You may remember a year or so ago, enormous pressure on the Australian government, by the Opposition, with the full support of a baying pack of reporters, to “get the budget into surplus”. Failure to do this, it was said, no matter the economic circumstances, would brand the government as hopeless economic managers, spendthrifts, in contrast to the wise money managers of the Liberal Party. A failure to slash everything in sight (but certainly not increase revenue, any hint of which, like a super profit tax on miners, being blocked by Opposition, and howled down by the Media). It was clear the campaign of denigration would carry on and on.
OK, said the government, you want a surplus, we’ll give you a surplus, somehow. If we are not permitted to tax the rich a little more then we need to slash programs, and, as economic conditions worsen overseas, slash some more. Outrage from Coalition, media, interest groups. How dare you cut this, that, the other program? What’s wrong with you? The Coalition never specified an actual program it would cut, merely said it would cut “waste”, and the media accepted this unquestioningly.
Meantime, as the damage austerity programs were doing elsewhere in world became more obvious, economists began saying to the government, hey, you don’t need a surplus, really, a surplus is surplus to requirements, take it easy, go for a reduced deficit by all means, but a “surplus” is not only meaningless but would be economically damaging. Immediately media joined in, yes, what are you aiming for a surplus for? Just a “political” move, not an economic one. Silly incompetent government chasing a surplus, what useless economic managers they are. But, a mere hint from the government that, yes indeed, surplus chasing was as irrational as UFO chasing, an instant chorus from media and Opposition, see, we knew you couldn’t get a surplus you hopeless economic managers.
Finally, faced with the inescapable reality of world economic doldrums, falling resource prices, and coalition premiers sacking thousands of workers, government says, you know, you are right, chasing a surplus was an albatross around our budget necks. All the economists agree, silly to go on with it. Maybe next year if things improve. Okay? Immediate baying for blood from Coalition and media. Broken promise. Bad economic managers. Hopeless government. Can’t even get a surplus. Throw them out.
And so it goes.