Daily Telegraph - Blog
Posted on Friday, 12 November 2010
Prime Minister Gillard is reportedly angry over the latest bank interest rate rise but people expect action rather than emotion from their government. Wayne Swan has been angry with the banks on more than 30 occasions over the past three years but that hasn’t stopped them from raising interest rates by more than the Reserve Bank. This almost never happened under John Howard and Peter Costello and is a sign that the current government isn’t taken seriously as an economic manager.
Seven interest rate rises in the past year have added more than $500 a month to the repayments on an average mortgage. Then there’s all the other pressure on people’s cost of living: since the December quarter of 2007, power prices are up 42 per cent, gas is up 29 per cent, water up 46 per cent, education costs up 17 per cent, health costs up 17 per cent and rent up 18 per cent.
Rising prices and pressure on people’s standard of living are not always the government’s fault but it’s the government’s duty to not to make a bad situation worse through mismanagement and high taxes. “Do no harm” should be the first rule of government. Unfortunately, the government’s spending spree is putting upwards pressure on interest rates and prices and the government’s wastefulness means upward pressure on taxes too.
A government that can’t tighten its own belt means that people have to tighten theirs. The Rudd/Gillard government inherited a $20 billion surplus and turned it into a $55 billion deficit last year and a projected $41 billion deficit this year, the two largest in Australia’s history. As this week’s economic outlook statement shows, Labor’s budget position has got worse as the economy has got better. This is a government that can never make a tough decision.
The basic problem is that the government doesn’t appear to stand for anything or to believe in anything. The carbon tax that was ruled out before the election but ruled in afterwards is just the most obvious example of a clear commitment that became negotiable as soon as the government was in trouble. It’s no way to run a country but that’s what we can expect from a government that’s, on John Faulkner’s admission, long on cunning but short on courage.
12 November 2010