May 13, 2014

Stand down, there is no budget emergency after all

Reports of the budged emergency have been wildly inflated in order to give the rich a free pass, writes Richard Denniss, economist and executive director of The Australia Institute.

Treasurer Joe Hockey expects unemployment to rise and business investment to fall. He plans to shed 16,000 public sector jobs into a labour market that Treasury says is softening. Indeed, Treasury states that the proportion of people who are employed or looking for work will continue to fall, “reflecting the expectation that employment growth will not be strong enough to entice discouraged workers to resume their job search”. That’s Treasury code for “people will stop looking for jobs because there won’t be many to look for”.

So what’s a Treasurer facing a softening labour market and rising unemployment to do? Make life hard for the unemployed, of course. Unemployed people under 30 will bear the brunt of the budget pain, being forced to wait six months to apply for Newstart (i.e. the dole). Rather than accept responsibility for rising unemployment, the Abbott government is clearly setting out to shift the blame onto the victims.

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5 thoughts on “Stand down, there is no budget emergency after all

  1. Krueger Paul

    When I think of students of history I do not get a mental image of the Coalition.

  2. @chrispydog

    Roads eh? None of them will be the information superhighway unfortunately.

    A government, not with vision, but high-vis vests.

  3. magoo

    “One of them is going to be wrong.”
    It’s all labors fault

    Good article Richard

  4. Limited News

    The 6 month delay on unemployment benefits will drive down wages in the informal economy. A young unemployed person presently receiving NewStart who gets job, but then loses it because “it didn’t work out” after say only 2 weeks will not be able to return to receiving benefits for 6 months! So what if the young person goes back to the employer and says, just pay me less than the legal wage in cash… you think Fair Work under Abbott will be policing this? I didn’t think so either.

  5. Iskandar

    Those old enough may remember the first post-Nov 11 1975 Fraser-Howard budget, of which this is a replay, down to the “short term pain for long term gain” slogan. Its objective was to bring back the 1950’s on the assumption that the Whitlam government was responsible for the economic crisis that engulfed the country. In reality it was external, the collapse of the post war boom which started in the US, from which Australia was temporarily insulated by tariffs and an artificially pegged high dollar. Fraser-Howard 1950’s policies in the late 1970’s were of course ineffective, and we lived through 7 horror years until the election of the Hawke-Keating government which brought 13 years of first-class governance. It’s impossible to know what external realities may arise this time round, but I hope the Senate rejects this 1950’s-style budget at every turn, brings on a DD election and flushes away this mob after seven months instead of seven years.

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