There was an article in The Sydney Morning Herald and The Age today with the heading, “Govt to tackle head on claims it is unfair and say borrowing against our kids is the most unfair act of all”, by Latika Bourke.
Whoever came up with that headline needs fatigue counselling, but
putting that to one side, it is the content that, if accurate, displays
an incompetence within the ranks of government thinking, which is simply
For a start, “borrowing” against our kids is what successive
Australian governments have been doing for 100 years. It has made us
what we are today. How is that unfair? We allow them to attend the
schools and universities that were built. We allow them to use our
hospitals. We let them travel on our trains, buses and trams, all of
which were built for us as well as provide a future that would prepare
them to become productive members of society. How is that unfair?
Does Mathias Cormann think that his generation paid for all of today’s infrastructure? When he says, “No
parent would keep putting a chunk of their grocery bill on to their
credit card every week through their whole life and ask their kids to
pay it off after they go,” what does he think he has been doing most of his adult life?
Of course we ask our kids to pay some of it off, but not until the
little Focker’s have left home, got an education and a job and taken
over from us as we start to retire. What sort of fantasy land does our
finance minister live in?
Does he not realise that he is paying now for things his parents
helped provide for him? Does he think it all came off their credit card?
That is how government works. We build stuff, we create stuff that we
expect will last a couple of generations before it needs to be updated
or replaced. When it does, that generation replaces it and successive
generations thereafter help pay it off.
A handful of examples spring to mind: the Snowy Mountains
Hydroelectric Authority, the Sydney Harbour Bridge, the Melbourne
Underground Rail Loop, the Australian Submarine Corporation, the
Commonwealth Bank, the Ord River Project, the Melbourne/Sydney/Brisbane
Rail line and so on. Does the minister think these projects were all
paid for by the generation who built them? No, minister, You and I are doing that now!
And just to labour the point, his and my little Focker’s will be
sharing that load too. Has he forgotten that he was once a little
There is a name for all of this. It is called deficit spending. Since Federation in 1901, 112 years ago, 82 of those years involved deficit budgets.
There have been 18 surplus budgets over that period, 10 of them came
during the Howard/Costello years, a period where private sector debt
soared to record levels. They were the most unproductive years since
federation. There have been just 12 balanced budgets.
If anything demonstrates the failure of sustained budget surpluses,
surely that does. Successive generations have always paid off deficit
budgets. Budget surpluses make no contribution to major infrastructure
projects whatsoever. They do the opposite. They starve the country of
money to build infrastructure. Name one major project the Howard
government dreamt up and built that we are not paying off today. Did
they build anything?
the article, the main thrust seems to be the minister’s concern for
rising unemployment; and well it should be. It is his government’s
policies that are forcing unemployment up. The article also claims that
former Howard government minister, Peter Reith said unfair industrial
relations laws were stopping young people from getting jobs and he
criticised Prime Minister Tony Abbott for not doing anything to solve
Far be it for me to criticise anyone who criticises Tony Abbott, but
the former minister is quite wrong. It is not our industrial relations
laws that are preventing people from getting jobs but a failure of
government to provide stimulus spending that would generate demand.
Demand is what creates jobs, not laws.
Little wonder a former minister of the Howard government would think
that way. He had lots of friends, who today, have no idea of how little
they did for the nation.