Pearls and Irritations

The Coalition, supported by our corporate media and billionaires like Gina Rinehart and Clive Palmer, claims that it is the superior manager. This claim has become part of the public mindset. But the evidence shows that the Coalition is a very poor manager. Its priority is not to resolve problems or manage them well, but to play a political game to win votes.  

Look at some major Coalition’s management debacles.

Economic management

 The Coalition is determinedly rejecting any suggestion of a fiscal stimulus to stimulate our stagnant economy. Why? The Coalition wants to reiterate it’s claim that after all the Labor failures in getting the budget back into surplus that it is able to achieve it. For the Coalition a ‘budget surplus’ is a political slogan, not a serious policy intent.

The Coalition confuses the budget with the economy. The budget, whether in surplus or deficit, is a means to an end. The important end is the state of the economy. But even if the Coalition is successful in achieving a momentary budget surplus, it will be achieved mainly through bracket creep and the good fortune of record government revenues as a result of a mining catastrophe of a competitor in Brazil.

The real reason for continuing deficits over so many years is due to the ‘fiscal profligacy’ of the Howard/Costello years. Both the Parliamentary Budget Office and the IMF pointed to the way that the Howard/Costello governments locked in a whole range of government concessions in negative gearing, generous treatment of capital gains, tax-free superannuation benefits, family trust concessions and franking credit rebates. These concessions are costing the Budget about $50 billion per annum. That’s the real reason for continuing budget deficits.

In any event the Coalition faces a $20b write down through its mismanagement of the NBN That will blow a massive hole in the Coalition’s surplus ambitions.

By any account, including economic growth rates, the Coalition has been a poor economic manager. Only two Australian Treasurers have received the coveted Euromoney Finance Minister of the Year award, Paul Keating and Wayne Swan. That is hard to remember if you read only the Australian media. But we hear a lot about pink batts. Another Coalition/media beat up.

Politics has invariably been the priority of the Coalition rather than good economic policy and management.

Drought 

As John Kerin in Pearls & Irritations has pointed out, we don’t have a national drought policy between the Commonwealth and the States. Tony Abbott and Barnaby Joyce decided in 2013 to wreck what policy we did have. Instead of a drought policy, we have a media campaign by our marketing Prime Minister so that he can be seen hugging farmers’ wives, sifting dry sand through his fingers, with of course a daggy cap. It is not only ‘all hat and no cattle’, there is no drought policy as well.

Barnaby Joyce spent $675,000 as the Morrison Regime’s Drought Envoy but didn’t produce a report.

Politics and ad hoc band aid hand outs have filled the vacuum in the absence of any real drought policy. How can the government be taken seriously on droughts when its senior members reject the science on climate change.

Is that good management?

Climate Change 

This is the most serious national and international issue which our planet faces. The Coalition has refused and been deliberately destructive in attempts to ameliorate the worsening climate. The Rudd and Gillard governments made two major attempts to reduce carbon pollution – the Carbon Pollution Reduction Scheme and the Carbon Tax. Both were strenuously opposed by the Coalition. Political advantage was all that mattered rather than attempting or supporting sensible ways through a market mechanism to manage the risks of climate change. As a result we now have no serious policies in place to curb emissions. The Coalition wants to see not only more coal fired power generation in Australia but more coal exports.

The development of renewable energy, particularly solar and wind, is occurring despite the Coalition. For political advantage, the Coalition, with the cooperation of the Murdoch media, espouses the interests of a fossil fuel industry.

The Coalition has failed quite wilfully and deliberately in helping or acting to limit carbon emissions.

Energy 

Climate and energy policy must be closely allied. This has not happened particularly with the disaster prone Angus Taylor.

Malcolm Turnbull’s desperate attempt with the National Energy Guarantee failed. We are exposed to power blackouts in summer. Our ageing fuel-based generators are coming to the end of their life but there is no coherent plan to promote renewable energy backed by storage, batteries, and transmission facilities. It is a mess.

We have seen a trebling in the price of gas on our East coast over the last ten years. This has happened as our LNG exports have sky-rocketed over the last two decades. We export more gas than any other nation. But through policy failure, we now have to import gas to curb soaring prices. Many of our manufacturing plants are at risk.

Numerous other countries have managed their gas supplies to support local industry and households as well as export. We have failed dismally to do so in this country.

We have no energy plan.

Water Policy 

Through mismanagement and the power of corporate agri businesses the Murray Darling Plan to protect our river basins has failed with. The Basin is in crisis. The rot really set in when Malcolm Turnbull appointed Barnaby Joyce as minister responsible for water and irrigation. The result is widespread fish-kills and the desperate plight of many country towns and small irrigators in south-eastern Australia.

The Coalition tells us that dams have not been built when in fact 20/30 dams have been built for private agri businesses- not for small irrigators and local townspeople.

This mis management warrants an urgent Royal Commission with Barnaby Joyce the first witness.

NBN 

The NBN should be the platform for our modern technological economy. But the Coalition has produced a dud NBN. In over 200 years of our history we have never wasted so much money on such a failed infrastructure program. The Coalition is responsible in two particular ways for the failed management of this project. The first is that John Howard sold off all of Telstra for reasons of ideological dogma. His government should at least have kept the wholesale business – wires and switches – in public hands. We could have then proceeded years ago, as New Zealand did, to roll out a fibre-based infrastructure. Instead the Rudd government had to create a new vehicle to roll out modern broad band services. The second management mistake was that the Coalition was determined to wreck the NBN. Tony Abbott told Malcolm Turnbull to ‘destroy the NBN’. That is just what has occurred – and continues to occur.

The dud NBN will have to be fixed at a cost of tens of billions of dollars.

Who said that the Coalition is a good economic manager?

Infrastructure

The Coalition tells us that there are numerous projects ready to roll out. But have they been independently assessed by experts?  We have wasted and are continuing to waste billions of dollars in road infrastructure. The Coalition is seduced by the greed of the motor and construction sectors. Projects are not properly assessed in advance to determine costs and benefits. There is seldom any examination after completion of projects to ascertain whether value for money has been achieved.

Pressure by lobbyists on behalf of vested interests promotes many dubious infrastructure projects. The most sensible way to curb urban congestion is a suitable and well-constructed congestion tax rather than wasting billions of dollars on more and more roads. The enormous spending on roads shifts bottle-necks and encourages more people to use already congested motor ways and parking facilities.

Recently the CEO of Infrastructure Australia was asked ‘How do you deal with the question of your independence?’. Without seeming to take the issue seriously, she responded ‘Well, it’s the classic choice between being independent and being influential’. Those few words tell us a lot about our widespread infrastructure waste. The ‘infrastructure club’ which includes Infrastructure Australia has clearly decided that it’s better to play the political game than address the hard questions of value for money. Unless we have rigorous and independent evaluation of prospective infrastructure projects, we will continue to waste billions of tax-payers’ money. That is what we are doing. Perhaps Ministers, officials and vested interests think it is all paid for with Monopoly Money!

Our welfare programs are more rigorously managed than infrastructure in Australia.

Who said that the Coalition are good managers when the rewards to political friends so often push aside the public interest and value for money?

Cars and submarines 

The Coalition deliberately chose to close down our car manufacturing industry based principally in South Australia and Victoria. With an effective rate of protection of 8% our car manufacturing industry employed 200,000 people.

In careless business management, the Coalition decided to spend over $50 billion with long delivery delays of French submarines. With an effective rate of protection of 300% for the French submarine build, South Australia will now secure only 2,000 new jobs. Overwhelmingly the skilled technical jobs will be in France and not in Adelaide. Compare all that with the 200,000 we have lost through Coalition mismanagement.

The political rationale for this imbroglio was to assist Christopher Pyne hold his marginal seat of Sturt in Adelaide.

Does this sound like good economic management? We would have been much wiser to retain our car manufacturing industry and buy submarines off the shelf from Japan or Germany.

Coalition Management Failure

In it’s mismanagement of major issues, the Coalition has served Australia badly. To cover its failure and the lack of sound policies in almost all the above areas, the Coalition diverts attention by attacking the Labor Party and the Unions. The CFMMEU is a more convenient target for the Coalition and the obsequious media than the greedy and incompetent bankers that have bought so much ruin to people in Australia

What should be at the top of our public agenda is ways to address the major failures of public policy and management described above. Unfortunately our corporate media lives by access to sources rather than the time honoured practice of critical examination of facts.

With the cooperation of our corporate media, the Coalition focuses its attention on the Labor Party to avoid any serious discussion of its major failures in economic and business management.

As Ian McAuley puts it ‘ why do we trust our economy to this mob?’

See

IAN McAULEY.  Reclaiming the ideas of economics. 19.9.2019

IAN McAULEY.  Reclaiming the ideas of economics: Taxes  24.10.2019

Share and Enjoy !

SHARE TWEET SHARE COPY EMAIL PRINT