We have been hearing from the federal government for months now the mantra – “jobs and growth” but data from the September quarter shows GDP as being 0.5% lower – a contraction not growth. The fall was caused by reduce construction, weak business and government investment and weaker trade.
The contraction is the first in five years, the sharpest drop since the global financial crisis and only the fourth since the 1991 recession.
Federal treasurer Scott Morrison has blamed the opposition in part for the contraction but calling them out for no supporting the government’s planned business tax and spending cuts and saying that or three years the government has been trying to “unbake the cake” of payments and entitlements.
After over three years in power, the coalition is still blaming the opposition for its woes. It’s problems stem from its inability to lead and too many of them putting their snouts in the trough fne6v55. They complain about the Senate they have but they created the situation with their Senate electoral reforms (intended to wipe out the minor parties but the people thought otherwise) and a double dissolution election. You reap what you sow.
The government’s plan for the economy involves reducing taxes of businesses (many who don’t pay tax or hide profits offshore) in the hope they will spend, invest and create jobs but there are problems with that plan. Businesses aren’t going to spend while there is little business and consumer confidence, they will hold on to any savings until the economy picks up.
Part two of the plan involves cutting spending and attacking the welfare system. What the government fails to realise is that government spending, while interest rates are low is not such a bad thing if it keeps the economy kicking along. Given that our infrastructure is crumbling or horrendously out of date infrastructure funding could not only keep the economy going but also set us up for the future. Giving benefits and tax cuts to low income earners is also likely to boost the economy as these are the people more likely to spend, not lock their money away where it is of no benefit. We need people to get out and spend money – put money into the economy.
If Morrison can’t see this then maybe it’s time he steps aside for someone who knows what they are doing.
Image Credit: AAP Image/Alan Porritt.