The leaders’ debate didn’t cover the real economic issues: Gottliebsen

I was disappointed by the Gillard-Abbott debate. The agenda was set by the journalists who missed some of the really big issues that we face over the next three years.

A clear missed issue is the looming escalation in costs for those who own homes. As I explained in my comment on the Warwick McKibbin KGB TV interview, we face very big rises in power costs. If Julia Gillard wins, we will have a carbon tax which, unless crafted correctly, will lift household power costs even further.

Then with major desalination plants in NSW, Victoria, South Australia and WA, plus a small one in Queensland, we are also looking at big rises in the cost of water.

And leaving aside any action the Reserve Bank may take to counter inflation with higher interest rates, we are going to see further rises in the cost of overseas wholesale funding by banks, which fund around 40% of Australian bank lending.

The combination of these events will put a squeeze on Australian retail spending and will be the major force keeping down grocery prices – a question neither leader could answer.

The Fair Work legislation is going to lift the cost of employing labour, particularly by small enterprises that are working on weekends and at night. It will keep the upward pressure on official Australian interest rates. And small enterprises face the nightmare of the unfair dismissal legislation. Tony Abbott has let them down in this area.

But leaving aside unfair dismissal, Tony Abbott has an excellent set of small business polices which includes maintaining the rights of independent contractors and the extension of unfair contracts legislation into small enterprise.

I found it hard to believe that Tony Abbott could not find the time in his answers or summing up to extol the virtues of these coalition policies.

It was a counter to the well-made point of Julia Gillard’s that Tony Abbott plans to lift company tax for large corporations, whereas she plans to reduce company tax.

And Julia Gillard’s promises to restore the budget to surplus are dependent on another round of big prices rises in iron ore and coal. Of course she might be right but I have serious doubts that it is going to happen. We are punting the resources market envelope once again and I don’t think world growth will be strong enough for another big round of the iron ore/coal price boom in the next few years.

Finally, I hope we never again have a leaders’ debate about the future of Australia without any mention of China.

This article first appeared on Business Spectator.