He essentially says Morrison is playing politics and is not good at economics and it may well catch up with him.
See also Greg Jericho on the economics.
For those of you who were not around Malcolm Fraser and his Treasurer John Howard were saying the same things this present mob are however a severe recession caught up with them and their last budget resulted in a spending spree to avert the recession. It was too late and people were perplexed why the government were doing the very thing they said should not be done i.e spending a lot of money.
Morrison is running into bad headwinds and is betting on a turnaround to ensure things get better. His big selling point is an actual surplus ( in reality a balanced budget). Even here the latest Niemeyer statements by the Department of Fiance show the budget running BEHIND projections because of the slowing economy. Thus Morrison is hoping high iron ore prices overcomes a weak domestic economy for the budget to get 'into surplus'.
Will Morrison copy Fraser and have to adopt expansionary economic policies as Ross Gittins alludes to. It is possible. There are all sorts of scenarios that could lead to this. My guess is they are unlikely at this stage HOWEVER they should NOT be discounted.
Some of these include:
- A slowing Chinese economy
- The USA/China trade dispute impacting the world economy
- A hard Brexit eventuates and the Bank of England cannot obviate it
- The weak wages growth is because of weak employee power and will continue to be weak into the medium term
It would be both ironic and appropriate for a so called very good politician fail because he was too good at politics!!
No comments:
Post a Comment