Another example of poor polciy by government

The ABC reported that the government is to spend $10 million on building a war trail to commemorate the Australians who fought and died along the Western Front in northern France, announced by Veterans Affairs Minister Allan Griffin.

In normal times, this should be a very good thing and a commendable act. However, with no disrespect to the heroic forebears who made great sacrifices and fought on behalf of the country, it could be argued that it is not the appropriate time now to spend more money now with little benefit to the economy. To be fair to the government, this is a down graded alternative to the former government's $35 million plan to build a memorial at the battlefield of Villers-Bretonneux.

Everyone knows that we are currently at an extremely tough time economically, experiencing a global financial and economic crisis and a possibly severe domestic recession. Unemployment is rising sharply. The government, after a long period of denial, has now finally acknowledged that Australia is likely to experience a recession when it virtually does not have any other choices other than to do so. The IMF has just released its most recent update of the world economy and forecast the Australian economy will shrink by 1.4% this year, with unemployment rising to 6.8% by end of this year and 7.8% next year. A lot of families are already struggling to make ends meet now and the news means that more are expected to fall into this category in the coming year.

The government and the Treasurer have been talking up the prospect of an inevitable big budget deficit in the may budget to be out soon. The PM, the Treasurer and the Finance Minister have been arguing the need for making tough decisions over priorities and the need for further fiscal stimulus on top of the two packages in last November and more recently. People would have rightly taken the message to mean reprioritising, to spend more in areas that can boost stimulate the economy and limit the rise of unemployment, such as education and training, and appropriate infrastructure works that can enhance skills and future productivity. Where non-urgent and lower priority spendings can be saved or reduced, do it now, or if some spendings can be postponed to some time in the future, do it later. This is common sense. But the public has unfortunately been badly mistaken.

Tens of billions cash has been handed out, most of which have been or will be saved rather than being spent with little impact on demand to boost the economy, contrary to the government's wishful thinking, though not to its hidden agenda to bribe votes with an eye for the next election. The sad of the matter is that the government's first cash handouts in last November had been proven before it made the second stimulus package that contained another big component of cash handouts, effectively a repeat of its failed policy. Further, after a much delayed and an unsuccessful bidding process for its electoral promise to building a national broadband network (NBN) of around $10 billion, the government hastily announced a new initiative with a sky rocketing increase in the costs to over $40 billion to build a NBN of optical fibber to homes (as opposed to the original fibber to nodes), in the name of higher speed. This has occurred against the background of a declining economy, rising unemployment, a budget falling from respectful surplus to an ever increasing deficit to be filled up by borrowing and debt.

The minister stated that it is particularly important to act now as Australia moves towards the centenary of its involvement in the war, and the international focus that will occur in the years ahead. But Mr Minister, while it is not wrong to say this, how many years will be until the centenary? Do we really run out of time to build it before that? Can't we build it later after our economy has returned to its normal growth and unemployment is reduced rather than rising? Or, will this stop businesses from closing and save jobs? Has the government got its priority right? It is high time for the government to wake up, and wake quickly and do some sobering thinking and reflection. While the current global economic crisis is not Australia’s or the government’s doing, one has to wonder why Labour federal government is most likely to create more debt for the nation. The government will need to change course to better manage the economy and national affairs to enhance rather than diminish the nation’s welfare with an unnecessarily large burden of debt for future taxpayers. Please don't make avoidable mistakes such as this one.