Recession: Rudd's year of denial

The media, including The Australian Financial Review, were keen to ventilate material yesterday from the Prime Minister's office that Kevin Rudd had finally managed to acknowledge that Australia is in recession.

Actually, as early as March 21 Rudd told Channel 9:  "It's clear that the impact of a worsening economic global recession will make it virtually impossible for Australia to sustain positive economic growth for the period ahead."

This followed a year of denial by the Prime Minister and his dissipation of $80 billion of Australia's savings in various giveaways and guarantees to stave off recession.

Indeed, as recently as early February on the ABC's 7.30 Report, Rudd proclaimed, "What I refuse to do is to haul up the white flag and say, as the Liberal Party have done, that recession is inevitable."  And he pointed to apparent pre-Christmas sales buoyancy, saying this is, "real data as opposed to the theoretical projections" of his detractors.

This record of mis-analysis and wasteful expenditures confirms the incompetence of the country's leadership.

Mounting deficits and endless guarantees of failing businesses, in attempting to divert savings into consumption, are cannibalising savings and denying funding to the investment opportunities necessary to bring recovery.  Present policies will exacerbate the economic distress that the global downturn makes unavoidable.

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