Surplus or bust.

Wayne Swan: "You're cut."

I remarked in a previous post of mine, regarding the flood levy, that the political nature of the decision to return to surplus in 2012-13 bothered me, and it still does. What I’ve seen in the media is the unflinching acceptance of the apparent truth that the budget bottom line signifies the inner reality of the country’s economic position. I’ve noted before that I’m nowhere near an economist, or even a lay, arm-chair one. Throw a few numbers at me and I’ll look back at you with a bit of bewilderment. I’m capable of following the logical sequence until graphs and modelling and whatnot are involved – at which point I defer to those who I trust know better.

I suspect most in the Australian community are in a similar position. We rely upon the media in the realm of economics possibly more than any other area in political discourse. We need the media to describe to us the state of the economy, and to analyse the quality of proposed economic policy. All policy areas are complex (many deceptively so), but few areas rely so heavily on a few received assumptions reinforced by the media class.

One of these assumptions, as I’ve mentioned, is that the state of the budget bottom line is reflective of our economic situation. Moreover, that reaching this state is a prudent (maybe even virtuous?) goal.

Uni of Newcastle professor and blogger Bill Mitchell sums up the situation nicely as such:

I imagine it goes like this. Your driving along listening to the radio and the Australia Treasurer comes on and is saying that we need a budget surplus because we have a once-in-a-hundred years mining boom and are near full capacity but given the government tax take is seriously below the forward estimates because growth is slowing, the government has to have even more drastic cuts in spending in the upcoming May budget than first thought. Why? To achieve the budget surplus! Then the Opposition spokesperson for matters economic says we are running out of money. And us ordinary citizens take it all in because it is headline news this lunchtime and we become entrapped by the logic of the situation as set out by the journalist who fuels the discussion along these lines.

Mitchell though, as he points out, is “not an ordinary citizen in this context” and deconstructs the media groupthink that surrounds this issue in his latest blog post. Is Mitchell right or wrong? Who am I to say. What I can say is that to a layman Mitchell’s posts are consistently more persuasive than anything in the mainstream media.

The assertion that we can ascertain our economic prosperity from an arbitrary over/under figure indeed seems to me to be deeply problematic. I’m yet to be convinced that the return to surplus is anything but a political goal dictated unashamedly to us, the audience, by (1) the hollow shell of the Labor Party led by a vacuous, uninspiring leader and a narcissistic, cynical party machine; and (2) the neoliberals in the print media and the Coalition.

So forgive me, if amidst all this talk of “tough budgets” and “regrettable cuts” I dismiss the Gillard/Swan budget package as a political fix designed to make the ALP look more neoliberal than the neoliberals. I’ve love for the media to convince me otherwise, though… It’d certainly make me a lot more optimistic about our future.

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