THE NATIONAL SHAME of a debt peak of $647bn within four years — confirmed by Treasurer Scott Morrison in this week’s Mid-Year Economic and Fiscal Outlook — proves, despite the mixed messages of the Abbott/Hockey era and the inconsequential blather about “fairness” from Labor, that drastic action is needed to stop Australia’s debt crisis becoming a permanent mire. Sacred cows, hitherto regarded as untouchable, must be carved up.
This morning’s post will be a relatively straightforward one, on the run today as I am; in any case, I’m sure the Mid-Year Economic and Fiscal Outlook (MYEFO) delivered by Treasurer Scott Morrison is something we will be discussing, directly and indirectly, at great length over the silly season and early next year, so it’s hardly a subject that needs to be knocked over in one go.
I have been reading David Crowe’s piece in The Australian this morning, and we’re looking at it and linking to it this morning because in my view, so rare are voices of common sense and sanity in the mainstream press where the true state of Australia’s books are concerned that when someone tries to communicate some insight and reality on a mass basis, those efforts should be amplified and reinforced.
It is an indictment that much of the delusional denial and opportunistic deceit the ALP has spent the entire time since its thumping election defeat two years ago is enthusiastically picked up and cheered on by not just the usual suspects at the ABC and Fairfax, but even some at the Murdoch press — slated viciously by Labor and its fellow travellers as some kind of de facto Coalition communications unit — but as MYEFO showed rather starkly, the warnings about a “debt and deficit disaster” and similar formulations that were routinely propagated by Tony Abbott and Joe Hockey were no joke, and no exaggeration.
Make no mistake, it is an indictment not just that Labor was able to spend (borrowed) money hand over fist whilst in office and to legislate tens of billions of dollars of new recurrent expenditure before it was thrown out, but it’s an almost criminal dereliction of responsibility that the Coalition — and the press community — have all but allowed the ALP to escape responsibility for its handiwork.
To be sure, the fairy story fashioned by Bill Shorten and his henchmen — that the ballooning mountain of Commonwealth debt is the fault and product of two years of Liberal governance — has taken root and been allowed to gain traction, and it is to be hoped that Morrison’s tepid effort this week is followed by a more concerted, robust endeavour to sheet the blame home to the ALP, where it belongs, and to till the ground of public opinion to make the tough remedial action that is urgently required acceptable, if not perhaps particularly palatable.
On this count, we will wait and see.
But the point I want to make today is that one sacred cow in particular — the National Disability Insurance Scheme — has hitherto been excluded from any attempt to rein in government spending, and given the relatively piecemeal measures the government announced this week are likely to be jumped all over anyway by a cynical but ruthlessly opportunistic opposition, Malcolm Turnbull and Scott Morrison might as well look at the gold-plated scheme that Julia Gillard and Wayne Swan sucked the Abbott-led Liberal Party into and take careful aim at sustainably scaling it back.
After all, Labor’s own figures suggest this behemoth will add $24bn to budget outgoings per year, every year, once it is fully operational after 2022: this sort of largesse might play well with those attuned to Labor’s smash-and-grab approach to the politics of big spending announcements, but it doesn’t augur well where responsibility, accountability and the efficient expenditure of public monies are concerned.
To date, no meaningful attempt has been made to revisit the NDIS, which in itself is a dereliction of responsibility: the only group anywhere in this country that believes the scheme is fully funded is the ALP.
Anyone who takes Labor Party pronouncements at face value where the expenditure of monies is concerned is, I am sorry to say, a mental case.
And in any case, the booby-trapped budget was an open secret before the ALP left office, so trusting it — and over a colossal sum of money every year, no less — requires the kind of leap of faith that motivates lemmings to jump off cliffs.
In other words, $24bn annually might even be a conservative figure.
There will no doubt be those who think I am heartless for putting the NDIS on the table in the context of budget cuts; as this column repeatedly noted at the time, it’s not the soundness of the concept I question, but the cost — and whether it can be justified.
Labor pilloried Tony Abbott’s own “rolled gold” scheme — universal maternity leave pay — and created so much grief for the Liberals that Abbott was forced first to water it down, and then abandon it altogether.
But the NDIS is off limits. Even just the fact it seems to be “untouchable” is a cause for unease given the vast sums of money in question.
I don”t advocate abolishing the NDIS, although I will reiterate the point that such a grandiose package wasn’t affordable when Gillard and Swan cooked it up, and is even less affordable now.
Yet with the annual budget deficit now effectively running at $40bn per year (and seemingly set to stay there for some years) surely some efficiencies might be squeezed from the NDIS?
Surely some of the gilt edges and gold plating could be prised away without compromising the core objectives of the scheme?
And having pilloried Abbott’s “gold-plated” maternity leave scheme (which in any case was fully funded by a levy on businesses, the merits of that put aside for now) to the point it was dumped, the only discernible argument for the NDIS to be quarantined from savings seems to be that Labor set it up rather than the Liberals.
Oh, and that the Liberals allowed themselves to get sucked into the trap, which — empty blather and bullshit about “compassion” aside — was a very big part of the game Gillard and Swan were playing.
We will, as I said, talk a great deal more about the budget in the coming days and weeks, but the point is that unaffordable adventures — irrespective of how worthy — are a luxury this country simply can’t afford as it haemorrhages red ink as far as the eye can see.
Surely some kind of paring back of the NDIS — either through direct cuts or a savage focus on efficiencies (not creating as many richly remunerated, Labor-aligned public servants to administer it, for example) could leave a scheme that still consumes $12-$15 billion per year, but also tips the better part of $10bn per annum — or a quarter of the entire budget deficit — back onto the books in one fell swoop.
Fixing the problem of the deficit and the mountain of debt that is accruing will take time. There are no easy options. Nobody likes having their cut of government largesse reduced or eliminated. Yet unless some tough action is taken now, in not much more than another decade, Australia will be as good as bankrupt.
I just wonder, with his mangled rhetoric about “fairness” and the utter shamelessness with which he helped create this problem as a minister in the last Labor government, what Bill Shorten might say by way of atonement to the Australian public if that nightmare scenario should ever come to pass.
The answer, of course, is nothing, for Shorten and his cronies will be long gone.
Such is the opportunity cost for unprincipled wreckers who would mortgage this country’s future for their own political benefit, then skip off into the sunset leaving someone else to carry the can — and yet, reprehensibly, refuse to allow them to fix the problem they had themselves created in the first place.