Politics to the front pages with the
elevation (?) of Senator Hill to US Ambassador. Expect much discussion on this
one while the great complacency continues.

As economic policy makers return
from their holidays, they will be experiencing deja vu all over
again.

In-trays are still full, if not
fuller, and in-boxes are certainly fuller, and not just of spam. When they get
to the data, they will be finding economic growth below par, inflation still at
the top of the government’s target range and the current account deficit also
uncomfortably large.

Worse, mining investment projects
are being cancelled because of cost over runs. The ungrateful business people
have already forgotten the bonanza meant to come from labour market
deregulation. Is there no justice?

Why is this so? their ministers
should be asking. Ministers probably saw the advertising they had paid for
saying that the Australian economy is the most resilient in the world. Doesn’t
that mean it is meant to be growing more quickly, with inflation and the current
account deficit falling?

The smoke you see as you near
Canberra may not
be not bushfires this year, thankfully. It may conceivably be economic policy
makers beginning to think that most awful thought, that the great complacency
will have to be ditched and drastic policy action will be necessary to make a
difference.

Read on at Henry
Thornton.