Financial warnings point to Australia’s economic and political instability
12 January 2019
Two warnings by global financial firms about the precarious state of the Australian economy in the face of the US-China trade war and global financial turmoil have underscored the ruling elite’s deepening economic and political predicaments.
This week’s reports, one by the Fitch ratings company and the other by Morgan Stanley, the American multinational investment bank, raise the spectre of a financial crisis that would blow up the pre-election claims of both the Liberal-National Coalition government and the Labor Party opposition.
They also point to the possibility of Prime Minister Scott Morrison, who was installed via a backroom Liberal Party coup in August, calling a snap election to try to scrape back into office before the economic storm fully hits.
Last November, with the government wracked by electoral defeats and ongoing factional warfare, Morrison sought to hold it together for a few more months. He announced that Treasurer Josh Frydenberg would produce an early “surplus” budget in April, effectively paving the way for a federal election in May, which is the latest possible month.
However, this week’s reports expose the unreal assumptions behind the government’s claim to be ready to produce the first budget surplus since the 2008 global financial breakdown. They also indicate deep concerns in the ruling capitalist class that a sharp deterioration in economic conditions will intensify the discontent in the working class over decades of worsening social inequality and declining living standards, particularly since the last global crash in 2008.
According to Fitch, a slowdown in the world economy will cut anticipated government revenues, stopping…