Given the violent reaction here on the Cat to my op-ed regarding my Senator Cory Bernardi op-ed, Bernardi fails national economic test, which was originally published on the Spectator Australian website, I thought I would come back with some comments to respond to my critics given the seriousness of some of the issues which the column covered.
As a first order of business, I should note that a critical paragraph in the op-ed piece was accidently not published by the Spectator Australia (through a computer malfunction with their publishing system) which may give the reader additional context. Hence, that critical paragraph did not make the version which was published on Catallaxy Files. For those interested, the corrected version is now on the Spectator Australia Website and I would encourage readers to read the piece again.
Secondly, I wish to reiterate for the record that I resigned from the Liberal Party on 13 May 2016 and that I did not for vote for the Liberal Party at the 2016 election and have no intention of voting for them at upcoming elections whether they be federal, state or local. Hence, any accusations that I am operating as an agent of the Turnbull Government or the Liberal Party is incorrect. I am not a member of any political party and remain independent in my views and associations.
Thirdly, when I called for a whole host of activities or objects to be ‘eliminated’, I didn’t not mean eliminated by the government through new laws or regulations which has been one interpretation. Rather, what I meant was that these things need to be eliminated culturally by individual Australians making conscious economic decisions which would lead to substantially less consumption and substantially more savings. That is a change of habits individually made on a voluntary basis.
Fourthly, on the issue of race, it is ridiculous to suggest that my comments were an attack on white people or white bashing. Australia has historically (even before WWII) had high rates of consumption and debt and low rates of savings. The 1880s and 1920s (prior to mass continental European immigration came to Australia) are two periods which bear this out.
Moreover, Australia’s over 150 years ongoing current account problems is also an indication of a society which has long relied upon foreign capital and an inability to save for its own domestic investment and consumption requirements. Anne Henderson’s biography on Joseph Lyons clearly calls out that Australia was the most indebted nation in the British Commonwealth leading into the Great Depression. London Bond holders in 1929-30 were in fact very nervous that Australians would not meet their obligations to paid back the debt which they had borrowed during the roaring 1920s. If Jack Lang, the then premier of NSW got his way, we wouldn’t have.
There are definite Australian cultural habits, specifically as it relates to alcohol and gambling which have been long ingrained into Australian culture and they date back to the establishment of the colony of Sydney. I don’t think it is racist to call out this cultural behaviour and link this to attitudes relating to consumption, savings and debt.
Being the son of two immigrant parents who came to Australia in the 1970s (I was born in Australia in 1981), I have been able to witness clear differences in attitudes to work, consumption, savings, debt, etc between myself and my peers in the Illawarra region in southern in NSW. I have also been able to talk to many 2nd generation Australians from non-British and non-Irish backgrounds who have witnessed some of the same differences in cultural behaviour that I have observed and whose parents also saw the same differences when they came to Australia in the 1940s, 1950s and 1960s from Southern or Eastern Europe.
It may be uncomfortable to talk about some of these differences openly, but it doesn’t make them any less true. One can hardly claim that it was Greek or Italian Australians who created the laid back Australian culture can they?
My parents were fortunate enough to pay off their house in 5 years in the 1980s through significant hard work and economic sacrifice. Also, my wife and I were fortunate to pay off a $313k mortgage in 4.5 years in recent years which involved us saving anywhere between 50% – 75% of our income through the financial year and putting it on the mortgage.
If more Australians saved at these sort of levels, Australian financial institutions as well as individual Australians would have more capital to invest in domestic projects which have high capital requirements particularly in the mining, infrastructure (including transport and utilities) and agricultural sectors.
Fifthly, I have been writing in several publications for more than 12 months and have been talking to members of Parliament for years about significant structural imbalances which exist in the Australian macroeconomy. Some of my columns have been republished on Catallaxy Files have warned readers on Australia’s household and foreign debt bubbles.
You can also see some of my concerns on news.com.au, particularly the article titled “Australia headed for Economic Armageddon.”
Australians have racked up record high debt in the non-government sector more so than the 1880s and the 1920s (two periods which preceded economic depressions). I am deeply concerned about this development and what this means for the Australian middle class in the event of an international economic shock.
Most Australians today are completely asleep to the significant systemic economic risks which they are currently exposed to. I do acknowledge that government policies have played a significant role in building up the current structural imbalances and bubbles. Having said this, one cannot ignore cultural or sociological factors which have contributed to current trends in Australian consumption and asset allocation decisions. Both have to be considered as part of the broader debate.
Focusing on non-government debt is important economically because economic research has shown that an economic collapse in the non-government sector will result in a deeper and longer lasting economic calamity relative to a government going bankrupt. Having said this, my comments does not mean I do not want substantial cuts in Commonwealth and State government spending.
On the contrary, I once argued with Finance Minister Matthias Cormann at a Young Liberal dinner in 2010 that Fraser’s and Howard’s conservative economic credentials should be questioned given that they both failed to return Commonwealth spending as a proportion of Gross Domestic Product (GDP) back to pre-Whitlam levels (i.e. 18% of GDP).
I strongly argued with Cormann that the Coalition under Abbott should seek to return Commonwealth spending to pre-Whitlam levels which would have required a real cut in government spending by approximately $200 billion of the forward estimates, which would have been the largest cut in federal government spending in Australian history.
Hence, for all those on Catallaxy files who are seeking substantial cuts in government spending and a reduction in the role of the state, I am agree with you whole heartedly.
Finally, many people have not appreciated my article because they believe that I should be directing fire at Turnbull, Shorten and Di Natale given how far away they are from libertarian and conservative ideals. While I agree that neither the Coalition, the ALP or the Greens do not share my values and are not addressing my core policy concerns, this does not mean that politicians on the right such as Bernardi or Hanson should not receive critical scrutiny, particularly when inadequate policies are put forward to address national public policy challenges.
I am not a tribalist and will not blindly follow any false messiahs. Conservatives and Libertarians need to articulate well considered policies and actually persuade ordinary Australians at the grass roots level that our philosophy and policies are the best for them, their families and the nation as a whole. Putting forward poorly considered policies will ultimately be bad for Australia and will be politically disastrous for the broader movement as people will lose confidence in our philosophy and policy prescriptions.