How does the Coalition sell its budget cuts when our economy continues to grow

TREASURER Scott Morrison marked 25 years of economic growth in Australia. But why is this bad news for the Coalition?

Treasurer Scott Morrison celebrated 25 years of uninterrupted economic growth in Australia. Picture: AAP/Mick Tsikas

ANALYSIS

TREASURER Scott Morrison today celebrated one anniversary but missed another when he marked a quarter of a century of a recession-free economy.

“It’s official. Australia has now achieved 25 years of uninterrupted economic growth,” Mr Morrison told reporters.

It was a big occasion few other industrialised nations could boast of.

“Our economy is growing faster than every G7 economy, well over twice as fast as the United States and Canada and well above the OECD average,” Mr Morrison said in a statement.

Today also is the anniversary of the 2013 election victory of Tony Abbott over Kevin Rudd, returning the Coalition to power for the first time since 2007.

For three years, two prime ministers, two treasurers, three Budgets and slogans about “leaners and lifters”, the Coalition continues to struggle with the embedded belief the Australian economy will continue to muddle through.

It has not been able to bring voters along in its quest — laden with urgency — to cut spending and cover any extra costs with economic growth.

The political task has, in fact, damaged the economic one. Refer: 2014 Budget.

Voters know the deficit is dangerous if not repaired, and that global uncertainty threatens, but the conditioning of the past 25 years is that something will rescue us from calamity. A generation holds this belief with varying tenacity.

As Mr Morrison said: “But as always, it is never a time for complacency when it comes to growth, if we wish to see this growth continue.”

That is the premise of his appeal to voters and some of his own colleagues to accept the four-month-old Budget which is yet to be approved by Parliament.

It has some tough measures, including welfare reductions for pensioners and the unemployed which Labor has said it supported. Many voters consider this necessary discipline, but still are enchanted by an economy barrelling along.

Mr Morrison’s problem is the economy is doing so well. He today was speaking of the latest figures which showed the Australian economy grew by 3.3 per cent over the year.

How do you order people to row for their lives when the economy is being sped along by a breeze of significant growth?

The last Australian recession — the one Paul Keating said we had to have — ended when the June quarter figures were released in early September 1991.

That was the last period of consecutive quarters of shrinking gross domestic product. Those June quarter figures were later revised but there was no doubt there had been a recession.

The business of encouraging enterprise and investment at times cross other Coalition priorities.

Today, Mr Morrison downplayed the Chinese control of agricultural land and welcomed foreign investment on Australia’s terms, while Acting Prime Minister Barnaby Joyce was alarmed by the same official figures.

Mr Joyce pointed to the area covered by foreign owners being twice the size of Victoria: “So when people dismiss it as not much, that’s a substantial amount of land.”

Mr Morrison said: “With more than $3 trillion worth of foreign investment in Australia today, we cannot afford to risk our economic future by engaging in protectionism.’’