The political no-holds-barred clashes Australia is used to, are now being blamed for adding to our economic jitters.
This has raised the critical question of whether pulling apart the economic record of a government could damage the economic performance of the entire nation.
“I remain very confident about Australia’s medium term economic prospects,” shadow treasurer Joe Hockey said yesterday, using words Treasurer Wayne Swan would endorse.
“We are in the right place at the right time, geographically located near Asia, the world’s largest and fastest growing economic region, and blessed with the resources and the rural output that they want.”
But then he said of the Government: “They claim the Coalition is talking down the economy through its attacks on the Government’s own policies, such as an economy-wide carbon tax which will increase the price of everything.
“The truth is that the Government’s own actions, its own policies and its lack of a mandate have destroyed consumer and business confidence.”
Wayne Swan spoke of confidence, too, and clearly had the Opposition in mind when he addressed Parliament.
He echoed, in part, Mr Hockey: “We can be confident in our economic fundamentals, confident in our linkages to the strongest part of the world, confident in the resilience of our people and confident that we have a Government who has passed the test before.”
He further said: “And in uncertain times like these, it more important than ever that we have a mature debate about our economy and where it’s heading, rather than damaging rhetoric that risks undermining confidence further and sells our country’s prospects short.”
There is no doubt the Government has a tough task to deliver what it has promised on the economy, but the Opposition has its own battle to guarantee economic credibility.
They both look cool and confident but be assured that the brows of Wayne Swan and Joe Hockey are liable to be drenched in sweat at the drop of a DowJones Average.
One man is guiding the national economy towards putting the Budget in the black at a time when Government revenue is decreasing. The other has to find $50-70 billion in savings at a time when cutting spending could wreck an economy under global strain.
Here are a few measures of their tasks.
Mr Hockey has to find savings of up to $70 billion over fours years if the Coalition is to have a credible economic policy. Here’s a rough guide to the dimensions of his task.
Hypothetically, if all Commonwealth public servants were immediate sacked - and Mr Hockey doesn’t want to get rid of ALL of them - he would save $60 billion and still have to find $10 billion.
Mr Swan has to keep the national economy rolling towards a surplus at a time when many voters believe their household finances will be wrecked by a carbon pollution penalty, and while consumers have gone on strike and are keeping the dough under the bed or paying off debts.
He is maintaining a course towards a return to a Budget surplus by 2013 despite alarming projections that Europe and the United States will not be contributing to global economic growth - or Australian revenue increases - for several years.
He counters the distress of those two economic blocs by highlighting the turbo-charged growth in China and India, and the Asia-Pacific middle class which is expanding at a rate of 110 million cashed-up consumers a year.
“I don’t want to sugar coat the current situation. If the global economy were to weaken materially, that would obviously have an impact here,” Mr Swan told Parliament.
His difficulty is that he doesn’t have spare cash to keep the economy ticking over so it survives a global crisis, without going into the red again.
The Government is hoping Australia will be robust enough to withstand the impact Mr Swan referred to with the only special measures needed being cuts to interest rates by the Reserve Bank.
If things get worse than projected and a deficit is needed to counter a GFC II, it would be portrayed as a broken promise and become a major political problem.
The Opposition is already telling voters there will not be a surplus on schedule. In Parliament yesterday Opposition Leader Tony Abbott and Joe Hockey rammed home the point that Prime Minister Julia Gillard can not be trusted.
As part of that finely-tuned political calibration, the Opposition will have to keep an eye on the point when its political agitation slips over to a campaign of talking down the economy.
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