I think the Liberal party misinterprets what is to be the correlation between Australia's wave of economic prosperity and their appointment to running the country's economy. A huge part of Australia's economic performance (and indeed that of all first world developed countries) is intrinsically dependent on the global economy. This is because we have always been a free-trade, capitalist society and always will be. We will be subject to the highs and lows of the global market forces (like the global financial crisis), since we are networked into it.
Labor claims they saved Australia by immediately intervening to put a stimulus package into everyone's pockets. There is truth to this claim, as they effectively reversed the immediate decline in unemployment and consumer confidence caused by the GFC, but the damage that was done to Australia via the GFC was through the complete expenditure of our budget surpluses that ran throughout the entire Howard-Costello era (the surplus isn't exclusively championed because of Coalition practices either, but I'll get to that later). We took a hit -- but not a hit that directly affects the lifestyle of our population (as we never reached a recession) -- it's through debt, and we're expected to pay it later. However, that is a normal and textbook knee-jerk reaction, which makes sense. If you don't intervene as a government, people's jobs will be foregone. The debt isn't ALP's fault -- it's simply using the surplus for its intended purpose, irrespective of which government is in power and/or which government was fortunate to create it:
Before people start worrying about debt, remember this:
- Global economic meltdowns must be prepared for, as they are expected in free-market economies -- by having surpluses to begin with.
- Surpluses exist mainly to prepare for bad turns in the economy or other potential disasters, irrespective of which government is in power. It is basic economic management -- much in the same way you have a personal savings account to possibly prepare for disasters beyond your control.
- In perpetuity, planning every year for surplses serves no purpose.
- In perpetuity, planning every year for defecits also serves no purpose.
^ Thus, both of Shaya's statements about Liberal and ALP's annual budget targets are incorrect (ALP claims to re-establish a surplus by as late as 2013).
When you think about debt, what does it really mean? It means the government is borrowing money, investing it into a weakened Australian economy, to stimulate it. It's not a waste when the money being spent goes directly back to its people. It is best seen as a rebirth, with repayments that have to be made later (presumably by the government that rides the future years of success -- and that historically isn't just tied to Liberal).
What I'm also trying to demonstrate, is that I believe ALP and Liberal should share fairly equal credit in Australia's advancement as a prosperous nation -- it is absurd to think that the Liberal party is the sole reason why we're well off. The institutionalized federal economic pillars that give us our security today, predates many governmental eras. Think about this:
- ALP introduced the Federal Reserve Bank -- it manages interest rates to ensure Australians don't over-borrow and bankrupt banks -- this type of financial regulation was missing in USA's economic policy because America was too lassiez-faire -- and hence several major banks were bankrupted, starting the domino effect which was the GFC. Americans overborrowed, overlent and many lost their homes and businesses. Obama just recently passed the bill for 'Wall Street Reform,' - policy that has protected Australia from that very scenario since our Federation.
- ALP introduced business deregulation in the 1980s; it is a world leader in doing so -- reducing red tape to set up businesses and having the world's fastest response time to setting up a business. Liberal followed course, but went much further, too far in fact, with WorkChoices; That cost them the 2007 election (although people will tell you Howard didn't win because people were 'over' him -- elections are never won because people want change -- elections are won because incumbents screw up).
- The Liberals have currently lost their lost their edge to defend themselves as strong economic regulators, because Abbott-Hockey-Bishop have not had the exposure to economic policy, in the same ways Howard-Costello did. Abbott has currently rejected every single offer for a debate against ALP regarding the economy, because it knows ALP can sell its strengths.
All I'm trying to say is, people fail to recognize the long term impacts of political
economic policy-making. ALP is about as competent as Liberal is in managing the economy. The only standout differences is that ALP are willing to spend to stimulate the economy for the purposes of economic socialism, vs. Liberals firm view of economic liberalism. They are fundamentally different ideologies, but the lines between their beliefs and their actual outputs are blurred -- because they are constant rivals.
