Terry McCrann: Greens’ $300b plan for economy is pure fantasy
The Greens are in dreamland if they reckon they can spend another $300 billion so they can give away free housing, tertiary education, childcare and all manner of things, writes Terry McCrann.
Terry McCrann
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Ah, the Greens. You don’t know whether to compliment them for resisting the opportunity to be utterly — what else in this time of the virus that flew out of Wuhan — bat-merde crazy? Or merely sigh at their everyday level of lunacy.
You see they are “only” demanding we spend $300 billion or so to get the economy moving.
That’s of course on top of the $230 billion or so that the current federal government is already spending to offset its own self-created worst recession in the economy in nearly 100 years.
This existing spending is already going to produce deficits of well over $100 billion in both the current 2019-20 fiscal year (ending June 30) and the 2020-21 year — and leave crippling deficits running into the (at least) tens of billions of dollars a year well into the 2020s.
The federal gross debt is going straight past $1 trillion and will keep going higher.
That, importantly and disturbingly, is just the federal deficit and debt. All the state Budgets are going to plunge into multibillion-dollar annual deficits and stay there.
Before all this, Victoria’s net state debt was headed for $55 billion by 2022-23. It’s now headed for $100 billion and billions higher. All the other states will be similar.
So, the Greens seeking to add “only” $300 billion to all that sea — correction, ocean — of red ink seems almost, well, anti-Green. Why not add $600 billion? Why not indeed $3 trillion? It’s all “free money” in the eyes of “Adam the fiscal Bandit” Greens leader.
Well, the first big point is that it would actually turn out to be “only $300 billion” in some alternative reality — which of course, true, is precisely where the Greens live and fantasise.
It’s not just that the Greens want to splash “free stuff” around here, there and everywhere: free tertiary education for everyone (under 30; that’s all but everyone), free childcare, free (500,000) houses, free this, free that.
Plus, the package also promises a guaranteed job for everyone and yet a permanent doubling of the dole. Why: nobody’d be on it?
The actual spend would turn out much, much higher.
Now, it is not just the Greens but even the supposedly (semi) rational politicians in the Labor and Coalition parties (to say nothing of the supposed “experts” in the public service) have never and still do not understand the first rule of government spending.
When you put on a “free lunch” — like any government program — people come out of the woodwork to scoff it down.
You’ve worked out that 100,000 people need a particular program; you will (always) find out that, say, 300,000 suddenly find means of accessing it.
So the $300 billion the Greens say they want to spend would turn out to be $600 billion anyway. That’s on a good day; on the actual bad day that such a Greens policy program would bring with it, it’d probably be $900 billion anyway.
Or, heck, what’s $100 billion between friends; let’s just say a cool round $1 trillion.
But that’s only one side of the Budget. The Greens also propose massive tax hikes for business and for individuals; dressed up of course as “taxing the rich”.
Good luck on that, if they can find any “rich” in the devastation otherwise known as the economy which will emerge on the other side of this mandated recession.
Further, they will wrap this all up in 100 per cent “renewable energy” by 2030.
At least that will keep us all (or most of us) fed, as it will shower us with free and pre-sliced pork.
There will be so many pigs flying, it won’t only be the birds that all those thousands of otherwise useless windmills would be slicing and dicing.
STATE SPENDING IS GOOD, BUT NOT THE BEST
Kevin Rudd and Wayne Swan had their school halls and pink batts; now Daniel Andrews and Tim Pallas have got their school portables and pink paint.
What is it about governments when they want to boost the economy, they always grab for the “tradies solution”?
Well, it does make sense — up to a point. It’s clearly the quickest and most sensible way to put people in work and do things that need to be done anyway.
Like the two big items in the state government’s $2.7 billion package: spending on schools, including what used to be called portables but are now designated as “relocatable buildings”, and refurbs of public housing.
We need both. If they are brought forward, good.
This makes the Andrews-Pallas exercise qualitatively different — and better — than the Rudd-Swan one, which was more a “good (actually, bad) idea at the time” one.
The “up to a point” turns on two things. First, we’ve got plenty of construction work already under way; indeed, arguably too much, given the huge blowout in the state debt that’s coming.
I don’t say this unkindly, but frankly the last people among the 20-25 per cent of Victorians who are really jobless right now who need to be favoured are tradies.
And I don’t think the answer is to retrain everyone else to join them, because “that’s where the taxpayer pump-primed work is”.
That’s got a taste of the Obama-era “advice” to laid-off workers that they should “learn to code”.
Further, just pouring more into construction is not building the “economy of the future” that we need.
We need the money spent on stuff that is going to build productivity and globally competitive jobs. Not, bluntly, more tradies.
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