Analysts Fail to Find Heart of Matter
letter published in The Australian Financial Review, 8 February 2012
Economic analysts in Monday’s AFR have identified numerous government policies that are preventing or inhibiting growth in productivity and the economy.
Warwick McKibbin’s “Catching Europe’s ills” (Opinion) outlines a long list of mistakes by the present government including a reliance on Keynesian economics that involved increased spending on projects with low or negative returns but added to unproductive debt.
Alan Mitchell’s “Mood music for boom that’s over” (Economic Briefing) rightly suggests that, after the partial reversal of earlier reforms and the week-end speeches by the leaders of the two major parties, it is now hard to identify the next generation of reforms.
But neither analyst seems to get to the heart of the matter. Surely that is the unwarranted belief that government is the determiner of our economic and social fate.
If Australia is to improve its economic performance, and create a society where (desirably) many more individuals accept responsibility for their own fate, it is behoven on our political and other leaders to recognise the need to reduce the role of government and the accumulation of unproductive debt and, instead, to allow competitive private enterprise to expand and flourish. As McKibbin points out, that is the lesson from the recent experience of Europe and, I would add, also from that of the USA.
Nobody believes in unfettered markets, but the dissatisfaction with the performance of political leaders both here and overseas centres on their emphasis on government intervention and regulation –and borrowings.
Wouldn’t it be marvellous if a political leader enunciated a list of things that his or her party is not going to do?
Des Moore
Director, Institute for Private Enterprise
South Yarra Vic