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Labor's recession recovery myth

By Arthur Thomas - posted Friday, 20 August 2010

Since the global financial crisis, Kevin 07 has been quick to claim that Labor has guided Australia through the threat of recession based on its ability to make positive, quick and hard decisions, with Australia emerging as the only nation among the developed nations, with a strong and growing economy.

The decision-making ability produced a major stimulus spending package and innovation that created the jobs, jobs and jobs that Labor continues to promote to push Australia's infrastructure into the future.

When Kevin 2010 self-destructed with loss of direction and a growing list of broken electoral promises, several “Julias” emerged to take control and moved quickly into election mode to secure another term for Labor. While the faces have changed, the script is unchanged with the same rhetoric, rosy promises and lack of hard detail.


Of serious concern is Labor's total reliance for its promises and plans on a single factor in a shaky global economy - China's continuing economic growth and demand for Australia's resources.

The Liberals were quick to focus on the broken promises and the disastrous schools, computers, and insulation spending packages.

The schools building program

In many instances, the Building the Education Revolution (BER) program has lacked basic commercial responsible planning and ignored input from schools as to their most urgent priorities. Schools have been saddled with new buildings that in turn increased expenditure for security, maintenance, cleaning and daily energy consumption.

Labour has acknowledged that the hastily cobbled program incurred a huge "fast tracking premium" resulting from lack of safety measures, questionable quality and over pricing, but it is, apparently, a small price to pay for new school infrastructure.

Insulation package

This package was more of the same: lacking planning and supervision and displaying recklessness and a total disregard for advice on safety, just to be seen to be spending the money.

No matter what the claimed benefits, the sacrifice of lives of workers involved in the program is a totally unacceptable and horrific premium for this fast tracking strategy and political gain. There are now the thousands of homeowners with their single biggest investment left compromised, at risk of fire, due to a lack of a comprehensive inspection and rectification program to determine how safe they are in their family home.


What did save Australia from recession?

The Labor Government is right about stimulus spending being responsible for Australia's escape from recession. But it has failed to acknowledge, however, that it was not its stimulus package.

China's massive US$586 billion stimulus package was responsible for driving demand for Australian iron ore to produce steel for China's mammoth industrial, property, and infrastructure development. China's steel industry combined with its twisted speculative iron ore import system drove iron ore prices to record levels.

Much of the work created by this demand pushed miners to increase capacity, bring new ore reserves on line and provide the stimulus for explorers to move to mining status.

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About the Author

Arthur Thomas is retired. He has extensive experience in the old Soviet, the new Russia, China, Central Asia and South East Asia.

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Creative Commons LicenseThis work is licensed under a Creative Commons License.

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