Bad week for Julia, worse week for Joe
By Phillip Coorey, Chief Political Correspondent | smh.com.au | 11 September
For the Government at the moment, it's a case of every silver lining has a cloud.
At a time when unemployment should be marching steadily towards a budget forecast high of 8.5 per cent, it remained stubbornly fixed at 5.8 per cent for the third successive month.
Julia Gillard and Kevin Rudd were quick to warn of the "troubling aspects" masked by the headline figure.
Jobs in August fell by 27,100, disguised by a decline in the participation rate, meaning people had stopped bothering seeking work.
And full-time jobs were decreasing while part-time jobs hit a record high.
This all meant that although the economy was bearing up admirably, it was not yet robust enough to cope without the remaining stimulus spending.
The Opposition had the polar opposite take. Joe Hockey said unemployment and economic growth were all much better than anticipated when the $42 billion stimulus package was designed.
Therefore it was time to stop spending money, because the next indice to increase would be interest rates. He did not dispute that interest rates were more of a concern than jobs. All this week, Parliament has been a battle of the macro versus the micro.
The Government has concentrated on the macro or big picture – how the stimulus spending has helped keep the economy out of recession. To withdraw the money now would send the economy into recession and drive up unemployment.
The Opposition has focused on the micro – singling out bungled or controversial school building projects and using these to highlight what it says has been wasteful and needless spending.
Ms Gillard had her toughest week so far, fending off example after example of schools with buildings they either did not want or need – and there will be more next week. Leaving Parliament yesterday, Tony Abbott declared Ms Gillard had been left wearing "a shit-eating grin".
Ms Gillard was certainly tested but she had expected worse. Her diary was cleared of all appointments from midday onwards on Monday in anticipation of a censure motion which never came.
The Treasurer, Wayne Swan, accused the Opposition of "nitpicking away at the edges of a program that goes to the core of support for employment in Australia and small business".
The Government went after Mr Hockey on several fronts yesterday, believing he had the worst week of anybody. There was his suggestion of a left-wing bias among the G20 – which opposes withdrawing the remaining stimulus.
And there was his policy pledge that the Coalition, if elected, would cut spending to 24 per cent of GDP, down from the present 28.6 per cent.
This would entail savings of almost $49 billion from the budget in a year. Mr Hockey later clarified that such a spending level would take many years to reach. The Government mocked the Opposition.
At the same time Mr Hockey was giving that interview, the Coalition in the Senate voted down the biggest savings measure in the budget – the means-testing of the 30 per cent private health insurance rebate, which would have saved $9 billion over a decade.
First published by Smh.com.au on September 11 2009
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