Living in Victoria has its interesting parts, but possibly none is more enthralling than the certainty that a Labor Government will make a mess of everything it does. Watching the building of the new train line from nowhere to nowhere with its billion dollar station at The Shrine of Memorial, where no one ever goes except once a year, and even then most who show up either walk or march. Its construction has more or less ground to a halt and every time I drive down St Kilda Road I am reminded of what else Labor has done. These include the other billion or two spent on stopping a freeway being built that had been commissioned by the previous Liberal government; another billion or so spent on the desalination plant that has never produced a pint of water for anyone; or the Miki ticketing system on our trains and trams that again cost a billion but which could have been bought off the shelf, either from London or Hong Kong. Now there is this in the morning papers: Victoria to borrow $24.5bn emergency loan.
Let’s face it. Daniel Andrews is the worst political leader, the most economically illiterate Premier, we may have ever had in Victoria and I lived through the days of Joan Kirner. When the place goes bankrupt, as it must, we will relive the 1890s collapse and then some. This is what he is apparently going to do:
Victorian Treasurer Tim Pallas said $10bn of the emergency fund would be spent in 2019-20, with the remaining additional $14.5bn set aside as a “Treasurer’s advance” for 2020-21.
“The Treasurer’s advance will be a process that will enable the government, should it need to [ha ha ha], to draw upon additional funds for the purposes of dealing with … the additional and continuing demands on our health system, but also the additional effort that government will have to put in place for the purposes of generating greater economic activity, and … to make provision for those in the community who are doing it tough and need a government that is committed to assisting them to see this event through,” Mr Pallas said.
State borrowings were already forecast to reach $47bn next financial year and $55bn by 2023, without accounting for cost blowouts on major projects [an absolute certain with these people at the helm], after the government opted to borrow an extra $25.6bn over ten years ahead of the 2018 election to fund infrastructure.
The Treasurer said the $24.5bn would be sought in addition to $35.9bn which the government had calculated as being required to see it through to the postponed May budget, which is now due to be handed down before the end of the year.
I know with modern economic theory at such a low grade level this will be impossible to understand, but this is crucial. To get the economy up and running there is no stimulus needed. No additional money needs to be spent. Just take off the restrictions on economic activity and within a year no one will notice a thing, except those entrepreneurs whose businesses have been ruined, or those workers who never get back to work for extended periods of time, or the many landlords who have lost their properties or quite a few others whose livelihoods have been damaged. From a macroeconomic perspective, GDP, after having dipped will turn up and then on we will go. Nothing will need to be done since the market will just restore things all by itself. Dan would not know that, nor would he understand that.
My hope is, however, that our Federal Treasurer will. He should talk to Peter Costello about how a market economy works if he cannot find anyone in Treasury to do it. That, unfortunately, is a real possibility.
THINGS ARE WORSE THAN I THOUGHT: Getting to the paper last thing at night does have it’s advantages since it postpones some of the bad news. I have just run across this: Coronavirus: Bridges and roads hailed as the path to recovery.
The construction sector has been one of the few areas of the economy left relatively unscathed by social isolation restrictions. State regulations have been eased to allow builders to spread shift hours and help workers maintain social-distancing requirements while minimising delays.
“I want to see more roads built, more bridges built, more roads fixed,” the Prime Minister said on Thursday. “I want to see those things done now because they can be done in a COVID economy.”
I ought to have expected it but you have to live in hope. They do seem to get it in other places: Schools and shops take first steps of Angela Merkel plan. And then there’s this: Italy’s firms shake lockdown using shortcut in coronavirus law.
No mention in either of any stimulus.