Best economy managers? Not these Liberals!

Liberal politicians always say that their party are the best economic managers. As this quick review of their past 10 years in power, both federally and in NSW shows – actually that is not the case. They just spin a better line and are better at hiding the truth.

Money into roads

The Liberals used to have a slogan that interest rates would always be lower under the Liberals than under Labor – that was shown to be untrue. The Liberals were in power for a similar era, both federally and in NSW, for the period 2011 to 2023 (NSW) and 2013 to 2022 (federal). They were in power long enough that they cannot blame anybody else for the extreme problems in economics and key policy areas affecting NSW.

The Liberals also used to brag about a series of surpluses delivered by Peter Costello, Treasurer under John Howard, at a time the global economy was doing well for many countries around the world. Later we found out that they had not delivered the infrastructure that was needed – that took the shine off the claim.

So then when the federal Liberals regained power in 2013, they put the infrastructure money especially into motorways. NSW then spent federal and state money on motorway monopolies rather than on public transport. In financial terms, motorways are the most inefficient method of transport: it costs more per kilometre per person than any other form of transport. Public transport would have enabled transport for many more people, and would have kept a substantial number of those people off the roads, thus reducing congestion more effectively than by building new motorways.

No money for schools or hospitals

That spending on motorways sucked money out of the budget that should have been spent on hospitals and schools. Because they they were short of money for schools, the NSW Coalition have promoted private schools funded with federal money. Greater federal spending for private schools than public schools has led to lower performance of the Australian education system compared to other countries worldwide.

The education shortfall went beyond schools. A major problem has been that over a long period, TAFE was substantially dismantled. Of course that started under NSW Labor, but the Liberals picked that up and continued it for a long period. This led to lower and poorer skills growth through a range of far less effective private colleges. This in turn led to skill shortages in construction trades, IT and many other areas. Where were the electricians, plumbers, tilers and many more? They didn’t exist, because the training system was very much not working.

Meanwhile, concerned more about money than education, out of touch politicians have been telling stressed universities what kind of research they can and can’t do. They have also been deciding what kind of careers would cost students the most, with incentives for careers that the Liberal Party likes.

When it comes to health, the number one Liberal policy has always been subsidising private health insurance. Economists tell us that this is inefficient, but the Liberals prefer it to really fixing the underlying issues in the way health is handled by the Commonwealth and the states.

Where I live, my nearest hospital is Concord Hospital, half of which operates in 1950s era buildings. Medical people say is not just about the age of the buildings, but the broader effect on hospital operations.

It’s about housing, not just migration

To fill its skill shortages, Australia began to import many new people. Immigration progressively increased, while the costs of tradespeople went through the roof. At the same time, labour shortages blew out the cost and delivery times of construction.

And where were all the new migrants going to live? Increased migration helped lift the demand for housing well beyond available capacity. This was on top of the other ineffective housing strategies like negative gearing and the capital gains tax discount, giving Australia some of the most expensive housing in the world. At the same time, Australian governments, following the Liberal mantra that the private sector is best, continued the sell-off of government owned housing, creating a perfect storm.

Industry policy

When the Liberals shut down the car policy in an ideological fit, it wasn’t just about cars – the car industry was a central focus of skills development for Australian manufacturing. And for the decade of the Coalition in power, Australia had no coherent policy on energy – the key input to costs not just for every household, but for industry as well. Other countries put effort into reducing the energy intensity of their economies (California and Texas did this, despite their different politics), but Australia was left behind. What did Australia do – the Coalition kept wages down as long as possible, while the industry did fine and the wealth gap grew. What’s the point of an economy that keeps the people poor? It doesn’t help anybody. Certainly not retail, which relies on household spending and has consequently struggled.

What have the Liberal managers achieved?

So now we see the result of the Liberals managing the economy:

  • Privatising key sectors of the economy, so that private organisations divert public policy in their own interests.
  • Massive spending on enormously expensive (and ultimately private) motorways, but they’re nevertheless highly congested.
  • Massive spending on private schools (some obscenely wealthy), but the huge gaps in public schools funding are dragging down the performance of education across Australia – leaving many disadvantaged children behind.
  • Wages which for many don’t keep up with inflation, while the gap between rich and poor has steadily risen.
  • And growing all the time, a housing crisis putting home ownership out of reach for more and more Australians, despite the desperate measures of the Liberal Party trapped by their own interests and ideology.

Labor has its problems, but a drover’s dog (ie anybody) could do better than the Liberals. And don’t forget that the Liberals have also been more corrupt.