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Issue #1926      August 3, 2020



A confused economist

A couple of weeks ago, Treasurer Josh Frydenberg told ABC television’s Insiders program that “Thatcher and Reagan are figures of hate for the left because they were so successful.” For him, their success was marked by the fact that “One got two terms, which was the maximum that you can get in the United States. Margaret Thatcher got 11 and a half years,” the result of both former leaders “cut[ting] red tape and they cut taxes and delivered stronger economies.”

These remarks should make anyone with an ounce of moral fibre recoil in disgust. However, were these economics stronger? Thatcher’s UK was always bogged down with the highest rate of unemployment the country had seen in half a century, with income inequality reaching heights not seen in the previous decade. According to the Joseph Rowntree Foundation, “The proportions of households that were core poor and breadline poor declined during the 1970s, but then increased again during the 1980s.”

And now, in the driver’s seat of our economy, during a completely unprecedented economic and health crisis, is a man who thinks the kind of economic legacy Thatcher left behind was something to be admired, and even worse, to take inspiration from! These comments only leave us asking: What aspects of Thatcherism is Frydenberg going to take inspiration from? Will Thatcher’s education cuts, which resulted in the snatching of free milk from school kids, be a model to emulate? We already know what the our government thinks of university students (Guardian #1921, “Editorial: Arts and humanities suffer under new government plan”) so this wouldn’t be too far off the mark.

Perhaps even more confusing than suggesting Thatcher and Reagan are inspirations during this incredibly precarious time was Frydenberg’s comments about the kind of government the Morrison government intends on being during this pandemic: “We are not a government of austerity. We are a government that will support the economy at a time that they need it, but we will also be disciplined.” What he means by disciplined is anyone’s guess, but it is likely that all Frydenberg is attempting to do here is to speak out of both sides of his mouth.

Frydenberg is merely trying to conceal the seriousness of the economic situation Australia is facing. In this regard, Former Prime Minister Kevin Rudd has done a great job in highlighting the hypocrisy of the Coalition. When in opposition, it hounded the Rudd government for its spending during the Global Financial Crisis qualifying the debt accumulated as “unbearable,” ($48 bil) “crippling,” ($90 bil) “exorbitant,” ($153 bil) and “addicted” ($160 bil). But now, with a deficit of $677 bil, the debt is somehow “manageable,” a far-cry from its early proclamations of an economy that was going to be “back in the black.”

It is important to note that spending, when it is in the interests of the working-class, is not a bad thing. However, while the government has had to swallow some hard pills and subsidise wages in the form of JobKeeper, and support those made redundant with JobSeeker Coronavirus supplement, it nonetheless is attempting remove itself from any obligation it has to those suffering the most.

Just last week, the Guardian reported on the cuts to the JobSeeker coronavirus supplement that will see the program paying out only $815.70 per fortnight or $58 a day by October, putting those without jobs back behind the poverty-line. It also reported on the cuts to JobKeeper of $300 at the same time.

We must ensure that our government never follows through with the kinds of disastrous economic management of the Thatcher and Reagan years, and keep the present rate of JobKeeper and JobSeeker so that the working-class isn’t left in the cold.

Next article – Pandemic failures in aged care revealed in survey

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