Yesterday, Crikey questioned if a stimulus package could be effective in combating the economic effects of the coronavirus.
But we also noted the importance the government places on attacking Labor’s 2009 stimulus package, the one that essentially saved Australia from a GFC-inspired recession.
Today, and with the threat of a virus-led global slowdown on all our minds, we thought it worth recording what senior Liberals have said about the Rudd-Swan-Henry intervention.
Prime Minister Scott Morrison called Labor’s stimulus package “wasteful” with “ill-discipline” in an address to the Business Council of Australia last year (despite handing out cash to pensioners and low- and middle-income earners in the lead up to the election).
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“If Australians wanted to elect economic panic merchants, then they wouldn’t have voted Liberal,” he said.
In contrast, Morrison argued, the Coalition’s tax cuts were not a “desperate, one-off, short-term sugar hit or panicked crisis measure, here today, gone tomorrow”.
A month before Morrison’s speech, Treasurer Josh Frydenberg said the language Labor used around the GFC exposed the party as “panic merchants and economic neophytes”. He was responding to calls from Labor leader Anthony Albanese encouraging the Coalition to move quickly to develop an economic plan.
Frydenberg has also shied away from calling the Coalition’s tax cuts a “stimulus” — when asked in a pre-Budget interview with the Australian Financial Review last year if he meant to say stimulus instead of tax relief, Frydenberg responded, “that’s your word, I’m not using that word”.
Finance Minister Mathias Cormann has blamed high interest rates on the stimulus package, telling a journalist on Twitter: “You have obviously forgotten what happened to the cash rate post Labor’s reckless spending spree … or impact on exchange rate given very low cash rates and quantitative easing elsewhere after excessive Labor stimulus forced our rates up.”
He added the government would act to lift the economy, but wouldn’t waste a “crazy” amount of money, which he claimed Labor did following the GFC.
Liberal Senator Andrew Bragg similarly tweeted: “Labor overreacted & wasted billions of taxpayers’ money during the GFC … The budget position has taken six years to fix!”.
Senator Simon Birmingham, then-education minister, added his voice to the criticism in 2017 after 93 schools which had been given grants by Labor closed down.
“The legacy of school halls built for schools that are no more is a further reminder of the massive waste under the Rudd and Gillard governments, especially their BER program,” he said.
Malcolm Turnbull has attributed the success of the package not to Australia’s stimulus, but to China’s.
“I think what shepherded Australia through the GFC successfully was the Chinese stimulus and the large amount of cash that John Howard left in the bank,” he said in 2016. “And with the benefit of hindsight, there’s no doubt he spent far too much.”
Griffith University economics professor Tony Makin is not a politician but is a vocal opponent of the package nonetheless. He has written academic papers on the subject, and reviewed the stimulus for the Australian government via Treasury in 2016.
Makin attributes the success of the package to lower interest rates, exchange rate depreciation, foreign demand for mining exports and a then more-flexible labour market arguing there’s no evidence there was any benefit to the economy over the medium term.
When the report was released, Member for Lilley Wayne Swan — who was the treasurer during the stimulus package rollout — said the Liberal Party had “embarked on an ideological crusade” to demonise Labor. Some crusades never end.