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.
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…. You’re assuming this government has either shame or a conscience?
Ethics and morality – isn’t in question – we know about their lack.
No brains, no shame, no sense, frauds, fakes, fools, that is the conservative skull, the planning vacuum. And they are voted in by empty desperates who think that their natural lords will somehow do well for them. A treasurer who is an economics idiot, a P M, the Head Moron, a trained and practising liar from advertising, and of no decent record, or achievement, plus the ignorant country party types who’ve always done it their way, giving us blights, crimes, failures, pests, pestilences, poxes, foxes, rabbits, prickly pear, erosion, denudation, gullying, carp, illegal land clearing, water abuse and theft, deforestation and everything stupid to ruin a once lovely, delicate, now abused land. They should be up against a wall, not poncing about in Canberra, serving the foreign corporate crims and crooks and crawlers who aid in our reduced state.
Wow. You hit the nail on the head. We do not need these people. They will kill this beautiful country and us if we don’t eradicate them. They are a pestilence.
They’d eat a bat before they’d go a crow.
Still they only have culture wars to fight, nothing substantive.
They don’t understand that these measures were once off stimulus, more like an electric shock to the heart than a sugar hit, and the cost was once off and had no longer term fiscal bearing.
Tax cuts however have little short term benefit but have huge and ONGOING costs. Like Peter Costello leaving a structural deficit after 6 years of gorging on Chinese takeaway, tax cuts just lead to nowhere.
Coalition’s tax cuts were not a “desperate, one-off, short-term sugar hit”.
No they were not. They weren’t any stimulus at all, but they did cost a lot of money.
Makin? A Report from this or that person that just happens to perfectly suit the Coalition’s political and ideological agenda. As with climate change denial, an academic can always be found to endorse the ideological line. Economists are useless for any other purpose.
Makin made essentially these points on behalf of the Minerals Council of Australia in a Sept ’14 Report that was “A PUBLIC POLICY ANALYSIS PRODUCED FOR THE MINERALS COUNCIL OF AUSTRALIA”. At least here we are spared the 90 pages.
It was rebutted by Treasury in a note at that time: see
http://www.treasury.gov.au/PublicationsAndMedia/Newsroom/Articles/2014/Response-to-Minerals-Council-of-Australia-Monograph
Obviously Secretary for the Treasury Fraser (an abbott appointee) saw mileage in promoting someone whose strong and partisan views on the subject were already well-known. Fraser said demands on Treasury resources had increased “dramatically in recent decades” and, in response, had increased its outsourcing of research, with future papers to examine immigration, taxation, the social welfare system and reasons for low interest rates.
We can expect further dismal exercises, always aiming to suppress any benefit to ordinary people.
Is this the article you meant to link to?
https://treasury.gov.au/article/response-to-professor-tony-makins-minerals-council-of-australia-monograph-australias-competitiveness-reversing-the-slide
The link you posted is no longer valid.