Joe Hockey digs himself a deeper hole
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Joe Hockey’s day just got a lot worse. After a difficult 24 hours in which he attacked Gordon Brown, Barack Obama and the G20 and declared he wanted to cut Government spending by more than 3% of GDP, or over $40b, Hockey this afternoon declared himself in favour of low interest rates over employment. Reacting to today’s unemployment figures, Hockey claimed vindication for the Coalition’s argument that the stimulus should be withdrawn, despite the loss of more than 30,000 full-time jobs, and blamed the Government for putting upward pressure on interest rates. “So you’re saying,” one journalist asked, “it is more important to keep interest rates low than to spend money to keep people in work?” “Yes, yes,” Hockey replied. Hockey declined to specify how he would curb Government spending to below 24% of GDP, a level he said yesterday should be the “emergency or maximum” level. Peter Costello managed to reduce spending below 24% once as Treasurer, although it was 24% in the final year of the Howard Government. The Government found itself with an embarrassment of riches for Question Time material today, all of it provided by Hockey’s indiscipline and inability to find the same careful phrasing for the Coalition’s economic arguments as his leader Malcolm Turnbull manages. There are questions being asked about Hockey’s capacity for the difficult shadow Treasury portfolio, but the Coalition has a broader problem that economic data appears to stubbornly be falling the Government’s way at every stage of the economic debate. |
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8 Comments
Poor Joe, tries hard, somehow misses the point.
Hockey is a lightweight - clearly he’s in over his head.
“So you’re saying,” one journalist asked, “it is more important to keep interest rates low than to spend money to keep people in work?”
Any business’ ability to furnish any loans or manage cashflow directly impacts their capacity to employ.
Just look at Fairfax.
Explain the flaw in Hockey’s logic?
“…the Coalition has a broader problem that economic data appears to stubbornly be falling the Government’s way at every stage of the economic debate…”
Today’s snapshot:
*Australian unemployment unchanged at 5.8 per cent
*27,100 jobs lost
*More people gave up looking for work
So this shows things are “falling the Government’s way”?
Thank God most journalists are not an economists.
MPM - the flaw in your logic is that interest rates are already at record lows, and using this crude lever to flood cheap money into the economy will lead to brand new bubbles of unproductive speculation.
Targeted stimulus spending is a more effective approach to fill the hole left by private funding in a way that directs the money towards sorely neglected infrastructure spending.
If the government tightens the purse strings too quickly, we will end up with a sudden jump in unemployment, stagnant wages, and potential deflation, which is a dire situation for people trying to service debts.
You get the feeling that the opposition are kicking themselves every time a positive economic parameter is announced. They cant believe their bad luck, why wont things get a lot worse I can hear them wailing.
This unfortunately appears to be their strategy for returning to government. Wait for things to turn to custard, then the ungrateful wretches will vote us back in.
Their major problem is they appear to be sulking because things are not going their way and they are not doing the hard work of developing policy which can be argued and sold.
While Joe Hockey may not be the world greatest spokesperson for economic policy, I think this is another example of the lazy ‘gotcha’ journalism that seems to be the stock and trade of Aus politics. What if the question was reversed? You could instead have a headline about Hockey not caring about interest rates.
At some level there is always a trade off between things like interest rates, government spending and employment. It would be nice if politicians had the leeway to have a nuanced discussion about where the best balance might lie, and whether the current approach sits at that balance point point. Instead, what we have is ever statement made by a politician reduced to a binary proposition.
This fact force politicians to ‘stick to the script’ and only utter carefully crafted bland platitudes, as epitomised by K Rudd, the ultimate script talker (although he does pull it of with a little more nuance than some of his even more robotic colleagues like Swan and Wong for instance). Anyone who has some personality or realism, like Hockey, Abbott, Garrett (at least before the ALP managed to completely suck the life out of him) is inevitably labeled as prone to ‘gaffs’ (journo speak for accidentally telling the truth) and end up being replaced by someone more boring.
There was some discussion a few weeks ago about the problems with politicians not answering questions. I’d say the problems lies more with the stupid questions than the boring non answers. The question “is it more important to keep interest rates low than to spend money to keep people in work?” shows a much greater failure in comprehension of economics than Hockey has ever shown, and the smart response to being offered such a noose is to simply not answer it, as it usually done.
When we get journos who ask good incisive questions, and report the answers without resorting to binary positions and gotcha’s then we might see some questions being answered by politicians. Until then the smart ones will continue to be boring and the honest ones continue to sit on the back benches.
spot on Jeebus…
the spotlight needs to be on the quality of the governments spend in light of an illiquid debt market.
This passes for journalism?
Perhaps for Crikey and Bernard Keane.