The country can’t afford to have Kevin Rudd back
letter published in The Australian, 10 October 2011
Paul Kelly has exposed the attempt by Kevin Rudd to claim his support for the G20 as a vehicle to justify his return to prime ministership (Inquirer 8/9 October). But like many of Rudd’s obsessions when PM, his support for the G20 to implement coordinated international action to restore economic growth was based on seriously wrong analysis. It would be a disaster to have Rudd back.
The G20 decision, taken in April 2009 with Rudd’s prominent support, was to implement “an unprecedented and concerted fiscal expansion ... that will, by the end of next year, amount to $5 trillion, raise output by 4 per cent, and accelerate the transition to a green economy”.
The result? We now have a large downward revision of forecast growth in advanced countries to only 1.6 per cent, an inability to afford green economy policies and the possibility of another recession.
Most importantly, the G20 failed to recognise that the basic problem in both Europe and the US was the excessive public and private debt. The present circumstances require not confidence destroying debt defaults but a debt moratorium recognising that time is needed to work off the excessive debt. It also requires a full blown inquiry into why the central banking system failed to prevent that excess and what can be done in future to ensure adequate risk assessments of debt levels.
Des Moore, South Yarra Vic