Treasurer Wayne Swan is either misguided or disingenuous when he claims that his clumsy bailout of Aussie banks didn’t cause a run on investment funds.
I admit, it’s easy for me to sit on the sidelines and criticize with the benefit of hindsight. But consider this, most other western countries, while offering guarantees on bank deposits, have an upper limit. Australia’s limit was pretty lame, so I think the treasurer decided to get hairy chested about it and instituded a guarantee without limit. And then in typical Labor style, decided to introduce a tax (which he calls a “levy”) on larger deposits to help pay for the insurance.
Most people accept that this is what caused most investors to try and pull their money out of investment funds. Why not? When they could get a guarantee without limit from their local bank.
But what seems even more worrying is the change of tack that the treasurer has taken in order to address the credit crunch. He’s decided to give people $1,000 before Christmas. I think the correct term for this is “Trickle Up Economics”. It’s sort of like the antithesis of extreme capitalism where benefits to the rich “Trickle Down” to the masses, like crumbs from the table. But in Swan’s scenario we give money to the masses before Xmas to buy their plasma TV’s and lotto tickets.
Maybe I should give him the benefit of the doubt, but this was the same pundit who before the election was bemoaning the lack of infrastructure investment. Who boasted at his first budget a $40 billion plan to invest surpluses in Nation building.
Now at the first sign of trouble, the infrastructure plans are put on the backburner so Mums and Dads can get a bit of extra pocket money before the end of the year.
Imagine how many more jobs would be created, how much demand would be created for our natural resources if, instead, he kept his word and kept his promise of nation building?
It doesn’t provide instant gratification like the Plasma TV money, but it has longer term benefits for us all.