Tuesday 27 August 2013

Abbott's Economic Credentials

I'll admit - I reckon Tony Abbott and the Liberal Party have got some good policies. He wants to put more funding into Dementia research and the Australian Institute of Tropical Health and Medicine.

Their Paid Parental Leave scheme treats it as a "Leave" scheme like any other, like Sick Leave, Long Service Leave, Carer's Leave etc.. It should be paid at replacement wage. Whether or not people on $150,000 deserve the payment is a question for another time. But it's not a bad idea overall.
They want to lower Company Tax for most businesses, and want to get rid of the School Kids Bonus (which was just about buying votes anyway).

These are good. But the problem is, there is a LOT of bad to go with it.


Leave aside Abbott's belief about Same Sex Marriage, and his various comments about women. Leave aside the various gaffes he has made over the years. I've commented on those before.

Let's look specifically at Economics. This is the most important election issue to many voters, esp. to Liberal voters.

Tony Abbott promises to be a terrible economic manager. There can be no doubt. Abbott is a “Big L” Liberal, like John Howard, who spent a huge amount on tax cuts during the last few years of his Prime Ministership. This was wasteful. In fact, the International Monetary Fund called it Australia's most wasteful spending period in history.

Howard is Abbott’s idol, and one of his major influences. In comparison, people like Malcolm Turnbull and Kelly O’Dwyer are considered “small L” liberals, meaning they believe more in free markets, less government spending and greater social libertarianism (both support Same-Sex Marriage, for example).

So what’s the problem?

1. He believes in spending a lot of money. And not saving much. Many people believe Labor has been wasteful whilst in Government. And maybe they have. But this election, their Promises add up to NEGATIVE 14.99 BILLION in spending (i.e. a saving of around $15bn). The Liberals promises add up to 58.63 BILLION in spending (i.e. a spending of around $60bn). The Crikey Cash Tracker has a detailed analysis of each and every policy!
No matter how wasteful you think Labor might have been (and they have wasted a lot of money), you can't ignore these numbers.

2. Economists are concerned. Now, economists typically support the Liberal party, on average, due to the parties strong ideology on free markets. Fair enough. But when you have an Economist who has been bagging Labor for some time, coming out and saying their fiscal strategy is “very troubling”, and that they have “complete and utter lack of detail”, there might be some concern. . He isn’t the only one.

3. Labor says the Liberals have a $70 billion “black hole” to fill. Abbott says it’s not true. Independent reviewers agree. Fair enough.
 
Then a major, well-respected Economist says it is $30 billion.
An independent economist, chief economist in fact. But nope, apparently he is wrong too.
That seems fair. So let’s prove it. Let’s have a look at all the savings measures announced by the Coalition. How all these policies (some which are very good!) will be paid for).

Oh wait. There are no costings.

Not yet at least. Maybe soon? The Election is still 11 days away right?

Well, you can be reassured they will be released NEXT WEEK. i.e. just days before the Election. Very little time for journalists to scrutinise. Very little time for voters to make a judgment.

Abbott carries on about Australia being in a “Budget Emergency”, and how we have such huge debt. Yet then goes on to announce 60 BILLION dollars in spending, and doesn’t show us where the money will come from.

He wants to get rid of the Carbon Tax, which is raising money. He believes it is hurting the economy. Okay. So how will he deal with Climate Change? He wants to instead spend billions of taxpayer dollars every year on his “Direct Action” policy. AND he wants to keep the billions in handouts the Government paid to compensate for the Carbon Tax. But isn't he getting rid of the Carbon Tax? Oh well.

Take away billions in tax revenue, and spending many tens of billions more? Sounds great. Really sounds like a guy who believes in “small Government”, getting Government out of our lives.

Sounds like a guy we can trust with the Economy! And someone who is serious about his economic policies.

He says "trust me".
I say, I don't.

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