THE past year was when austerity dominated Federal Government policy.
May and December were really very low points in Australian politics in 2015.
Due to former Treasurer Joe Hockey’s radical spending cuts in May followed by the current Treasurer Scott Morrison’s cuts in the December budget update, the Australian economy is now set for a long period of underemployment and reduced incomes for middle and lower income groups.
Both Joe Hockey and now Scott Morrison have wrongly defined Australia’s economic problem as government spending and advocated the need to make deep budget cuts.
Consequently, both Hockey and Morrison’s combined budget decisions in 2015 will strip more than $17 billion over four years from government spending on families, low income earners and community services.
The underlying economic problems of unemployment, slow growth and weaknesses in aggregate demand are being ignored.
Worst of all, the current Treasurer, Scott Morrison, has reversed a key macro-economic principle.
During periods of low inflation, unemployment, and weak aggregate demand, government spending should be increased.
But the Treasurer now insists that any new spending has to be offset by additional savings and cuts.
Both the Abbott and Turnbull governments have embraced austerity measures when we really need more government spending, not less.
John Glazebrook,
Endeavour Hills.
