You would have thought that our politicians might have reflected over the Christmas/New Year holiday period on just how much time they wasted last year on distractions, such as dual citizenship, same sex marriage, and the like, rather than on delivering good government, solving problems, dealing with the cost of living, and so on.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
Yet, here we are at the end of the first week of this year’s parliament, and the issue of dual citizenship still drifts on, while both sides began to position themselves for a possible federal election this year, in the context of three state elections, in South Australia and Tasmania in March, and Victoria in November.
Most voters don’t understand why the dual citizenship issue wasn’t dealt with as soon as it broke last July, with a simple accounting of all members, referring all those in doubt to the High Court, and if that resulted in a super Saturday of bi-elections, so be it.
However, what is a constitutional issue soon became a political issue, as all sides tried to score points and shift blame against the others, and so it has lingered on with several cases still unresolved.
Voters have become even more disenchanted with our politicians and our political system.
Both major parties have began setting the parameters of their election strategies, Turnbull focusing on tax cuts as a key to more “jobs and growth”, and Shorten trying to launch something of a “class war”, with enhanced roles for unions and some price controls. Although both identify cost of living as a key issue, neither has offered any deliverable, sustainable, solutions.
And then, on another planet, we have seen the extreme volatility in global stock markets this week, surely creating some doubt about the strength of the global economy in the medium-term, and suggesting that our political leaders should be taking somewhat greater account of the global economic risks, not to mention the considerable and unpredictable geo-political risks, in setting their political agendas and in making election promises.
The US stock market is overvalued, having been driven to new records on the back of the “effervescence” created by Trump, and in particular his tax cuts.
But, these tax cuts are unfunded, and so too will be his promised boost to infrastructure spending, at a time when the US budget deficit is already about 3.5 percent of GDP, US debt is already about 110 percent of GDP, and the US Federal Reserve is foreshadowing at least three increases in interest rates this year.
If the Fed proceeds down this path, at some point it will trigger a significant correction in the bond, and then stock, markets.
More broadly, it is not fully recognized that central banks have tripled their balance sheets relative to GDP since the GFC, basically flooding the world with liquidity, leaving them little capacity to respond to another global crisis, and little idea how to correct their balance sheets. Watch for the fallout!
Notice how quiet Trump became this week in the face of the stock market volatility, having endlessly claimed credit for the strength of the US market under his reign.
The big challenge for our political leaders in the run up to the next election is to recognize the precariousness of the global circumstances, and to offer an honest assessment of where we sit, and thereby what can be realistically “promised” by a “good government”.
