This is not a long piece, because there is little worthwhile that can be said about Malcolm Turnbull’s reply Rudd’s debt to burden future generations in the SMH on August 1. There has been so much else to write about these last few days that Turnbull’s piece has slid almost unnoticed into the background. As could have been anticipated, the debt and deficit bogy has been given a thorough outing, which few commentators bothered to address until Ross Gittins wrote his well-argued piece in yesterday’s SMH, Don't let Turnbull fool you: debt is not a dirty word. I need say no more; Gittins has said all that needs to be said to debunk the debt and deficit story. [more]
It was predictable that Turnbull would not write a piece based on ideological thinking, as Kevin Rudd did in The road to recovery in the SMH on July 25. That is not Turnbull’s style, perhaps the reason why he did not contribute to Liberals and Power – The Road Ahead edited by Peter van Onselen, which invited ideological positions to be taken and defended.
Whether one agreed or not with Rudd’s thinking or assertions, it would be difficult to discount his effort to explain to the Australian people where we are in the GFC, how we got there, what the Government has done, and what is planned for the time ahead. Call it spin if you will, and some was, but it made sense even if one disagreed with his some of his arguments.
It was noticeable that in Rudd’s piece Malcolm Turnbull was not named once, nor did the words ‘Liberal Party’ or ‘Coalition’ appear at all. The focus was on the situation and the Government’s response. Even the words ‘neo-liberal’ and ‘free-market fundamentalism’ were each used but three times. In contrast, Turnbull’s response is focussed almost entirely on what the Government has done. That is not altogether surprising, but it does highlight starkly the Coalition’s persistent approach to the GFC of condemning the Government’s actions and underscoring their supposed awful consequences, rather than proposing an alternative ideology, another explanation of how the GFC came about, what it would have done and what it would have cost to do so, and a plan of what should be done as the crisis unfolds.
In attempting to refute Rudd’s contention that governments stood too far back before and during the unfolding crisis, Turnbull asserts that rather than the crisis being caused by insufficient government action, it was caused by too much government action in encouraging lending in the US to those who could not afford to repay a home loan. While there is some truth in that, Turnbull skirts around the poor regulatory mechanisms in the US that allowed such sub-prime lending, and does not mention the effect of the creation of a host of associated risky financial products often supported by dubious ratings from incompetent and avaricious ratings agencies that were sold around the world and gobbled up unthinkingly by incautious and greedy investors.
Turnbull’s focus is on his ‘debt’ mantra. For those who enjoy counting these things, the word ‘debt’ is mentioned 25 times, and in case you’d forgotten who was responsible for the debt, ‘Rudd’ is mentioned 30 times and ‘Prime Minister’ eight times.
So his focus is on what terrible things Rudd and his Government have done and how the debt racked up will burden future generations. Disingenuously he does not mention once that most of the debt was directly the result of a $210 billion drop in revenue over the forward estimates, a reality he would have faced had he been PM. Even when he uses the words ‘global financial crisis’ which he does five times, it was only to talk about what he believed was its origin. He does not expose the realities of it in terms of Government revenue loss, reduced economic activity and unemployment. He writes as if the GFC had scarcely any effect on this country and that Rudd and his Government have embarked on a reckless and wasteful spending spree for no good reason and to no good affect, and in the process has needlessly accumulated massive debts that will burden every man, woman and child for generations. He asserts we are heading for a debt of $315 billion but conveniently leaves out all the detail of how and when this will be reached, and does not mention that a Coalition scheme would rack up almost as much.
This piece is not a substantial analysis of the GFC and the approach that ought to have been taken. Although he says Rudd has ‘no credible strategy or plan to get Australia through the difficult conditions ahead’, searching for his plan reveals that the only one he mentions consists of support for small business in the form of ‘tax loss carry-backs, fairer insolvency rules, better incentives for hiring apprentices and a major assault on bureaucratically imposed regulation and compliance costs’, no doubt worthwhile, but hardly a comprehensive plan for getting Australia out of the near-recession it is in and the rising unemployment it is experiencing.
Turnbull is fond of accusing Rudd of being all spin, but in a head-to-head contest for pure spin, Turnbull’s essay beats Rudd’s hands down.
If Turnbull wants genuine observers of our economic situation to take him seriously, he will need to do much better than this essay, which is simply his debt mantra writ very large. It deserves as little attention as his mantra, built as it is on deliberate misrepresentation of the facts and omission of many of them, in the hope that the people will be hoodwinked, and unthinkingly accept his word as gospel. Many rusted-on supporters will and do, but the open-minded will see his spin for what it is.