Confident that the Prime Minister can steer us out of the financial crisis? Don’t be. Every policy announcement, every job-creation program, every plan to fix the economy point to one thing: The Government’s just makin’ it up.
Want proof? The team at the Department of the Prime Minister and Cabinet have developed www.economicstimulusplan.gov.au to tout all the ways they’re fighting the downturn. And the first, most prominent, measure listed on the website is a subsidy to home insulation.
Call me cynical, but it seems very unlikely that historians will describe the recovery from the financial crisis as “insulation driven”.
Sure, they say the victors write the history books. But unless Moorabbin Coat-O-Foam Discount Insulation opens a publishing arm, there’s a fair chance Pink Batts won’t ever get the place in the history of the Australian economy that Kevin Rudd appears to think it deserves.
If there is one overarching theme in this crisis, it is that nobody really knows what they are doing.
When the Government announced the commercial property bail-out in January, it claimed the measure would save 50,000 jobs. In the Senate inquiry that followed, Treasury officials admitted they really didn’t have any idea how many jobs their measure would create – they just extrapolated job losses from a previous downturn and wished upon a star.
And the multibillion dollar stimulus package announced in February? The Secretary of the Treasury, Ken Henry, admitted to another Senate inquiry that the Government had no idea whether the package would help the economy at all.
All these exciting announcements, but the only thing anybody knows for certain is how much they will damage the federal budget.
It’s like going to a magic show where a magician keeps making bunches of roses disappear. The show is entertaining and uplifting, until you leave – and discover a sad, discarded pile of battered roses on the floor by the exit. There was no magic. You just spent your evening watching a goateed guy destroy flowers.
Sure, it seems fun watching the Government conjure up jobs and prosperity out of nowhere, but in retrospect, after none of those jobs appear, the economy keeps going down the toilet, and bureaucrats have eventually admitted they made it all up – it’s actually quite depressing.
Another unlikely measure to drag us out of the global financial crisis is the $150million Boom Gates for Rail Crossings Program that Infastructure Minister Anthony Albanese believes will “support local jobs and local businesses during the current global recession”.
Hey, we’re all for boom gates. But claiming that they can help stave off recession seems a bit of a stretch. Same goes for solar hot water rebates, repairing the gutters on school portables, or refurbishing playgrounds.
And isn’t it a little dubious that the best way to fix the crisis just happens to be $900 delivered straight into the bank accounts of almost every Australian voter? Wouldn’t you be more convinced the Government was trying its hardest if they thought they had to do something that the electorate absolutely hated?
I’d have a lot more faith in Rudd’s healing powers if he believed he had to raise taxes massively on working families or sympathetic pensioners to save the economy – you know, something that really hurt his poll numbers. If he announced he needed to slaughter one cute puppy every day until toxic debt was completely eliminated, he’d be cuckoo, but at least you’d know he was trying.
Last week there was another example of how the Government is trying to save the economy by giving away stuff – the latest iteration of the National Broadband Network, which, by all accounts, was developed on the back of a napkin after six or seven beers.
For a paltry $43billion, we are told that the new broadband network will directly “support” 37,000 jobs. If I have entered enough zeroes into my calculator, that’s a cost of over $1 million per job.
Whatever. Jobs are jobs, dude. It’d be a bargain at twice the price.
But it must take a lot of hubris to follow your failure to get an $8billion broadband plan off the ground with a $43billion plan, and still pretend you are in control.
When we get out of this crisis, it won’t be because the Government has come up with a policy that works, it will be more likely because the economy just can’t bear to be miserable any longer.
Market traders will discover pretty much every stock in the world is hugely undervalued, and blue chips are a better investment than canned soup, shotguns and pre-fabricated bomb shelters.
While we wait, it’s hard not to conclude that the Government is just tossing a random collection of expensive policies at the wall and praying for one eventually to stick.