REPORT BLAMES “DEMAND RECESSION” ON GOVERNMENT

Posted on 27. Mar, 2013 in News

The Napthine Government mismanagement of the Victorian economy has been laid bare for all to see in a scathing report by Westpac Bank, Shadow Treasurer Tim Pallas said today.

Mr Pallas said the Westpac report “Coast to Coast: March 2013” confirmed what the State Opposition has been saying repeatedly, that the State Government’s negativity and austerity has played a major role in Victoria’s “demand recession”.

The report said the State economy has “weakness across multiple fronts and a pronounced drag from the public sector”.

Mr Pallas said the Napthine Government’s economic culpability was specifically identified in the report, which said “the public sector has been the main swing factor in Victoria’s underperformance”.

Mr Pallas said the report identified a 10% contraction in demand in 2012 and “the biggest 6 month contraction since the early 1990s recession, which was a particularly harrowing experience for Victoria. The most spectacular decline was in public investment though … our estimates suggest underlying ‘new’ public investment collapsed by 60-70 per cent over 2012H2”.

“The Opposition again calls upon the State Government to finally produce an infrastructure pipeline of small, medium and long term projects that are credible and commence their delivery as a matter of economic necessity,” Mr Pallas said.

“The Napthine Government’s sloth and blame shifting has cost Victorians jobs and our economy substantial opportunities.

“Treasurer Michael O’Brien continues to parrot his predecessor’s line – ‘recession? What recession?’, showing no inclination to change the government’s economic priorities away from austerity to growth.

“In doing so he is a doppelganger for his predecessor Kim Wells. It appears that while the Treasurer’s name has changed, nothing else has.

“The politics of denial and deflection of blame have cost this state dearly, as the Westpac report concludes: ‘fiscal austerity and the end of a major round of public investment has effectively taken over 2ppts off demand’.

“You can’t put it more bluntly than that and the Napthine Government’s economic settings are directly responsible for the State of Victoria’s malaise.”

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