A crisis of political competence in Canberra is spawning a crisis of economic confidence throughout Australia.
The latest Roy Morgan Monthly Consumer Confidence Report showed confidence in the Australian economy had declined sharply. And this month’s Westpac Melbourne Institute of Consumer Sentiment found “disappointing” and “soft” results.
Dunn & Bradstreet Business Failures and Start-ups Analysis for the December 2011 quarter recorded small business failures rising by 57 per cent among firms of six to 19 employees. The survey also found the number of small business start-ups fell a staggering 95 per cent by comparison to the previous year.
At the big end of town, the Australian Chamber of Commerce and Industry savaged the Gillard government’s 2012-13 budget, claiming it “would not increase business confidence or help companies in the economic slow lane”. The Financial Services Council joined the business criticism, predicting that Treasurer Wayne Swan’s policies would “significantly undermine confidence” in our economy.
The simple fact is Australia is governed by a motley mob of Keystone Kops who can’t competently manage a trade union, much less an entire country. Everywhere you look, Kevin Rudd and Julia Gillard have left in their wake a veritable trail of tears, bungles and blunders.
There’s the self-inflicted collapse in the Prime Minister’s personal credibility. People haven’t forgotten her solemn “no carbon tax” pledge given six days before the 2010 election.
And now they watch in disbelief as Gillard contorts herself into a political pretzel over the Craig Thomson affair. And all the while, the clouds of a new economic storm continue to gather on the horizon. We see Greece threatening to drag the rest of Europe over the brink. We observe America still grappling with massive deficit budgets that have driven its federal government debt to 100 per cent of GDP. And now there are indications the Chinese economy might be slowing.
We’re in for a very bumpy ride.
Yet in just over a month, Swan will dump Labor’s job-killing carbon tax upon the shoulders of families and business. And the government keeps digging us all into a growing black hole of debt by borrowing $100 million each and every day. It’s you and I – and our children – who’ll end up footing the bill.
The main reason why we’ve so far weathered the global economic storm relatively unscathed is because we entered it in such great shape. As the Howard government left office at the end of 2007, it bequeathed a federal budget in surplus and a cash nest egg of $45 billion to deal with future emergencies. And this meant we didn’t enter the GFC burdened by the same mountain of debt that has hobbled the economies of Europe and the US.
The most important benchmark of this government’s performance is how its policies have affected Australia’s ability to withstand the prospect of a second economic downturn. The real question is whether Swan’s tenure as treasurer has made Australia’s economy more or less robust.
The answer is clear, despite Swan’s campaign of obfuscation and obscuration. Rather than building up our budget defences in the face of future economic trouble, this government has left us treading water in a sea of red ink. And with this prime minister’s track record of doublespeak and double dealing, I’d like to sell the Harbour Bridge to anyone naive enough to believe her promises of a surplus. Australians are too smart for that. They see through the prime minister’s distractions and distortions. They can smell the rotting Labor brand.
If you’re an entrepreneur the antics of Gillard and Swan will make you keep your wallet in your pocket. In small business in the end it comes down to pure gut instinct. After all the numbers are crunched, all the calculations are complete, decisions about hiring and expansion come down to confidence in the business climate.
The only way to restore faith is through an election that will replace the current crop of Labor incompetents with the safe and secure hands of the Coalition.
Liberal Tony Smith is opposition spokesman on taxation reform