Government budgets are often controversial. They involve decisions about a nation’s taxation and public spending priorities; and they have substantial implications for people’s well-being. However, it has been a long time since an Australian government’s budget was as controversial as the budget announced in May of this year by Joe Hockey, Treasurer in Abbott’s government. The first budget of the Howard government in 1996 was similarly harsh in some respects but, for generating sustained public protest as well as difficulty in getting parliamentary assent, this one takes the cake. It has been widely denounced as unfair and based on faulty economic reasoning.
63 professional Australian economists have weighed into the ongoing political debate by issuing a public statement. The organisation and publicity of the statement was coordinated by The Australian Institute. The statement can be seen on its website HERE.
Are 63 economic experts hard to ignore? Well, yes, given that the character of the budget is so obviously political, reflecting the current government’s agenda for changing Australia. The budget attempts to introduce to Australia a ‘politics of austerity’ that has become familiar in debt-laden European nations. It has all the hallmarks of a neoliberal agenda, blending rhetoric about the need to reverse irresponsible public spending with policies that shift the burden of adjustment onto vulnerable sections of society while seeking to increase opportunities for capital accumulation by the wealthy.
The oppositional statement by the 63 economists has a mild Keynesian economic character, emphasising that there is no ‘budget emergency’ in Australia. Relative to the post-Global Financial Crisis woes that bedevil many other countries, the Australian economic deficit and debt situations are of modest magnitude. The statement indicates that government expenditure cuts are likely to do more harm than good, both in terms of macroeconomic and social impacts. Prominent Australian post-Keynesian economist Geoff Harcourt has set out this sort of reasoning more fully in an article in The Conversation, available HERE.
The Australian Senate is still considering elements of the budget. Notwithstanding the determination of the Abbott-Hockey government to pass the budget in its entirety, it has been substantially unravelling in practice. Meanwhile, the macroeconomic situation is looking increasingly uncertain; and the government has worsened its own revenue position by pressing on with tax cuts (carbon tax, mining tax and company tax) while increasing expenditure by committing the country to go to war (again) in Iraq. Oh dear…
The names of the economists who have signed the public statement appear below:
|George||Argyrous||University of New South Wales|
|Tony||Aspromourgos||University of Sydney|
|Raul||Barreto||University of Adelaide|
|Mike||Beggs||University of Sydney|
|Dick||Bryan||University of Sydney|
|John||Buchanan||University of Sydney|
|Gavan||Butler||University of Sydney|
|Damien||Cahill||University of Sydney|
|Lynne||Chester||University of Sydney|
|Richard||Dennis||The Australia Institute|
|Alan||Duhs||University of Queensland|
|Peter E.||Earl||University of Queensland|
|Bradon||Ellem||University of Sydney|
|Craig||Emerson||Former Trade Minister|
|Geoffrey||Fishburn||University of New South Wales|
|Gigi||Foster||University of New South Wales|
|Bernie||Fraser||Former Treasury Secretary and RBA Governor|
|Roy||Green||University of Technology Sydney|
|Corrado||Di Guilmi||University of Technology Sydney|
|Tim||Harcourt||University of New South Wales|
|Neil||Hart||University of New South Wales|
|Gillian||Hewitson||University of Sydney|
|Elizabeth||Hill||University of Sydney|
|Evan||Jones||University of Sydney|
|Raja||Junankar||University of New South Wales|
|Peter||Kriesler||University of New South Wales|
|Rick||Kuhn||Australian National University|
|James R.||Levy||University of New South Wales|
|Bill||Lucarelli||University of Western Sydney|
|Sinchan||Mitra||University of Queensland|
|James||Morley||University of New South Wales|
|Alan||Morris||University of Technology Sydney|
|Adam||Morton||University of Sydney|
|Rod||O’Donnell||University of Technology Sydney|
|Joy||Paton||University of Sydney|
|Juan Carlos||Ponce||University of New South Wales|
|Suraj||Prasad||University of Sydney|
|John||Quiggin||University of Queensland|
|Patricia||Ranald||Australian Fair Trade and Investment Network|
|Goran||Roos||University of Adelaide|
|Susan K.||Schroeder||University of Sydney|
|Rhonda||Sharp||University of South Australia|
|Chris||Sheil||University of New South Wales|
|Julie||Smith||Australian National University|
|John||Spoehr||University of Adelaide|
|Jim||Stanford||University of Sydney (visiting)|
|Frank||Stilwell||University of Sydney|
|Tony||Stokes||Australian Catholic University|
|Tim||Thornton||La Trobe University|
|Phil||Toner||University of Sydney|
|Georgia||Van Toorn||University of New South Wales|
|Beth||Webster||University of Melbourne|
|Graham||White||University of Sydney|
|John||Wiseman||University of Melbourne|
|Sarah||Wright||Australian Catholic University|
Don Sutherland | Oct 11 1414
Thanks again Frank for this updat and brief rationale. That list of Australian economists is a broad church, methinks.
I have just read this: https://jackrasmus.com/2014/10/08/latin-americas-made-in-the-usa-2014-recession/
In it there is a discussion about fiscal stimulus (especially China’s) austerity in response to the 2007 recession ongoing in the context of the international context. Only one brief reference to Australia, which is interesting because of the Rudd government’s prompt although modest positive stimulus.
Financial crisis is going to happen again – it is in the nature of the system isn’t it? – and that’s why we need left political economists to raise this spectre here in Australia and, in so doing, (a) be somewhat more nuanced about the health of the Australian economy than such a broad alliance enables, and (b) explain why from our point of view, and (c) bring forward ideas about the best way to deal with it.
We need more combative left political economists than we currently have, out in the public (not necessarily MSM), and more of them.
It is possible that the crisis will return with some more details at around the next election or in the lead up to it. Potentially, a lot of unemployment, with all of the misery that will bring to those who least deserve it; but who will be the winners electorally, especially given that there is absolutely no sign that the ALP’s economics quartet – Shorten, Bowen, Wong and Leigh – have not broken from their neolaborist embrace of neoliberal financialised capitalism.
A more vigorius public analysis of the style in Jack Rasmus’ piece is really important for the multi movements that are in action against this government.