Economy

Sep 19, 2013

Economic reality mugs the Liberal economic agenda

The downgrade of Western Australia's credit rating illustrates how governments can't merely talk about fiscal discipline, they need to show it. Glenn Dyer and Bernard Keane report.

There was a decided air of delusion in Canberra yesterday. While Tony Abbott was kicking off his Prime Ministership by refighting the climate wars and displaying how extraordinarily petty he can be, reality was mugging his economic agenda.

Standard & Poor’s downgrading of Western Australia’s AAA rating carries one big message for the new federal government — especially Abbott and Treasurer Joe Hockey — and that’s all about political will.

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16 comments

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16 thoughts on “Economic reality mugs the Liberal economic agenda

  1. Jimmy

    “Don’t be surprised if, down the track, independent analysts start wondering exactly how committed this government is to sound economic and fiscal management.” DOwn the track? Surely they cna see right now they have no interest in it – their economic policy roughly equates to take from the poor and give to the rich and don’t do anything that might scare the voters.

  2. Jimmy

    “Don’t be surprised if, down the track, independent ana l ysts start wondering exactl y how committed this government is to sound economic and fiscal management.” DOwn the track? Surel y they cna see right now they have no interest in it – their economic pol icy roughl y equates to take from the poor and give to the rich and don’t do anything that might scare the voters.

  3. David Hand

    Are you guys for real?

    There was Rudd 3 weeks ago shouting “CUT! CUT! CUT!” as a description of a likely Abbott / Hockey economic management plan.

    3 days ago you published an unflattering critique of Hockey’s decision to stimulate under the headline, “Stimulating hypocrisy from Hockey: Joe’s changed tune”.

    Today, you are poking the government exactly for what?Cutting? Stimulating? Being deluded??

    If you want to read delusion, read Crikey.

  4. Jimmy

    David Hand – The fact of the matter is that the current liberal party economic policy is a complete mess, for 3 years they banged on about the need to get the budget into surplus but then promised a series of big spending policies like the PPL and direct action while cutting revenue streams keeping the carbon tax compensation and winding back means testing on any number of things.
    This lead to the fact that if they were going to get back into surplus they would have to “cut, cut , cut”.
    No knowing those cuts would hurt their election chances the libs simply folded on the prospect of returning to surplus promising only to “be on track to a believable surplus” by the end of their first term.
    All this ends up in a situation where their fiscal priorities are muddled and a surplus is completely reliant on a return to above average GDP growth.
    This is not good for the economy. Running deficits over the past few years and in the next couple is fine and makes good economic sense but we have to get on a path way of cutting back some of the middle class welfare Howard introduced to remove the structural deficit we have – Abbott is currently doing the exact opposite.

  5. klewso

    “Australia is open for funny business once again!”

  6. robinw

    David Hand – I suggest that you forgo the indignity of reading such material if you want to save yourself from the excessive love of masochism that you seem to be rushing towards. Other than your brief respite of comic relief I found the whole article somewhat depressing, reminding me as it does of what we have to look forward to for the foreseeable future, a future that appears to be petty, spiteful, vindictive and mind numbingly doctrinaire. So thanks for the humour, I appreciate it but please don’t cause yourself too much pain just to lighten an absurdest situation.

  7. Mike Bull

    So, let me get this straight: WA’s rating is being downgraded because it intends to reduce its debt, which means cuts in the short-term to reduce the risk of long-term bankruptcy.
    Isn’t this simply pitting long-term risk against short-term risk?
    Give the Liberals some time before you get out the knives. They are working from a different ideology (usually more focussed on the long-term). Save the vitriole for later, if and when they fail. This rant just comes across as sour grapes.

  8. Jimmy

    Mike Bull – No WA has been downgraded because while talking tough about paying down debt it actually isn’t doing anything of the sort.
    As the article says “Premier Colin Barnett has recently reversed a number of revenue-raising measures contained in the 2013-14 budget” and “The lack of political will in WA is not the first time S&P has judged a country and found it wanting.”

    The whole point of the article is that the Libs used debt and deficit as a weapon against the ALP but when it came time to do something about it they stepped back in favour of middle class welfare to buy votes.

  9. Bill Hilliger

    Some say of the new government that all pensions and assistance payments are being closely looked at with a view to downgrading these seemingly generous payments.

  10. John Ryan

    Well Well if that is true I would not like to be Abbott when he starts cutting old age Pensions.
    If he does that I hope he calls a DD quickly as he wont get back

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