Richard Denniss has penned a remarkably accessible book entitled Econobabble: How to decode political spin and economic nonsense. It is part of the Redback Quarterly series and costs only $20.
The book rests on a number of premises, namely: there are, in Australia, no good economic reasons why we shouldn't raise more taxes to pay for better health, education and social services or use regulation to ensure that 'market outcomes' don't dominate our values p.143. The public are convinced about the benefits of investing in health, education and protecting the environment – it is the econobabblers who exaggerate the price and minimise the benefits p.144.
The mining industry employs a huge army of lobbyists, dissemblers, liars and PR people to spruik the benefits of mining: creating jobs, providing governments with royalties, paying taxes, employing Aborigines and creating heaven on earth. As the disaster of Adani's Carmichael open-cut mega-mine looms it is worthwhile recalling, as Denniss reminds us that "99 per cent of Australians don't work in coal mining p.31" and that the "taxes and royalties paid by all mining companies to all levels of government account for less than 5 per cent of government revenue. And that's the total amount paid, not the net amount after we deduct the subsidies they receive. The Queensland government earns more from speeding fines and car registrations than it does from the coal industry p. 32".
Denniss quotes with approval J. K. Galbraith's assertion that "the modern conservative is engaged in one of man's oldest exercises in moral philosophy: that is, the search for a superior moral justification for selfishness p.12."
Conservatives don't really want to reduce budget deficits. "If they did, they'd be happy to close the tax loopholes from which they benefit p.148". Conservatives rarely debate why we should not have a childcare system on par with France or Scandinavia's social welfare system; Denniss says "Why bother with actual debate when you can simply argue that 'we can't afford it' p.150".
Denniss points out that conservatives love budget deficits. When the economy is booming you do, as Costello did, cut taxes to the wealthy saying it is good for the economy. "When in a few years the economy begins to falter you cut spending to the poor. Introduce co-payments, tighten welfare eligibility criteria and if feeling particularly brave, cut taxes for the wealthy again. Tell the punters that the tax cuts will 'give investors confidence' p.72". You may remember the odd treasurer who has done this in Australia in recent years.
Denniss notes, "The average household in Australia has total debts of around $230,000. As a proportion of household income, on average Australian households carry 150 per cent debt. The net debt the government holds on our behalf, however, accounts for only 17 per cent of our national income. That is down from 41 per cent when Menzies left office. The OECD average, meanwhile, is 51 per cent p. 86." He argue that the government should increase the national debt to pay for necessary infrastructure and because such assets last many decades they should be accounted for over the longer term.
In relation to regulation of the economy the "business community is forever calling for 'labour market deregulation', and in 2006 the Howard government delivered them the WorkChoices legislation – which amounted to 1,000 pages of regulation. It took a lot of new regulation to deregulate the labour market, but the business community was happy nevertheless p.91." Big business never complains about the vastly increased regulations imposed on unemployed people or the massive regulations imposed on Indigenous communities under the Northern Territory Intervention.
Business' selective objection to regulation is perhaps no more clearly displayed than by the fact that "most shock jocks claim to hate 'nanny-state regulation' but they simultaneously claim to love 'law and order' p. 96."
In Chapter 4, Denniss looks at budget deficits. He ridicules the statement by Tony Shepherd, the Chair of Abbott's National Commission of Audit, that "Households understand they must live within their means. Governments must do so too." He points out that Menzies had Budget deficits in 9 out of his 18 years in office. The Snowy Mountain Scheme was largely built on borrowed money.
In Chapter 6, Denniss argues that so called free trade agreements are nothing of the sort. They are simply the terms and conditions and restrictions that two or more countries agree as the basis for regulating trade. In relation to the Trans Pacific Partnership whilst Trade Minister Robb had over a thousand meetings with business lobbyists, "unions, environmental groups and academics were prevented from seeing the draft text of the TPP deal p.123."
In Chapter 7, Denniss discusses the use and misuse of economic modelling and concludes that on far too many occasions rich companies or industry groups have used expensive economic modelling simply as a way to shut out opposition groups from engaging in debates.
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