Wednesday, January 28, 2009
Special, Bolt's Column on Rudd's Failing Economy Rescue
(Click on the link to go to the original article .. the layout is better, and there are the other links there)
Rudd’s rescue is killing us
Kevin Rudd has so far spent almost our entire surplus on economic “rescue” plans, not one of which seems to have worked to stop the economy from slowing.
In fact, some have been disastrous or were bungled. The unlimited bank deposit guarantee caused a run on other financial institutions, which have had to freeze deposits. Much of the pre-Christmas $8 billion giveaway - meant to stimulate the economy - went on booze or gambling, especially on pokies, or was simply saved by the more prudent, despite Rudd’s pleas to spend it. Certainly some big retailers, such as Harvey Norman, said they saw little or nothing of Rudd’s cash in their tills, and called his package a “dud”.
Now we face massive new interventions in the economy, including wild plans for a ”Ruddbank” to offer Government loans to commercial developments (and thus bail out union-backed super funds) and even for the Government to keep paying workers forced to take unpaid leave by ailing firms.
It should be clear now that Rudd’s plans are simply grossly expensive ways to make him seem like he’s being “decisive’’ and “Doing Something”. That they are designed for headlines, not recovery.
But here’s the worst problem we now face. This economic slump is now expected to last between one and three years. Government revenues will fall during that period, just as the social security bill skyrockets. Is Rudd now squandering the cash we will need over the following hard years? Rather than splash out cash in short-term windfalls, that soon evaporate, should he not use that money instead to set up long-term incentives to invest and grow?
How about cutting taxes, especially payroll tax, just for a start? How about freeing up workplaces again, to help them compete? How about dropping the planned emissions trading scheme, which will tax businesses without doing a thing to stop a warming that seems to have stopped already? And how about cutting greentape of the kind that’s killing the Gunns pulp mill?
I now sense a growing concern about Rudd’s economic populism, and reckless - almost panicky - spending. Experts and journalists are now daring to speak out - albeit rather late.