Australia is on a road to economic ruin unless politicians can act in national interest, business groups warn

With the Reserve Bank considering another interest rate cut today as a result of collapsing iron ore prices and fears the economy was stalling, the country’s largest employer groups have issued an extraordinary joint statement demanding all sides of politics start acting in the national interest.Warning that Australians’ standard of living was in jeopardy because of a lack of political courage to engage in reform, the statement petitioned all sides of politics to govern in the tradition of the “reform giants” — Hawke/Keating and Howard/Costello.

Taking aim at the Abbott government for signalling it would pull back from further reform in the May budget, the group of nine also criticised Labor for focusing solely on “budget fairness” and cited past senates as contributing to Australia’s economic welfare, rather than wilfully damaging it.

Rather than continue to focus on spending cuts — more than $20 billion of which Labor and the senate continue to block — Treasurer Joe Hockey is signalling regressive measures such as tax hikes to balance the budget, including cutting tax concessions for superannuation.

“With the Prime Minister signalling a ‘dull’ budget and the Opposition Leader continuing to focus almost exclusively on budget ‘fairness’ you could be mistaken for thinking there is no significant problem with the state of the nation’s finances,” the statement said.

It’s a comforting thought that growth is somehow automatic and that year in, year out, despite our many challenges we will continue to improve our lot.

“The reality of where prosperity comes from, however, is much more sobering and if neglected will set us on a path to economic despair.“

The joint statement was authored by business groups including the Australian Chamber of Commerce & Industry, Australian Food & Grocery Council, Australian Industry Group, Australian Pipeline Industry Association, Business Council of Australia, Minerals Council of Australia, National Farmers Federation, Property Council of Australia and Restaurant & Catering Australia.

They represent the largest employers in the country and the bulk of Australia’s economic and industrial activity.

“There is no escaping that reform is hard and often unpopular in the short-term, but Australians are vastly better off for the actions of a previous generation of leaders,” the joint statement said.

“ ... Our message to today’s leaders is simple: governing is not just the responsibility of government, it is the duty of all members of parliament, and we must stand on the shoulders of reform giants ­before it is too late.”

The group cited the fiscal disaster facing the government — spiralling debt and deficits — as even more reason for parliament to act.

Source : The Daily Telegraph    Simon Bensen    April 7th 2015