Friday, March 1, 2013

The age of austerity is over?

The Queensland Government has at least released the executive summary of the Costello audit report. Privatisation will be top of media reports and discussions so I will leave that for others!

Queensland Economy Watch supports the privatisation proposals: Govt should embrace privatisation. While Macrobusiness is more cynical: Costello propaganda supports privatisation. Possum Comitatus has been shouting 'foul' on twitter over wages data among other aspects.  No doubt we can expect an imminent contribution from Prof John Quiggin. 

An interesting aspect since the interim report is that discussion of any revenue measures has been disregarded. In fact there is a reference that any revenue measures will have to come from the Feds but should not be expected! Meanwhile, simplicity reigns when it comes to debt analysis:

This reduction in debt cannot be done by adjustments to the State operating
statement. To illustrate, if the Government were to achieve a consistent fiscal
surplus of 1% of revenue year after year, it would take 50 years to reduce debt by
$25 billion (ignoring growth in the base and inflation impacts for simplicity).

The Courier-Mail reported this without reference that growth and inflation over 50 years is ignored! Hang on! Wasn't it the Howard Govt, including Costello, who started a financial literacy education program? Apparently it wasn't effective! Debt /GSP which included these appropriate parameters after 50 years for this calculation would be?

That aint simplicity but rather duplicity! Sadly we have no one of Paul Krugman's standing to offer an alternative perspective: Nobody understands debt.

Meanwhile over in old blighty where the Tories have similar advice and polling links as the LNP and are 10 points behind Labour (at least they know how to spell it) in polls after 2 years of the same agenda, Anatole Kaletsky suggests The age of austerity is ending:

With an election just two budgets away and a radical new governor arriving at the Bank of England amid intense public expectations, a shift of policy away from austerity always seemed likely in the second half of 2013. Until last week, however, a major deterrent to policy U-turns was the fear of losing Britain's triple-A credit rating.
With that totem now demolished, Cameron has less reason than ever to persist with policies that are not only politically suicidal but economically counterproductive - and are coming to be recognised as such in Europe, as well as in America, Japan, China and indeed the world over.
Things may now look that way just yet, but the age of fiscal austerity should soon be over.

Apparently so far some one forgot to tell Australia? Roll on the Great Unhinging!


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