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Why Penny pisses me off

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by Peter Switzer

Finance Minister Penny Wong has become the Government’s wicked messenger always running with the argument that unless something is done, we will all be ruined!

Her first starring role was as the Carbon Queen telling us that if we were going to meet the great moral challenge of our generation, we would have to cop the carbon crunch of an emissions trading system.

In a sense, she became a slightly less compelling co-star of the so and so’s The Inconvenient Truth. However, that ‘truth’ became too inconvenient for her then-PM, Kevin Rudd, and so with the end of his reign, she was shifted to the tough portfolio of Finance.

Don’t get me wrong, given the importance of her ministries, it seems apparent that her colleagues rank her as a smartie and, whether you like her or not, she is feisty and is across her stuff. That said, like all of us, she has shortcomings but she gives off the air that she is all-knowing and that does not rest easily with me (to put it less crudely than I would prefer).

She really got to me when she carried up the ‘ball’ on the weekend that this budget has to be a tough one but did not articulate the reasons for it.

You see, I don’t think it has to be tough for economic reasons. It needs to be tough because it is the first year of a new Government and that’s when tough budgets come. It effectively gives the Government two years to suck up to the electorate before the next election.

Wong told us on the weekend that we had a billion-dollar shortfall but did not simply say that this was partly created by the slower Aussie economy. Sure the floods and fires have added to the country’s future spending and has hit tax collections but so has the slower economy.

This week the IMF said it had cut our economic growth rate for 2011 from 3.5 to three per cent and when this happens taxes fall creating billion-dollar holes.

The reason why we are growing too slow is because the Reserve Bank and the banks have raised interest rates too quickly and have hurt the confidence of consumers and business. As one mortgage holder said to me yesterday: “We’re petrified about future interest rate rises.” And, for over a year, economists have warned about three interest rate rises this year and, while they have cut this back to two, this prospect stills scares many consumers and business owners.

If Wong and her team were fair dinkum, they would listen to the chorus of economists who are all singing from the one hymn book telling them that getting the budget back into surplus was an election promise worth breaking.

Moving back to surplus is a good goal but our slowing economy is propped up by the mining sector on Chinese steroids, and there are too many industry sectors in the slow lane of this two-speed economy that won’t easily cope with the too-tough budget on the second Tuesday in May.

The only reason Wong should be running around talking about trying to get the Budget into surplus is if they were doing so to help the Reserve Bank bring down interest rates. But she is not saying this. Given she is – when it is all said and done – a politician, she must not have thought about this connection, because if she did, it would have to be the first thing she would be telling us.

It’s funny, I reckon Wong loves playing the tough-arse sheila but sometimes when you are responsible for managing battered consumers and businesses in a slowing economy, the inspirational Joan of Arc might be a smarter role to play.

Watch more from Peter on SWITZER TV.

Published on: Wednesday, April 13, 2011

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