Prime Minister Scott Morrison and Treasurer Josh Frydenberg have had a panic attack over the collapse of credit growth in the Australian economy. Their solution however, to lower bank lending standards to encourage banks to make more loans, will be a disaster, and knowingly so as the disasters that led to the banking royal commission proved.
Australia is in a dire economic emergency, which must be tackled with the same urgency as the COVID-19 pandemic. Australians should call on their politicians to support Bob Katter’s plan to turn the Clean Energy Finance Corporation (CEFC) into an emergency national investment bank that can immediately direct credit into nation-building and job-creating economic development.
Australia is borrowing and spending more than $300 billion to put the economy on life support for six months or more. Instead, we should recapitalise and repurpose the Clean Energy Finance Corporation (CEFC) to invest in the industries and infrastructure needed to combat the epidemic and put the economy on a more productive footing going forward.
The next global financial crisis is well and truly under way, but don’t let the culprits get away with just blaming the coronavirus!
When a virus can smash your financial system, it’s time to throw out your economic delusions and face up to the fact that the problem is the financial system.
Yes, the pandemic is very serious, but all it has done is show up how unproductive and unprepared our and many other economies are.
After then-Treasurer Scott Morrison announced the $10,000 cash ban in the 2018 budget, his successor Josh Frydenberg estimated to Parliament that the government’s “black economy” interventions, of which the cash ban is one, would bring in an additional $5.3 billion in revenue over four years—tempting, to a government desperate to balance the budget.
