Joe Hockey blames government intervention for global financial crisis
The Australian, April 14, 2010
Article by Joe Kelly

JOE Hockey has blamed government intervention for the global financial crisis, while delivering a philosophical speech that laid out his belief in free-market enterprise.

The Opposition treasury spokesman also said Rudd government debt was pushing up interest rates and was the most significant challenge to private enterprise in Australia in coming decades.

Mr Hockey warned in his speech to the Eidos Institute in Brisbane that the accumulation of debt by government as a result of its fiscal stimulus would crowd out and weaken private sector activity.

Interest rates would be pushed up because of the extra competition on the capital markets.

“It's why I have been so resolute in my opposition to the reckless accumulation of debt by government,” he said.

“That debt is placing pressure interest rates domestically and internationally, making it more difficult for enterprise.

“I believe that sovereign debt will be the most significant inhibitor of enterprise over coming decades.”

Mr Hockey delivered a philosophical speech documenting the history of human enterprise ending with the challenge posed to it by the global financial crisis.

He railed against the options of running higher inflation or raising taxes to reduce debt burdens, arguing it would dampen the spirit of enterprise.

And he blamed the global financial crisis on government interference in the market, clashing with Kevin Rudd's belief that free market fundamentalism was at fault.

“A number of national leaders postulated that the financial crisis exposed fundamental failures in the free market system. I vehemently disagree with that view,” he said.

“I would argue that they key to the crisis was the market-interfering role that the United States government played in actively encouraging leaders to extend loans to people who were fundamentally unable to service their debts.”

Mr Hockey made clear, however, that he believed government did have an important role in managing the economy in protecting intellectual and real property rights and providing a legal framework to enforce contracts