shaky rudd’s $42 billion gamble

http://blogs.news.com.au/heraldsun/andrewbolt/index.php/heraldsun/comments/column_shaky_rudds_42_billion_gamble/

Andrew Bolt
Wednesday, February 04, 2009 at 06:03am


KEVIN Rudd hasn’t just bet $42 billion on a punt that he can kick the economy out of a slump.

The Prime Minister has also bet $42 billion of your money on his hunch that this time, at last, he understands what the hell is going on and how he can fix it. But his record shows that if he gets this one right, it will be a first.

I’m not an economist, and so you can ignore my fear that Rudd is spending billions that will sugar up the economy like red cordial, leaving us with huge debts and more of the overheated markets that got us into this strife.

But what you cannot ignore is that so far Rudd’s economic pronouncements have been largely wrong.

And the question must be asked: is this bloke to be trusted on one of the biggest spending sprees in our history - one that not only wipes out the $22 billion surplus his last Budget predicted, but leaves us $22 billion in a hole, with even worse to come?

Let’s check his record so far.

Just last May, Rudd said our real problem was inflation, and to kill it he had to give us a “tough-as-all-hell” Budget that cut spending and demand.

But less than a year later he’s handing out $42 billion over four years and pleading with us all to go spend.

Last November, Rudd assured us China would keep growing by up to 10 per cent a year, and its demand for our exports would stay strong, protecting our economy from real trouble. Now Rudd admits “the collapse in China’s growth in particular has produced a $115 billion fall in Australian tax receipts”, wrecking his Budget.

Last November, Rudd thought his $10.4 billion stimulus package would save the economy from sinking.

Now those giveaways have sunk with little trace, and the economy is tanking.

Last November, Rudd said that $10.4 billion would “help to create up to 75,000 additional jobs over the coming year”. Since then, we’ve lost jobs.

Also in November, Rudd unveiled another rescue: “Today the governments of Australia . . . have agreed on a $15.1 billion package to create 133,000 jobs to stimulate the economy.”

What jobs? Where have they gone?

In December came another $4.7 billion “nation-building program”, which Rudd claimed “will boost the level of GDP and help create up to 32,000 Australian jobs”. But those jobs are no more real than the rest, and Rudd now admits unemployment will rise to 7 per cent by next year.

Again and again, Rudd gives the impression he’s now making things up as he goes along. He’s even changing his mind on what he is and stands for.

Before the election, he boasted he was an “economic conservative”?

Now he writes an 8000-word article claiming he is in fact a “social democrat” and foe of “neo-liberalism” who wants a “new contract for the future” that makes “the role of the state . . . fundamental in the economy”.

MOST farcically, only nine months ago Rudd thought John Howard’s deregulatory policies were so good that he claimed Labor leaders Bob Hawke and Paul Keating thought of them first, deregulating the currency, airlines, banks and other industries.

“By comparison, the period since (Howard’s win in ‘96) has been relatively inactive in terms of fundamental economic reform.”

But now Rudd claims this economic approach was in fact such a disaster that Howard was responsible, after all: “(This crisis) is the culmination of a 30-year domination of economic policy by a free-market ideology that has been . . . called neo-liberalism . . . The political home of neo-liberalism in Australia is, of course, the Liberal Party.”

Some may admire that as clever politics, or typical main-chancing.

But I’ve worked on two Labor election campaigns, and studied Rudd eyeball to eyeball - and I’m scared.

I think he has no clue about what is happening and how to respond. All he has is a manic urge to control and to seem to “Do Something”.

Pray that this time his “something” works like nothing else he’s yet tried.