Sunday, 17 May 2009
Anyone clinging to the hope that there was substance to the economic debate between the major parties, and that the coalition would have done something different if they were in, would surely have had to let it go after Turnbull’s Budget reply speech on Thursday. After all the coalition huffing and puffing about throwing money away and deficits, the only specific Budget measure he opposed was a reduction in cash hand-outs to those on medical insurance, which he promptly replaced with a tax increase, leaving the deficit not a cent different than before. Having done that, he then capped it off by reversing his earlier opposition to another tax increase, the one on alcopops. No wonder Bronwyn Bishop, probably still under the delusion that the Liberals stood for less taxes and lower spending, went off in a huff.
Of course, Turnbull’s U-turn on alcopops was to deny the government a ready double dissolution trigger. Given the state of the coalition, they were in no position to fight an election campaign. But it would probably be safe to say the government was just as relieved. Despite their high polling, the lack of firm base in the electorate naturally makes them nervous about going without a good reason and this pretence of an economic debate would not be it. Both parties were just talking tough about going to the electorate with economic programmes that they didn’t have.
Without an economic alternative the coalition really only has two tactics. First, a sort of guilt by association, trying to take credit for the boom when they were in and attach blame for the downturn to Labor on their watch. But unlike the way that the inflation and unemployment of the mid 1970s were blamed on Whitlam’s spending, rather than the oil shock that hit all the world’s economies, Rudd has fairly successfully avoided taking the blame for this one. However, there is a fine balance the government needs to have between avoiding responsibility and being seen as capable of doing something, hence the empathy and the hand-outs that are now becoming little more than repackaged prior commitments.
Labor’s danger of being seen to be out of control is why the coalition’s second tactic is more effective, raising the debt issue. Not that it will do the Liberals much good, as shown on Thursday, they are incapable of proposing anything to reduce the debt. But it does undermine the government (and Treasury for that matter) as making it look a victim of events. It is an act of political nihilism by the coalition to the detriment of both sides.
Meanwhile back in reality, the size of Australia’s debt is pretty well neither here not there. Australia’s economy will, as usual, be largely determined by what is gong on overseas, especially in the US where the economy continues its slide down. There the debt is a real issue with the US continuing to pump the economy with no real means of financing it, instead probably more likely to devalue it through inflation. The US looks set to do to everyone else’s economy what Britain did to the rest of the Empire during the Great Depression, drag them down to save its own.
Posted by The Piping Shrike on Sunday, 17 May 2009.Filed under Tactics