The Prime Minister has claimed that Australia had done much better than the United States in weathering the economic crisis. Well there is no doubt about that. Ms Gillard is right. She said that the US had “lost 6 million jobs [that] people had been chucked out on the street after losing their home and jobs [and] we wanted to avoid that.” And so say we all. The US has lost a lot of jobs. Since the end of 2007 to end June 2010, the US has, in fact, lost over 7 million jobs and mortgage foreclosures were running at 300,000 per month during part of 2009. The PM is right again.
The problem with all of this is not the facts on the economic situation in the United States, and elsewhere, compared with that in Australia, but the conclusions to be drawn.
Do we draw fanciful and unbelievable conclusions or sensible and believable conclusions, even if it is election time; that is the question?
Strangely, you might think, in view of the facts, both the PM and the US President laud their own government’s economic achievements. Why not; they have both more or less done the same thing. In fact, Obama seems to have slightly outdone Gillard. While Australia is spending around 5% of GDP on stimulus, the US is spending around 6%.
Both the Australian and the US governments equally claim tremendous success for their policies. Gillard now claims that stimulus spending created 450,000 jobs; growing, like Pinocchio’s nose, from the 225,000 only just recently claimed in the budget papers. The US government claimed last month that 3 million jobs had been created or saved; growing also by the month. And we can fully expect further upward revisions; the more so if unemployment remains very high.
Leave aside the complete fiction of these numbers. Simply accept that, however they stretch our credulity, there is no reason to think that the stimulus in Australia on pink batts and school halls has been any more dramatically successful, or unsuccessful, than the equally wasteful spending in the US.
The obvious conclusion is that Australia’s much better economic performance is down to other things – like China’s continuing demand for our mineral resources; like the better position of our banks and insurance companies; like the absence of any gross oversupply in the housing market or overproduction of unwanted products on the scale of the US motor vehicle industry; and like the very healthy budgetary position inherited from the Howard government. The problem here for the Labor government is not being able to claim credit for any of this. And Gillard wants to debate it!
If I were advising Tony Abbott I would suggest he choose a time particularly convenient for him and agree to an economic debate (perhaps also encompassing whether pensioners deserve large pension increases). Julia Gillard may be a smooth talker but smooth talk can only go so far in obscuring the obvious.
First, it is obvious that the better performance of Australia compared with the United States has nothing to do with stimulus spending because that is common to both countries. It must, therefore, be to do with other things and none come under the heading of achievements of the Labor government. Second, the stimulus spending has been wasteful, and how, exactly, do you defend pink batts and overpriced school halls? Third, we now have growing debt which is placing upward pressure on interest rates, even if the borrowing is conducted overseas (Tony don’t be confused about that, speak to me if all else fails). Fourth, is it better to bring the budget into surplus and pay down debt through spending cuts or by increasing taxes on Australia’s most productive and successful industry?
Even I might win this debate and I am past my prime and have difficulty with complex sentences until après-midi.