Malcolm Turnbull is a little more Scary Movie…

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.

... Malcolm Turnbull is a little less 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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7 comments

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    • watty says:

      12:20pm | 08/06/09

      Facts are more potent yet I can not see any reference by you to the fact that the mining industry not the handouts saved Rudd’s bacon.

      As for “scare campaigns” Turnbull is just a mere learner compared to Rudd,Wong and Brown and their “Global Warming ” alarmism.

      But that is permissable why?

    • Rowan M says:

      02:29pm | 08/06/09

      watty - it’s permissable because it is based in fact.

      and yes, it is very scary, which is why some people have been trying to raise the alarm for over fifteen years.

      doesn’t make it any less true

    • Anthony S says:

      05:40pm | 08/06/09

      Jason.
      Your assumption that the Liberals would borrow $275 Billion is simply wrong and your insistence on repeating that number undermines your argument. You’re simply regurgitating Rudd’s spin.

      Also a lot has changed since the1930’s for example we now have allot of automatic stabilisers built into our economy which but the budget into deficit into automatically when we hit a downturn. This reduces the need for huge extra spending packages of which make up 2/3rds of this years budget deficit. Rudd is just using the 1930’s and the Keynesian ideas to justify his big spending spree and to increase the government’s role in the economy. If Keynes theories didn’t fit in so neatly with the goals of the ALP I’m sure they would find some other person. Don’t forget the huge breaks-outs of inflation in the 1970’s that occurred as a result of deficiencies in Keynes theories.

      The Liberals are not criticising going into debt specifically it is the size of the debt and the poor way with which it is being spent. Only 20% of the cash handouts were spent which is clearly POOR economics. The Liberals alternative was ‘temporary superannuation guarantee relief’ for businesses which would have saved much more jobs meaning we *COULD* have had the same effects on the economy but with less debt at the end of it. Rudd’s stimulus packages were poorly planned and as a result wasted huge amounts of taxpayer’s money and left us with a debt that will leave Australia with a huge fiscal drag for decades to come. It’s not a scare campaign to remind people that we are heading for AUS$300,000,000,000 of debt - it is simply a fact.

    • watty says:

      03:09am | 09/06/09

      What is based on fact Rowan,

      Gore’s blatherings?Flannery’s predictions of ghost towns and no rainfall? Williams (ABC) 6 metre tides rushing down Pitt St?

      What is a fact is that some very smart snake oil salesmen are hoping to rake in $billions on the back ofs o called man made “Global Warming”.

      ps when NASA can’t get their story straight who do you rely on for info?

    • Rowan M says:

      12:47pm | 09/06/09

      i use a wide range of sources for information, not just one or two books.

      the general scientific consensus is that IF the average temperature rises by a couple of degrees the impact on biodiversity will be irreversible.

      Biodiversity, in case you’re in need of elucidation - is the food chain.  when that goes, nothing will be the same.

      in terms of whether this climate change is man-made or not?  it’s hardly the point.  we had 30 degree days in late April. global warming is happening.  look outside and tell me it isn’t?

      if we can do something to reverse the trend - and currently reducing carbon emissions (NOT trading them) is the only foreseeable impact we can make - it is my belief we should. 

      obviously you believe we should do nothing as it’s all a capitalist conspiracy.

      this is one time i’m happy to be wrong.  but unfortunately i’m right about most things, it’s the general result of honest research.

    • Ben Payne says:

      01:37pm | 09/06/09

      Watty – who, exactly, are the “snake oil salesmen” who would “rake in $billions” from global warming?  From what everyone seems to be saying, it is going to cost $billions to modify existing business processes and machinery to deal with the changes that are being suggested, but there does not appear to be any particular winners in this scenario. 

      I’m not sure about your NASA reference; perhaps you could provide a link to this information?  If you are referring to changing policies over time, then yes, this is completely normal – it is called scientific method.  A theory is put forward, that its proponents feel not only fits in with current empirical evidence, but can be used to predict future events, and meet changing evidence.  If a current theory does not fit new data, then it is discarded in favour of one that better describes the evidence.  The current theory, which best meets this criteria, says that global warming is a fact, and that unless we do something about it sooner rather than later, the human species will likely die out.  I, for one, am against this.

      Anthony – I really don’t give a crap how much the Liberals would ‘borrow’.  Luckily, they are not in power at the moment, and the point is moot.  The very idea of raising cigarette tax (which is essentially a tax on the lowest income earners), combined with a raping of the superannuation guarantee (once again, aimed at the lowest income earners, who cannot afford to pay into their own superannuation, and would then have to rely on welfare payments, thereby increasing future government spending – duh!) shows just how ignorant Mr Turnbull’s ideas are.

      I don’t know where you get the “only 20% of cash handouts spent” – I have to admit, I didn’t take the $900 cheque down to the local Myers and sign it over to them, but I paid it into my credit card, thereby reducing the interest I need to pay, but also allowing me to spend it when and where I want to spend it.  By reducing my credit card interest, I am also freeing up the cash that I would have had to pay to the bank, allowing additional spending, and further helping the economy.  It was the injection of cash into the marketplace, regardless of where it went, that has made all the difference.

    • Marianna says:

      11:04pm | 28/08/09

      Watching Jason on Lateline right now - cannot believe that I find a politician… really HOT!!

 

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