Wednesday, June 20, 2007

Talking the disconnect

The major battle for the hearts and minds of Australian voters is being fought around ‘economic management’ credentials. Call it pedantry, or even polemic, but government has long since given up the reins of the economy.

The Australian government no longer control currency or interest rates. They no longer have any function in setting tariffs or central wage fixing. They have sold off airlines, rail systems, the national telco carrier and much more. What they have not sold outright they have corporatised. Anything but economic management.

That just leaves fiscal policy, setting the level of public expenditure, distribution of the loot – or otherwise. The fact that there is still plenty of loot to distribute is thanks solely to the China boom. The resource exports to China are set to carry us for a while yet.

The fly in the ointment there really does come down to politics and who gets the kudos – state or federal politicians. So holding the purse strings the feds can behave a bit like parents doling out pocket money. More often than not there are strings attached designed to give the feds maximum glory for spending our money.

Meantime the major parties are running the agenda on this false claim of economic management. At present the Howard Government has the running in this illusory game. There are very real issues out there, but these guys know the glib jargon that gets the average punter going.

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