The economy needs CPR – let's worry about reform later

I can’t take seriously all those people saying we mustn’t waste a crisis, but seize this great opportunity to introduce sweeping economic reform. It’s like telling a baby who hasn’t yet learnt to walk it should start training for the Olympics.

These urgers have forgotten that micro-economic reform seeks to increase economic growth by making the supply side of the economy work more efficiently. It delivers results only over the medium to long term. It’s thus no substitute for macro-economic management, which deals with managing the demand side of the economy in the short term.

Most households and businesses will be in cost-cutting mode. Firms have been incurring overheads while earning little. Even those households still working will be worried about their big mortgages and fearful of losing their own jobs. As Treasury secretary Dr Steven Kennedy has warned, “some jobs and businesses will have been lost permanently”.

It won’t be “external stimulus” because the rest of the world is growing faster than us , or a lower dollar is making our exports cheaper to foreigners because we’ll continue banning foreign tourists and overseas students. Export commodity prices aren’t rising.

1RossGittins Yes, but what are 'useful' projects? Most shovel-ready projects are business-as-usual projects of the pre-coronavirusaus era. 2nd Sydney airport, road tunnels, high density apartment towers and assorted metros to connect them etc. Mind-set of planners needs to be reformed first

1RossGittins It’s going to be on life support for a very long time to come :

1RossGittins biz chorus is demanding productivity reform Even now we have fragmentation of labor market Many can only get casual P/T jobs barely enough to live on Others have to be a self employed contractors Just lousy no jobs security What d hell do they want

1RossGittins It can only be a government led recovery, yes. But if we are throwing around dollars, we can have a bit of wisdom about how to spend those dollars to turn the ship of micro-economic reform. Yes I'm going there, ideology aside, fossil fuels are on the nose. Gas led recovery, nah!

1RossGittins

1RossGittins That’s the problem - we continually say that we will address reform “later” and never do so. Easier to restructure a factory when production is shut down - same for the economy. Reform while quiet to ensure positive results when it starts up.

1RossGittins reason libs are pushing reform at federal & nsw State level so they can implement stuff they couldn’t implement before like corporate tax cuts , removal of stamp duty & imposing land tax on homes which already paid stamp duty so it becomes a huge pot of money to waste

1RossGittins The green new deal is an economy killer!

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