If the campaign reports so far are any guide, the main items on the agenda for a debate between the two leaders on economics will be debt and waste. The words have an easy resonance among voters, particularly Tony Abbott’s framing of public debt as $100 million a day. There will be disputes about the Coalition’s costings of election promises, and about who will bring the budget to surplus sooner.
Such questions mainly concern fiscal policy – the management of public budgets. Just as a company must manage its finances, so too must a government. But there is more to economic management than keeping a bank account and preparing a cash budget – much more.
There appear to be significant differences between the economic policies of the two main parties, but they can be ascertained only by inference. Labor, with its emphasis on participation in education and economic infrastructure (including broadband), seems to be about building up economic assets. By contrast, the Coalition, with its emphasis on public debt, is focussed on the other side of the balance sheet. Labor, by most measures, is more committed to introducing a price on carbon (“a big new tax”), even if it has been clumsy in its approach. The Coalition, as demonstrated in its use of its Senate numbers, is opposed to a carbon price. Also, Labor’s resource rent tax is clearly designed not just to raise revenue, but also to protect Australia from the adverse consequences of commodity booms – the “Dutch disease” as it has come to be known, or, in this hemisphere, the “Nauru Disease”. In other words, Labor seems to have ideas about re-structuring the economy for longer-term competitiveness, when we can not so easily rely on mineral and energy resources and when we must bring to account the full cost of greenhouse gas emissions. The Coalition, by contrast, seems to be more accepting of alaissez faire approach – enjoy our prosperity now, and don’t worry about the longer term consequences.
I would therefore like to see a basic question put to both parties, along the lines:
“What are your plans for Australia’s economic structure – for coping with a future when we have to compete with our skills, technology and entrepreneurship, when we have to pay a full price for carbon, and when we can no longer rely on the easy revenue of mineral and coal resources?”.
And some more specific questions:
“Audit processes have uncovered some waste in the Government’s school building program, but what is the protection against waste in handouts, such as generous maternity allowances – how do you make sure recipients do not blow it on the pokies? And what is the waste in inaction, in allowing unemployment to rise? Is there not too much emphasis on only those aspects of waste that can be easily measured?”
“Why are you [both parties] so concerned about debt and so unconcerned about the public balance sheet? Any well-run company uses debt to finance productive assets; should not a government do the same? Why does the Coalition, with its promise to reduce infrastructure spending, not wish to improve the asset side of our balance sheet?”
“Why is there so much focus on government debt, which is miniscule beside other OECD countries, while there has hardly been a mention of household debt or of foreign debt? What is your party doing to restore our household and trade deficits?”
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