Suddenly faced with an economic crisis, the Rudd Government swung into action determined to convince the Australian electorate that the economy under Labor's dynamic management was strong and supported by a banking system the envy of the developed world.
Adding support to the rhetoric, Rudd distributed billions of dollars to the electorate,with the call to "spend, spend, spend".
A nation of shopkeepers
One's impression from this "bold initiative" was that Australia's economy was reliant on being a nation of shopkeepers and that such spending would produce jobs, jobs, jobs and revitalise the economy.
The billions would circulate through the economy and much would return to Treasury in the form of various taxes and go back out again.
The Rudd, Gillard, Swan Labor Trio obviously failed to research the true meaning of Adam Smith's Wealth of Nations:
To found a great empire for the sole purpose of raising up a people of customers, may at first sight, appear a project fit only for a nation of shopkeepers. It is, however, a project altogether unfit for a nation of shopkeepers, but extremely fit for a nation, whose government is influenced by shopkeepers.
Great Britain was by no means simply a nation of shopkeepers. It was a global economic and military power with an empire of far-flung colonies, hugely rich in resources.
Goods imported from the colonies fuelled industrial Great Britain that exported its engineering skills, steel, and products around a rapidly developing world. They were not reliant on selling Nike's, Nokia's, iPods, or wide plasma HD screens.
The Australian economy can, by no stretch of the imagination, be compared with that of Great Britain as a nation of shopkeepers. Australia's economy is reliant on revenues from exports of raw materials to other nations that in turn provide the "jobs, jobs, jobs" chorused by the "Rudd, Gillard, and Swan Labor Musical Trio".
Without resource and down line revenues, Australia appears the nation of shopkeepers upon which the Labor Government is reliant to revitalise the economy. Labour appears to have overlooked that there are real limits to this warped vision.
Wool, once Australia's leading export, will further suffer from this global economic downturn, inflicting yet more pain for our already hard hit rural sector.
Consumerism in Australia, like elsewhere in the developed world, is now reliant on debt and lots of it in the form of an apparently limitless supply of cheap credit. Dumping the two tranches totalling $43 billion into Australian consumer's pockets contributed little if anything to revitalise the economy. True, retail sales did increase but nowhere near anything meaningful. Much of the small rise in turnover was due to massive price cuts by the major stores helped by massive inventories in the manufacturing countries and more debt. In many cases, the money did however grant some temporary reprieve for those with credit card debt and pressing mortgage repayments. There were however, no new jobs, and many "shopkeepers" closed, adding to unemployment.
Discuss in our Forums
See what other readers are saying about this article!
Click here to read & post comments.
8 posts so far.