As an American, some aspects of Australia's economic situation certainly fill me with envy. Low unemployment, abundant resources to exploit, and great prospects for growth, even with a superior social benefits program. You would think that, under such circumstances, balancing the federal government's budget would be a snap. You would be wrong.
The story is passing strange. Evidently BOTH the Labor-Green government and the opposition Coalition believe, and have made a priority, that a budget surplus is the way to demonstrate to the voters that they are being fiscally responsible. Labor has been saying consistently, until last night, that they would deliver a federal budget surplus even earlier than promised.
Evidently October's revenue projections finally forced the government to throw in the towel on the surplus. Last night, I watched in astonishment as a news anchor raked the Finance Minister over the coals on this policy backflip. (The other Americans watching with me said, "Wow, wish our US media would hold people's feet to the fire like that!") And this morning, the Opposition said they weren't sure that they would continue having a surplus as part of their platform, either. So there may not be a huge political penalty for the backflip--just a concession to changing circumstances.
News stories since I've been in Oz have presaged this development. Deep cuts in research and defense have been among the sacrifices to the surplus god. Being in research, and having considerable sympathy for defense, I've found this somewhat alarming. And yet, simultaneously, government program after government program was announced providing EVEN MORE social benefits: supplemental pay for day care workers; national disability insurance; relief for climbing energy bills. Each one cost billions. Evidently these were EVEN MORE important than the surplus!
Now here's something I really don't understand. One would think that Labor folks would be Keynesians. You know the mantra: government deficit spending stimulates the economy, inflationary effects are absorbed by growth, and money grows on trees. So why were these left-leaning folks EVER touting a surplus?
Someone will explain it to me in terms of the unique Australian psyche. Until then, it'll just remain a mystery.
Now, having had some fun at Aussies' expense, I will praise them. In Australian politics, both the government and the opposition CARE about fiscal responsibility. They give it PRIORITY. They COMMIT to fiscal responsibility, even when they sometimes have to modify their stance in the face of economic changes.
Oh, the envy from this American. In the US, it took the grass-roots Tea Party movement to force even ONE of the two parties to address fiscal irresponsibility, and that party does so with EXTREME reluctance. Fiscal responsibility is FAR, FAR below the big priority, which is RE-ELECTION: buying votes with social programs (for the Democrats) and avoiding backlash from the AARP (for the Republicans).
You rock, Australia.
[And on a silly note: did you know that Australia has its own TEA party? Clearly its name is not a reference to that event in Boston Harbor in the 1770s. No, here TEA stands for "Taxed Enough Already." You gotta love it.]
