Howard slams UK PM's economic bailout

Australia's former prime minister John Howard has warned British Prime Minister
Gordon Brown that running up large debts to stave off Britain's recession will lead
to a dose of "nasty medicine" for taxpayers.
Mr Howard, who has previously criticised the economic stimulus package put in place
for Australia by his successor Kevin Rudd, said spending billions now would only
cause problems for future generations.
"Medicine will have to be taken and it is a question of making sure that we don't
load all the bad nasty medicine onto future generations," Mr Howard told Britain's
Daily Telegraph newspaper on Tuesday.
"It is commonsense that if you get too deeply into debt the burden you put on future
generations is enormous."
The International Monetary Fund has estimated that Britain had spent about STG285
billion ($A621.12 billion), or nearly 20 per cent of GDP, supporting its struggling
financial sector by the end of February.
Much of the money has been spent on part-nationalising a handful of banks to prevent
their collapse.
Mr Brown has also reduced value-added tax on the sale of goods and services, a move
branded a "mistake" by French President Nicolas Sarkozy.
Mr Howard backed Sarkozy's criticism, saying governments should instead use specific
tax cuts to target the worst affected parts of the economy and make labour laws more
flexible.
"If people merely use the money to pay off existing debt, which any sensible person
would do, then all that does is transfer public savings to private hands which does
not necessarily have any economic benefit," Mr Howard told the newspaper.
"The most severe impact is for people who lose their jobs.
"Governments must provide incentives for employers to hold onto their workers.
"That means doing things in relation to employment taxes - anything that makes the
labour market more flexible.
"It is better for a maximum number of people to keep their jobs, albeit at a lower
rate or by working fewer hours.
"If there are work laws that make it more expensive to employ people I think it is
better to spend money on helping employers in relation to those things, than simply
to inject more into the economy."
In a speech last month, Mr Howard warned Mr Rudd risked repeating economic mistakes
made in the 1970s in Australia with his $42 billion spending package.
Mr Howard told the Telegraph that he was worried governments thought there was no
other alternative but running up massive deficits to deal with the financial crisis.
"There is a danger that governments generally will think that the solution is to go
ever deeper into debt," he told the newspaper.
"That troubles me because I don't think it is.
"My sense is that over the last month or six weeks the sense of restraint, how far
you go into debt, seems to have disappeared and that troubles me.
"There is a mood developing that it does not matter how much you are going into
debt. I am not sure that is a sensible thing."