By Peter Switzer

My Sky News colleague David Speers wrote a great piece last Friday on this website on the Abbott Government’s worst week in office. He thinks a ministerial reshuffle will happen in the New Year to rip the barnacles off the ship of state.

While I think some personnel need to be shown the backbench, some policies and policy rhetoric also needs to be de-barnacled!

The big problem for the Abbott Government is that it’s listening to the wrong people when it comes to its economic policy. They are the same mob that advised Labor and they make the same dumb mistakes.

I don’t want to name names but in a nutshell it’s Treasury. These guys are economists and also public servants so you can’t realistically expect them to be risk-takers.

They have inherited a new Abbott Government, which has been promising economic responsibility — cut the annual budget deficit, turn it into a surplus and start cutting down the public debt. Treasury would have explained to Treasurer Joe Hockey how it could be done over a five- and 10-year period and the end-result was a pile of policies that featured in the Budget speech on the second Tuesday in May.

Changes to uni fees, dole payments, a stingy pay rise for the Australian Defence Force (ADF) and GP co-payments have not only been rejected by the Senate, these policies explain why the Abbott Government trails Bill Shorten’s Labor by 10 points on the two-party preferred basis!

The simple summary is: Joe Hockey went for a tough Budget and it failed to get up but it spooked consumers big time – and business a bit – and it hasn’t helped economic growth.  The Budget deficit could blow out for two reasons. First, Labor and the PUPs have frustrated the Treasury plan and second, the slower economy that has brought a 6.2% unemployment number has hurt the deficit because tax collections have fallen and the unemployed have received more dole payments.

That’s a cock up. I always argued that Joe should have gone for a soft Budget first to get growth happening and then he should have started to reduce spending when the private sector was confident with both consumers and business spending.

Instead, Joe and Tony have listened to Treasury and right-wing idealogues, who write in newspapers and are economic nincompoops.
Australia has been used by the likes of the US, which took its currency down to get growth happening, and it has worked for them. On the other side of the coin, we copped a higher dollar, which hurt our competitiveness.

It’s time we had a lower dollar and if the government opted to delay its deficit/debt destruction goal, it would actually take our currency down a few cents. I’m talking about one step back to take two steps forward.

This week we get a load of economic data both here and in the US. The one I want to see is Wednesday’s economic growth number and even though it’s an old number harking back to the September quarter, it could move the market. We also will see house prices, building approvals and retail trade, which will tell us more about what’s going on now.

I’m sure the PM will cancel some minister’s tickets but Joe, Mathias Cormann and Tony himself need to change their policies to get growth happening. If they don’t, the economy will stagnate and their popularity will keep slipping.

Julia Gillard found it is hard to be forgiven when she lied to voters and Tony is finding the same thing but I reckon you can get away with it if the economy is zinging. We need to see some zinger policies.
As Bill Clinton said and I’ve said it a few times lately myself on this website: “It’s the economy, stupid.”

Will someone make sure Joe, Mathias and Tony get this message?