The “adults in charge”: some myths about our economy

Joe Hockey

  • There is a budget emergency.
  • A deficit equals a bad economy.
  • A surplus equals a good economy.

These are all myths. False slogans spread by the Liberal government, unscrutinised by a sympathetic media and swallowed whole by a vast majority of the population. Calling a “crisis” is how Abbott justifies cuts to the poor and disenfranchised. The truth is:

  • There is NO budget emergency.

Australia’s spending is low by OECD standards. And our economy is relatively healthy, especially when compared to our friends in the US.

  • A deficit DOES NOT equal a bad economy.

Being in debt is often not a bad thing. People regularly go into debt to invest in their future. Mortgaging a house is a good example; voluntarily going into debt temporarily to ensure your family has a roof over their head, and with a long-term goal of owning the house as an assert, is a good investment. Spending money on infrastructure, stimulus, health, education etc. all help an economy grow and increase a country’s quality of life, which pays dividends in the future.

  • A surplus DOES NOT equal a good economy.

A surplus does not necessarily mean an economy is strong. At its core, a surplus means the government is taxing its population at a higher rate than it is spending the income on them. And if a surplus is achieved by cutting funding to long-term investments and selling assets, it is not economically wise. Charging more for a GP appointment, for example, is a poor strategy; doctors are a preventative measure and if people are priced out of visiting a GP when they need to, they will eventually cost the economy much more in ER visits, medication and lost working hours. The real problem is a revenue shortfall, and selling assets like Medibank is not a solution. Selling/privatising assets is a quick fix but a poor economic choice; making a dollar now but depriving future governments of a source of income is selfish and stupid.

Spending $24 billion on factory second fighter jets from the US that are largely useless unless we go to war with Papua New Guinea is poor economic management. Cutting funding from education and health is poor economic management. The Abbott government slogan of “trimming the fat” is all good and well, but the “fat” is in tax cuts and superannuation tax concessions for the rich, not trips to the doctor for the poor.