are quaffing $300 bottles of wine at Rockpool tonight and going to their GP on the taxpayer.
You all make my point very well. This idea that the government has stuffed the economy is lefty doublespeak.