5 February 2025
Vol. 27 No. 4

Peter Dutton’s austerity prescription won’t help Australia. Only a public bank will. Photo: Screenshot

On ABC’s Insiders on 2 February alternative Prime Minister Peter Dutton promised he would cut “wasteful spending”, suggesting an expenditure review committee but refusing to clarify what he would cut ahead of the election. Heralding leaner times, he promised to cut the “fat” out of the system.

The public service in his sights, Dutton pointed to some 36,000 public roles created by the Albanese government. Commenting on Insiders was journalist Laura Tingle, who slammed the use of “consultants”—most of which have been thoroughly discredited, namely the Big Four accounting firms—as a way of taking public servants “off the books”. It is presented as saving money but reverting to the public service, she noted, has proved cheaper. (Tingle wrote an insightful 2015 Quarterly Essay titled “Political Amnesia: How we forgot how to govern”; see AAS 6 Sept. 2023).

A June 2024 Australian article reported that Liberal MPs pushed Dutton to promote “a David Cameron-inspired austerity program to slash ballooning structural deficits”. MP Garth Hamilton (Groom, Qld), who praised UK PM David Cameron’s post-2008 spending reductions—he was living in the UK at the time—noted that cutting government spending “isn’t just a partisan position”, citing the Hawke and Keating governments. MP for Bowman (Qld) Henry Pike added, “We need to re-look at the thought that having a bit of austerity or cutting back on government services or waste are unpopular.”

Coalition finance spokesperson, better known as the Senator for Bankers, Jane Hume, this month praised the Coalition focus on “improving government efficiency”, repeating the neoliberal theories that wrecked our economy, notably that only a “private sector led recovery” can lead to sustainable growth. These policies are 100 per cent discredited and the reason Australia has gone from being an “economic poster child” with (supposedly) 33 years of economic growth, to an “economic problem child”, according to a December 2024 McKinsey report that called declining living standards a “national emergency”.

In 2009 David Cameron had called for “the age of austerity”, demanding “incredibly tough decisions on taxation, spending, borrowing—things that really affect people’s lives”. In 2011 US President Barack Obama announced a five-year spending freeze which, he levelled, “will require painful cuts”. Did all that pain imposed on people work? No! Decades of intermittent money-pumping followed by belt-tightening has not improved the prospects of citizens anywhere in the world, it has only caused a massive transfer of wealth to the political and financial elite who devised the policies—to save the existing, failed system.

The alternative is to deploy the postal bank solution to revive the economy. The Albanese government is proposing to save cash by mandating its acceptance while refusing to crack down on banks closing branches. Overseas, governments and central banks are pushing radical interventions to rescue cash as a vital payment option in perilous times (p. 6), while our government and central bank do nothing.

Now, cash distribution itself has hit another hurdle. Not only is it in jeopardy due to the troubles at Armaguard, but Westpac which jointly operates the cash distribution system with the transporter, refuses to renew its contract which expires 18 July, because it is not profitable. Without a new contractor, reported AFR on 3 February, “the movement of cash to all businesses, bank branches and ATMs could grind to a halt.” A reluctant RBA “may be forced to step in”.

The government could solve this problem and more in one fell swoop: Instruct Australia Post, which has the power within its legislation, to commence operations as a government postal bank. Not only would cash delivery be a walk in the park, Australians would be able to access proper banking services at over 4,000 locations. Regional communities would be revived. The private banking sector’s control over politics and with it, the bipartisan economic consensus, would wither.

In this week’s issue:

• 73 post offices gone in 2024! When will Albanese save postal and banking services with a post office bank?
• RBA covers for bank negligence on cash
• Relentless ‘CCP’ watcher’s love for censorship
• What Australia must learn from Europe’s cash comeback
• Wong and Albanese are lying: Oscar Jenkins is not a ‘prisoner of war’
• Neocons revive ‘Clean Break’ scheme for war on Iran
• New leadership for an awakening population
• China’s ‘artificial Sun’ sets record on way to the fusion revolution

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