Over the weekend, Opposition leader, Tony Abbott, gave a speech in which he promised:
…to return Australia to the “golden age” of the Howard government under his “incoming Coalition government”.
The tradition of the Howard government would live on, Mr Abbott declared, in no small part because of the similarities between his frontbench and Mr Howard’s ministerial team.
“Sixteen members of my frontbench were ministers in the Howard government,” Mr Abbott said.
“We won’t have to learn on the job because we have done the job before. There won’t be questions about the judgment of an incoming Coalition government because an incoming Coalition government has shown good judgment in the past and that’s where there is going to be such a contrast between an incoming Coalition government and the government that we currently have.”
…”That’s why the longer this government lasts, the better the Howard government looks and that’s why the Howard government now looks like it created a golden age of prosperity, which is lost.”
Today we got some details in another speech on how that might be achieved. From the Herald Sun:
“This was one of the disappointing features of the Howard government,” he told the forum hosted by Australian Industry Group in Canberra.
“We promised a 50 per cent reduction in red tape back in 1996 and, sadly, we didn’t deliver.”
He promised to deliver at least $1 billion a year in red tape reduction costs in the coalition’s first term.
Mr Abbott also outlined the coalition’s four point economic plan – lower taxes, lower spending, higher productivity and closer integration with Asia.
And from the AFR:
“That is the beginning of substantial reform, certainly substantial tax reduction under the first term of a coalition government,” he said.
“The wealth of our nation ultimately depends on the fact that we have been at least as productive as any, and more productive than most in the times past and if we are to continue to be a First World economy, as all of us believe we will and certainly as we all know we must, we have got to keep competing in that international race for productivity.”
Mr Abbott said Australians no longer felt wealthy – despite strong headline economic figures – because the current government had undermined confidence.
He singled out lagging GDP growth per head and rising household savings rates as indicators of a slowing, two-speed economy, adding that “even in the resources sector right now, there are the tremors of change with slowdowns in China, with falling prices for some of our principle commodities”.
Well, I’m not sure how we’re going to get closer to Asia, given Abbott’s recent Great Gaff of China and the seeming determination among Coalition partners, the Nats, to deter foreign investment. How else will be getting closer?
The promise on red tape is great and bring it on but that alone will only contribute something small to productivity. Lower taxes and spending is fine too so long as, as Delusional Economics argued this morning, that the private sector is prepared to resume borrowing. Remember, as a current account deficit economy we must, by definition, expand private sector borrowing to grow if the public sector is shrinking. That’s a big call given households remain heavily indebted, the world remains hostile to increasing national debt and the commodities boom is likely to be passed its peak before Abbott assumes office.
If the Coalition has nothing better to offer Australia’s macro settings than a return to the unsustainable Howard/Costello model then the next few years are going to very interesting indeed. And not in a good way.
