Give us all a break, Australian Financial Review. The lineup today of short term Gillard bashing over the budget miss is as unhelpful as it is biased. Don’t get me wrong, the budget miss is a black mark, one that’s been obvious for two years to us at MB. But just pointing that out, over and over, is not useful media, it’s biased media, aimed at removing the Labor government rather than analysing why the nation is where it is and what solutions both political parties are offering to do about it at the election.
If you want to read it, here’s the list:
- First up is a good discussion of how the NDIS commitment should best be funded. Worth your time.
- Next is a quote from the Minerals Council that the MRRT:
“The mineral resources rent tax destroys value in the after-tax adjusted returns companies can expect; that’s what goes to the disincentive to invest. So anything that puts us at a disadvantage in terms of international competitiveness is what is the lead in our saddlebags and if that can’t be justified in efficiency dividends, environmental dividends, social dividends and economic dividends, then we’re really cutting off our nose to spite our face.”
Pretty amazing impacts for a tax that collects no revenue. Even so, having put the MRRT front and centre, next up the paper condemns Labor for failing to save any dividends from “soaring iron ore and coal prices”. Now I agree, but where was the paper and its editor when Labor was trying to install a resource rent tax on iron ore and coal that would have helped prepare for the end of the boom? Busy trashing the proposal.
- Fourth is a throwaway comment from Alan Mitchell that blames Gillard personally for the deficit because:
It was her government’s decisions that left the budget still in deficit at the peak of the biggest commodity price and mining investment boom in our history.
No economic context is offered. No reference to the terms of trade, structural adjustment, inflation, private sector deleveraging, fiscal multipliers, sectoral balances or the simple fact that had the government aimed for greater fiscal consolidation (which was already on a par with Europe’s PIIGS) then it would have chased its tail into a revenue destroying feedback loop:
- Fifth is loon pond hate mail from Jennifer Hewitt that has no place in a national paper.
- Sixth is a story given over to “business” (read lobby groups) fears that either cuts or raised taxes will hit growth. Damned if you do and damned if you don’t I guess.
- Last is Laura Tingle taking what was a seminal speech for the nation by the PM – declaring that the mining boom party is over – and twisting it into a political failure because it’s a free kick to the Opposition. What about the nation, Laura?
I’m not sure what’s going on over there at the paper but it pretty clear that Labor bashing is now the editorial hardstick. I’ve not heard that it’s direct interference in editorial but as Rupert Murdoch has shown that is rarely necessary. So long as the editorial point of view is made obvious, human nature takes care of the rest. Most of us are not Paddy Manning and would rather keep our jobs than run counter to the majority trend.
Meanwhile, both the nation and the business constituency that the paper purports to inform are none the wiser regarding what to expect going forward. Well, here it is, regardless of who is in power:
- more deficits
- more tax hikes and more spending cuts
- more pressure on the AAA rating
- weak aggregate demand
- a simple formula of the lower the deficit, the weaker the growth
- disleveraging despite lower interest rates
- a lower dollar
- an enduring and material risk of recession
Blame Labor if you like. Or, if you’re in the business of business and not politics, get on with adapting to it.
