Australian economy

Shakespeare reckoned that a rose by any other name would smell as sweet. Old Will is right of course, because whether you call it rhubarb, a rhododendron or a rocking horse, a rose is a rose.

Sometimes though, if enough people use the new name of an old thing often enough, they can convince themselves and others that it is in fact a different thing. Then, having transformed the thing semantically, we can consider it a new thing, and treat it as a new thing. This is nothing new. It is marketing and corporate branding 101 and it does not matter most of the time.

The Organisation for Economic Cooperation and Development’s (OECD) Economic Survey of Australia, released on November 15, called for an increase in the rate and scope of the goods and services tax (GST) and a cut in business taxes. The rich countries’ economic club also called for higher road tolls, greater labour productivity and a price on carbon. The OECD’s annual survey congratulated the Labor government for avoiding recession during the global financial crisis but also demanded it undertake further “structural reforms to strengthen productivity”.
Prime Minister Julia Gillard knew just who she was talking to when she gave her address to the Australian Industry Group’s annual dinner on October 25. The AIG and its affiliates represent more than 60,000 bosses, according to its website. This includes Veolia, the privatisation juggernaut. But just so she didn’t rustle too many feathers, Gillard spoke to them in the kind of arcane riddles she hoped only they could understand.
After a month of thundering that a rise in the official interest rate was close, the Reserve Bank of Australia (RBA) has kept interest rates on hold at its monthly board meeting on October 5. Most financial commentators were betting on a rate rise of 0.25%, with banks expected to increase their mortgage rates by an even larger margin, despite their record profits, to account for higher costs of borrowing overseas. However, the dark financial clouds over Europe and the US appear to have put the kibosh on the financiers’ party.
In her speech to the National Press Club on July 15, Prime Minister Julia Gillard threw down the gauntlet to the labour movement. In a speech outlining the plans for a second-term Labor government, Gillard promised to run a regime of “reforms” that would entrench greater competition and privatisation. There should remain little doubt about Gillard’s intentions. Her speech was aimed directly at the wallets of big business.
It took the Rudd government some time to work out how best to exploit the final report of Australia’s Future Tax System Review, led by Treasury Secretary Ken Henry. Which of its 138 recommendations to implement straight away, which to reject, which to stick in the too-hard basket?
The Henry Review aims to develop the best possible tax-and-transfer policy for Australian big capital. But there are other proposals that would make up a tax-and-transfer policy for the working-class majority. The Rudd government has already ruled out action on 27 of the Henry review’s 138 recommendations.
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