The Fairfax Media have come a long way since the GFC. This piece by Mark Kenny at least accepts the idea that the Rudd government overreacted to the GFC and spent too much. Even then he makes excuses.
With the clarity of hindsight, it is clear Labor overdid the effort to stave off recession but the risk of doing too little was correctly assessed as the greater sin.
But he also makes a very common error – to be fair both sides of politics have consistently made this error.
… and our good fortune in being a major commodity supplier to China, insulated us from the worst effects of the global financial crisis.
Good fortune had nothing to do with it. Yes it is great to have paying customers. The challenge for any business isn’t paying customers, but having a product to sell in the first place.
Coal and iron ore are not rare commodities. When these commodities are exported it isn’t just the coal itself or the iron ore itself that gets put on a ship. It is the institutional environment that supports the contracts and investment that led to the coal and iron ore being mined and then sold. Australia has a comparative advantage not so much in coal and iron ore as in an institutional framework that means that we don’t suffer from the resource curse and/or expropriation of investment. That is somewhat rare.
It is that institutional framework that the current government has trashed. Now if you think that all that matters is paying customers then you won’t care about the institutional framework and that is the consistent policy error this government has made. The notion that the economy will perform well irrespective of the institutional and supply-side damage causes by government intervention has led to the current under-performance both here and abroad.