Today is opening the books day when all the parties get to see how much is in the piggy bank to spend on election promise. The general consensus is that the latest round of tax cuts and a recession means that Dr Cullen might have left the piggy bank empty for the next government. That raises two significant issues. The first is that most parties are going to start talking about greater or lesser degrees of borrowing (especially those with $50 a week tax cuts still to be accounted for). It’s not necessarily a bad thing to be taking on debt in tight times and repaying it in good times. But its fairly integral that that debt is going towards useful assets and infrastructure that has some value to the community.
The second issue is that looking in the books is useful to know what you have got but you also need to have a peak at what you are likely to have in the future to make wise economic decisions. We know that the central economic challenges we will face in the next decade are the rising price of oil and all things that rely on oil (such as industrialised food), and our response to climate change. Investing in long term assets that reduce our dependence on oil and protect our healthy climate will give us strong economic opportunities. Continuing with more of the same won’t.
I’m expecting the account book opening today to be yet another signal that the economic choices we need to be making in the next three years are about warm dry homes, integrated affordable public transport, clean renewable energy and support for local communities, workers and businesses.