When we posted How are the ‘adults’ managing our economy?
on The Political Sword
in April it seemed as if Turnbull’s administration of his Coalition couldn’t get any worse. We were wide of the mark! Now he sits apprehensively and indecisively on his house of cards, on tenterhooks lest he lose his balance, praying it doesn't collapse.
That piece was written as the 2017 Budget was being prepared. Scott Morrison was warning us about what we might be in for. Knowing that debt would increase, he tried to butter us up with talk of ‘good debt’ (spending on infrastructure) and ‘bad debt’ (recurrent spending on, for example, welfare). With his credibility in the doldrums, it is doubtful if anyone listened, let alone believed him.
The April piece on TPS
Who will ever forget the insults, the slurs, and the slander that the Coalition heaped upon Kevin Rudd, Julia Gillard and Wayne Swan as they managed the economy through the Global Financial Crisis and beyond? They were depicted as children playing games in their political sandpit with no idea of what they were doing, making one catastrophic mistake after another.
We know how they have done – appallingly. The Coalition’s incompetence and mal-administration is now legend.
Remember how the Coalition boasted that the children should get out of the way and let the adults take over, insisting as they did that they were the experts at economic management. So convincing was the rhetoric that the electorate believed them and has consistently rated them as superior to Labor in economic management in opinion polls.
Recall the ‘debt and deficit disaster’, a mantra with which they assailed Labor for years. Remember the ‘intergenerational debt’ they accused Labor of accumulating.
Since their election in 2013 they have had their chance to show their much-vaunted expertise under the skilled management of Tony Abbott and Joe Hockey, and then Malcolm Turnbull and Scott Morrison, with Mathias Cormann a consistent shadowy presence. How have they done?
Here are some contemporary facts:
Wages growth is the weakest on record
, dating back to the late 1990s. Underemployment remains high with an increasing trend towards part-time work, creating the “gig” economy.
Reserve Bank governor Philip Lowe
warns that record high household debt and record low wage rises are constraining consumer spending and hurting the economy.The economy is under performing
and will continue to do so through 2017 and beyond.
Stephen Koukoulas summarized the situation in The Guardian
Based on the performance of the economy since the last fiscal update in December 2016, the budget is likely to confirm that this is a big-spending, big-taxing government with a strategy for continuing budget deficits and rising debt as it funds some of its pet projects.
It is all but certain that government debt will remain above 25% of GDP in 2017-18 and the forward estimates, meaning the government will be the first in the last 50 years to have spending at more than a quarter of GDP for eight straight years.
At the same time as spending is entrenched at high levels, the tax to GDP ratio is set to exceed 23% of GDP for only the eleventh time in 50 years. Tax revenue is growing solidly, in part in line with the expansion in the economy.
It is also close to certain that the level of net government debt will be projected to reach 20% of GDP, up from 10% when the Coalition won the 2013 election and the highest since the 1940s when the war effort boosted borrowing to record highs.
At as 30 June 2016, gross Australian government debt
was $420 billion. In June 2017 the Turnbull government breached the $500 billion mark, (expressed alarmingly by some economists as half a trillion dollars
) thereby doubling the deficit it inherited from Labor. Gross debt is projected to exceed $550 billion this year. Morrison is hoping to recoup some of this in this year’s budget
with his $6 billion tax on the banks, but still intends to give a $65 billion of tax cuts to business!
We all know that housing affordability is worsening, locking out of the market young folk who do not have wealthy parents. The Coalition refuses to do anything about this as it sticks to negative gearing and the generous tax concessions around capital gains, thereby perpetuating the advantage moneyed investors enjoy over the young.
And as for the NBN, it continues to be a hybrid, copper-dependent mess that is not delivering what business needs, is rolling out far too slowly, and eventually will cost more than Labor’s superior FTTP design. It has been an Abbott/Turnbull debacle from the moment Abbott instructed Turnbull, then communications spokesman, to ‘Demolish the NBN’
. Will it ever recover from that?
Need I give you any more evidence that our nation is steadily going backwards under the mal-administration of our economy by the Turnbull government?
On top of all this financial ineptitude, we have witnessed chaos writ large as Turnbull and the fractious conservative right squabble about how to handle the issue of same-sex marriage.
The chaos intensified when a postal ballot that will cost $122 million, was chosen. Astonishingly, the ballot won’t be carried by the Electoral Commission, but by the Bureau of Statistics, which has shown that it can’t carry out even a routine census proficiently. The High Court will decide if such an arrangement is constitutional. How the ABS will conduct the ballot is a mystery, as it’s a statistics-gathering organization. Long delays are likely before we will know the outcome of yet another Turnbull government stuff-up.
Then, as if that shemozzle wasn’t enough, Turnbull and his ministers have become entangled in the dual citizenship fiasco. They have been quite unsure how to handle it, and woefully inconsistent in their approach. Turnbull was only too ready in his characteristically sarcastic style to lampoon the Greens after Scott Ludlum and Clarissa Waters discovered their dual citizenship and resigned. “It shows incredible sloppiness on their part” bellowed our PM in parliament. Now, with several of his own ministers, no less the Deputy PM, the Deputy Leader of the Nationals, and his Minister for Industry, Innovation and Science all caught up in the saga, Turnbull’s barefaced inconsistency has been exposed. Canavan has been excluded from ministerial duties, while Joyce and Nash are permitted to continue as if nothing had happened!
All the time Turnbull is fighting a guerrilla war with the hard-right agitators in his party room, who threaten him with retribution unless he follows their dictates. He is so shackled, hog tied, clapped in irons – use whatever metaphor you like – that he is rendered impotent strategically, administratively, politically, and as a leader.
The voters continue to be unimpressed. We have now had the eighteenth Newspoll
in a row where the Coalition trails Labor, this time by eight points: 54/46. If this trend continues, by February of next year Turnbull will have passed Abbott’s infamous record of thirty bad polls in a row, Turnbull’s raison d'etre
for upending him.
Essential poll shows the same result. Turnbull’s satisfaction score continues on its poor trajectory, now minus 20. The Guardian
features images from the Essential Report
that illustrate Turnbull’s dilemma graphically.
Now that the Coalition sees defeat coming at election time, worried that Shorten’s “inequality” meme is biting, Mathias Cormann was sent out to launch a panicky attack on him in a speech at the Sydney Institute.
Writing in The Age
in an article titled: 'Socialist revisionism': Mathias Cormann's doomsday warning of 'success exodus' under Bill Shorten
, James Massola says: ‘Finance Minister Mathias Cormann has painted a doomsday scenario of Australia under a Shorten government, claiming a "cocky" Labor leader is relying on the politics of envy to propel him to the Lodge as people forget the failures of socialism. In an extraordinary speech …Cormann charged Shorten with making a "deliberate and cynical political judgement that enough Australians have forgotten the historical failure of socialism" and exploiting the politics of envy’, even describing Labor’s policies as akin to communist East Germany
Need I go on further to convince you of the widespread paralysis that is afflicting Mal's Coalition? You may care to remind yourself of what we published in April, just four months ago, in How are the ‘adults’ managing our economy?
To do so click here
The piece concluded:
The unavoidable conclusion is that this ‘adult’ government is economically incompetent, driven by its conservative rump, quite unable to see its way through the nation’s economic difficulties, incapable of analyzing the economic situation, inept at deriving solutions, bereft of planning ability, and hog-tied by ideological constraints. Moreover, it is so unutterably arrogant that it cannot see its ineptitude. And even if it could, would it be capable of doing anything about it?
Has the situation improved? You be the judge. Click here.
As a substitute for informed opinions, all we get is self aggrandizement and platitudes from Turnbull, and a torrent of meaningless drivel from the Coalition's two motor-mouthed financial Daleks: Morrison and Cormann.
How has it come to this with the adults in charge?
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