Punch: Malcolm Turnbull is not that scary
I suspect there was a garbage bin full of “Rudd Recession” posters and TV Ads in Malcolm Turnbull’s office last week. Crosby Texter must have been furious. They were gearing up for the mother of all scare campaigns. Instead they are left with a second rate scare campaign on debt.
This is how it goes … 18 months ago there was no debt. Now debt is out of control. It’s $300 billion! Be afraid! Blame Labor! Of course 18 months ago there was no global recession. But don’t expect Malcolm to tell you that. Or how much he would spend. That would destroy the scare campaign.
Why? Because Malcolm would borrow almost exactly the same amount - $275 billion. That’s what makes this scare campaign more like Scary Movie than Wolf Creek.
What would Malcolm do?
If Malcolm really thinks debt is too high he certainly doesn’t have a plan to fix it.Remember the budget reply? A nationwide audience eagerly tuning in to hear what he would do if he was in charge. All we got was a tax on cigarettes. No plan to reduce debt. No plan to pay it off quicker.
Now come on. If you are going to try to scare everyone senseless about debt, the least you can do is have a plan to slash it.
There is no plan because he knows he would borrow $275 billion.
Why would both sides borrow?
The short answer is to protect jobs.
The global recession has reduced the amount of money the government will collect in taxes by about $210 billion. That’s the real reason why the budget is in deficit - and Malcolm knows it. He just won’t tell you.
When this sort thing happens governments have two options – they can slash spending and increase taxes to keep the budget in surplus or they have to borrow. History is a guide to what to do here. The Great Depression happened because countries didn’t do the sort of things the Government is doing now.
The global recession is already ripping jobs off people around the country. Unemployment is forecast to hit 8.5 percent. If the government didn’t borrow it would be a lot higher.
Have a look at Budget Paper 1. It explains in a few short words what would happen if the government sat back and did nothing – up to 210,000 more people would lose their job. That’s about two Olympic Stadiums full of people without a job. Now that’s scary.
Those 210,000 jobs are important, not just to the people who currently have them, but to all of us. They possess the skills and the experience we need to come out the other side of the global recession stronger and more competitive than before. If they lose their job and the skills that go with it we all suffer. That’s why governments have to borrow – to protect jobs and protect the economy.
Malcolm was right.
Malcolm was right when he said the top priority of government should be jobs, jobs, jobs. It should be. And it is. That’s why the government is building classrooms, roads, ports and railways around the country. That’s why 35,000 construction projects will ramp up over the next 12 months. To keep people working and make the economy stronger and more productive when the global recession ends.
This isn’t going to be easy. We are fighting an uphill battle. But it is the responsible thing to do, and Malcolm knows it.
Laurie Oakes is right.
Laurie Oakes nailed the absurdity of this scare campaign last week when he pulled out the New Zealand budget. Remember this is a conservative government - the Liberal Party across the Tasman.
It says “it is prudent to allow an increase in net debt in response to the current economic shock.” Their net debt will peak at 36 percent of GDP. Ours will peak at less than half that - 13.8 percent.
The comparison is even more stark when you look at debt levels around the rest of the world. Net debt in the UK is expected to peak at 83 percent, in the US at 83.6 percent and in Japan at 136.3 percent. Puts things in perspective doesn’t it.
Scare campaigns are all about trying to create fear. Fear is powerful. But facts are even more potent.
Scott and I are good mates. We agree about a lot of things – including debt. Our plans are almost exactly the same. The only difference is I admit it.
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