© 2019 by Henry Thornton. 

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Sunday Sanity Break, 4 September 2016

September 4, 2016

Last week's disappearing government was a shocking way for the new Turnbull-lead coalition mob to begin a new parliament.  Did no-one think their absence might give their government a bad time or even lead to something being passed that was against government policy?  Apparently not and it seems to humble scribe that it showed lack of affection, even contempt, for their leader.  Malcolm has said hard words to (presumably) the whips and his manager of business and at least one (junior) minister, but the damage has been done.

 

Still no coherent economic narrative, and the PM's argument that allowing deficits to linger and debt to keep increasing is a great moral issue is unlikely to make people sit up and pay attention.  After all, what have our kids and their kids ever done for us?  Things are so tough we'll be helping them to buy houses and paying school fees until the entity with the big scythe comes knocking. Many people will say that's enough, Malcolm, the debt's your problem.

 

What is needed, in my view, is a saying almost as snappy as 'Stop the boats', repeated constantly with real arguments.  Here is an idea: 'Raise productivity, fix the deficit, improve fairness'. The best global economists say the world is facing 'headwinds' that will cause economic growth to struggle.  Lack of productivity will cause growth to slow, as will rising debt (of both households and governments) and rising inequality of both opportunities and outcomes.

 

Rising productivity will increase growth of incomes and reduce growth household and government debt, especially if reforms increase incentives to save. Fairness is in the mind of people, but rising inequality is unfair as it underlines ways in which the rich get richer and the middle classes and poor folk get poorer either absolutely or relative to the rich folk.  If nothing else, this growing disparity reduces incentives for poor and middling folk, which is why rising inequality is an important headwind.

 

If this generation leaves a world of increased inequality, slower growth, or even negative growth, that will be unfair and morally dubious.

 

Mr Turnbull headed for China more or less immediately after his deeply unhappy day in parliament. He will find a far more civilised group, more his level. Despite the politesse, this theoretically powerful group consistently  fails to deliver increased growth, or to prevent global warming or even to worry about growing inequality or other headwinds.

 

The Sporting Life

 

Rest week for the AFL, an experiment that AFL coaches seem not to like and fans certainly dislike.  To fill the vacuum, there was a grand girls game at the Whitten oval - a preview of delights to come next season - and a fine Rugby League game in Melbourne.

 

Our cricketers have achieved partial redemption from a fine series victory in Sri Lanka. George Bailey, as I recall captain of the Australian one day side when it reached the heights, starred in both winning games after his recall from the wilderness, with innings of 90-something and 70-odd.  Australian cricket selection often leaves Henry baffled and frustrated, but what would he know having only captained Mitcham Under-16 team and later battled to hold his place in the Mont Albert Fourths?

 

Nick Kyrios has had to retire from the US open, with a recurrence of a hip injury. One wished he had battled on in the spirit of the Mont Albert Fourths or the Mitcham Under 16-cricket teams. Far better to hobble about until it is obvious to everyone that you can barely hobble.  Far better to go down fighting mate, in the gold Aussie tradition, not quit because you are down two sets to one .

 

Image of the Week

 Courtesy The Oz, Bill Leake

 

 

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