{"id":8125,"date":"2016-03-14T17:33:53","date_gmt":"2016-03-14T17:33:53","guid":{"rendered":"http:\/\/unitelive.org\/?p=8125"},"modified":"2016-03-15T17:11:57","modified_gmt":"2016-03-15T17:11:57","slug":"austerity-its-not-working","status":"publish","type":"post","link":"https:\/\/unitelive.test.igniteamt.com\/?p=8125","title":{"rendered":"Austerity: it\u00e2\u20ac\u2122s not working"},"content":{"rendered":"
<\/div>\n

In 2010, Chancellor George Osborne first laid out one of the central aims of the then coalition government in his first budget \u00e2\u20ac\u201c to eliminate the deficit by 2015.<\/p>\n

 
\nHaving failed to meet previous targets, he\u00e2\u20ac\u2122s often revised them, with the latest promise to achieve a budget surplus by 2020.<\/p>\n

 
\nBut on the eve of the Chancellor\u00e2\u20ac\u2122s eighth budget to be delivered on Wednesday (March 16), it turns out that yet again, his targets will be missed.<\/p>\n

 
\nThe deficit, which is the difference between government revenues and expenditure, stands at \u00c2\u014174.2bn for the year in January, nearly \u00c2\u01415bn more than the Office for Budget Responsibility\u00e2\u20ac\u2122s (OBR) target of \u00c2\u014168.9bn.<\/p>\n

 
\nThe OBR said that looking at the current rate of overspend, the government is on track to exceed its full year borrowing target by \u00c2\u01419bn.<\/p>\n

 
\nBack in 2010, Osborne said that reducing the deficit could only be achieved through austerity.<\/p>\n

 
\n\u00e2\u20ac\u015bThe coalition government believes that the bulk of the reduction [in the structural deficit] must come from lower spending rather than higher taxes,\u00e2\u20ac\u0165 he said in his June 2010 budget statement. \u00e2\u20ac\u015bThe country has overspent; it has not been under-taxed.\u00e2\u20ac\u0165<\/p>\n

 
\nMade things worse<\/strong><\/em>
\nBut nearly six years on, the government\u00e2\u20ac\u2122s solution to tackling the deficit through austerity has only made things worse.<\/p>\n

 
\nIt has lead both the OECD<\/a> and the IMF<\/a> \u00e2\u20ac\u201c both once proponents of austerity \u00e2\u20ac\u201c to warn earlier this year that governments must let up on their obsession with reducing deficits through spending cuts if they want their economies to grow.<\/p>\n

 
\nThey both called for more public investment.<\/p>\n

 
\n\u00e2\u20ac\u015bMany countries have room for fiscal expansion to strengthen demand,\u00e2\u20ac\u0165 the OECD noted in February. \u00e2\u20ac\u015bThis should focus on policies with strong short-run benefits and that also contribute to long-term growth.<\/p>\n

 
\n\u00e2\u20ac\u015bA commitment to raising public investment collectively would boost demand while remaining on a fiscally sustainable path.\u00e2\u20ac\u0165<\/p>\n

 
\nOsborne had once relied on a much stronger economy to achieve his deficit reduction targets \u00e2\u20ac\u201c better wages would mean higher tax receipts from income tax and national insurance.<\/p>\n

 
\nThe OBR had optimistically forecast \u00c2\u014127bn in extra money from tax receipts after it had predicted a rosy economic outlook only three months ago.<\/p>\n

 
\nBut it has since revised its forecasts, highlighting now that the economy is more than 1 per cent smaller than it predicted, largely due to lower than expected earnings and inflation falling to zero.<\/p>\n

 
\nThis means that the government now actually faces a staggering \u00c2\u014118bn black hole \u00e2\u20ac\u201c one that the chancellor is expected to make up for with even more austerity cuts.<\/p>\n

 
\nSpeaking on the BBC\u00e2\u20ac\u2122s Andrew Marr Show yesterday (March 14), Osborne said the government would need to find \u00e2\u20ac\u015bsavings equivalent to 50p for every \u00c2\u0141100 the government spends.\u00e2\u20ac\u0165<\/p>\n

 
\nBut economic forecasting group EY ITEM Club joined the OECD and IMF today<\/a> (March 14) in warning against further austerity cuts.<\/p>\n

 
\n“You could argue the low-hanging fruit – the easy cuts – have already been made and cutting further is actually going to be pretty tricky,” EY ITEM club senior advisor Martin Beck told the BBC.<\/p>\n

 
\nBoost economy call<\/strong> <\/em><\/p>\n

\u00e2\u20ac\u015bThe government should instead focus on boosting the economy, particularly amid market turbulence and a slowdown in global economic growth.<\/p>\n

 
\n“That’s what’s caused us to think maybe the Chancellor should be careful here and not potentially make a weak economic situation weaker,” he added.<\/p>\n

 
\nTUC general secretary Frances O\u00e2\u20ac\u2122Grady agreed.<\/p>\n

 
\n\u00e2\u20ac\u015bGeorge Osborne has missed target after target on growth, wages and the deficit,\u00e2\u20ac\u0165 she said. \u00e2\u20ac\u015bWe need a better plan for long-term growth that has investment in infrastructure, skills and decent jobs at the heart of it.<\/p>\n

 
\n\u00e2\u20ac\u015bWe cannot afford another round of cuts, which are making public services worse without making the economy or the public finances better.<\/p>\n

 
\n\u00e2\u20ac\u015bThe Chancellor may have begun paying lip service to the importance of supporting industry, but he\u00e2\u20ac\u2122s delivered little more than a rag-tag of pre-existing policies bundled together,\u00e2\u20ac\u0165 O\u00e2\u20ac\u2122Grady added.<\/p>\n

 
\n\u00e2\u20ac\u015bWithout a better-balanced economy and a proper industrial policy, vital industries will continue to decline and millions of families will face an uncertain future.\u00e2\u20ac\u0165<\/p>\n

 
\nUnite assistant general secretary Steve Turner echoed the call to give up on austerity and instead focus on investment.<\/p>\n

 
\n\u00e2\u20ac\u015bAusterity didn\u00e2\u20ac\u2122t work in the previous parliament and it hasn\u00e2\u20ac\u2122t worked in this one,\u00e2\u20ac\u0165 he said. \u00e2\u20ac\u015bEven on the government\u00e2\u20ac\u2122s own terms, austerity has been failure \u00e2\u20ac\u201c it has done nothing to improve the public\u00e2\u20ac\u2122s finances. At the same time, millions of people have suffered.<\/p>\n

 
\n\u00e2\u20ac\u015bHow many times must the government repeat the same mistakes \u00e2\u20ac\u201c with all but the wealthiest being asked to pay the price \u00e2\u20ac\u201c before it tries a different solution for growth, one that renowned economists the world over have prescribed time and again?\u00e2\u20ac\u0165<\/p>\n

 
\n\u00e2\u20ac\u015bPublic investment in infrastructure and a sound long-term industrial strategy is what will prime demand and so spur economic growth,\u00e2\u20ac\u0165 he added. \u00e2\u20ac\u015bCreating a high-wage, high skill economy is within our grasp \u00e2\u20ac\u201c the only obstacle in our way is an ideological obsession with the idea that austerity works.\u00e2\u20ac\u0165<\/p>\n

 <\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

In 2010, Chancellor George Osborne first laid out one of the central aims of the then coalition government in his first budget \u00e2\u20ac\u201c to eliminate the deficit by 2015.   Having failed to meet previous targets, he\u00e2\u20ac\u2122s often revised them, with the latest promise to achieve a budget surplus by 2020.   But on the […]<\/p>\n","protected":false},"author":1,"featured_media":912,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[17],"tags":[498],"wps_subtitle":"Economists tell Osborne investment not cuts","_links":{"self":[{"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=\/wp\/v2\/posts\/8125"}],"collection":[{"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=8125"}],"version-history":[{"count":1,"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=\/wp\/v2\/posts\/8125\/revisions"}],"predecessor-version":[{"id":8126,"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=\/wp\/v2\/posts\/8125\/revisions\/8126"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=\/wp\/v2\/media\/912"}],"wp:attachment":[{"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=8125"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=8125"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=8125"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}