MYEFO: Labor Must Pull Its Head In – And Get Out Of The Way

TREASURER Scott Morrison’s Mid-Year Economic and Fiscal Outlook shows falling revenues and rising debt, but Australia will keep its AAA credit rating despite recession risks; the Coalition may be too tactically inept to hold the ALP to account for damage it caused in office and now perpetuates through Senate obstruction, but unless its aim is to win power in Australia by first wrecking it, Labor must pull its head in, and let the government govern.

The Mid-Year Economic and Fiscal Outlook (MYEFO) released by Treasurer Scott Morrison today (and you can read some of the coverage of it here and here)  paints a slightly rosier picture than many observers (myself included) might have expected; despite falling revenues and increases in both deficits over the next four years and overall government debt, Morrison’s projections nonetheless show the budget remaining on track for a return to surplus in four years’ time.

They have also elicited firm indications from all three of the international economic ratings agencies that Australia remains in a sound enough position to retain its prized AAA credit rating, and to be completely blunt, this news will devastate Labor types, who have spent three years talking Australia down and virtually daring ratings agencies to downgrade its investment rating, in a perverse approach to chasing cheap political gain through national misfortune.

In this sense, today’s announcement is a wake up call to the Labor Party under the charlatan Bill Shorten, which flatly refuses to permit the Coalition to fix the damage the Rudd/Gillard government inflicted on the national finances in office through its obstructive marshalling of anti-government forces in the Senate. More on that later.

But whilst the proof will be in the pudding with MYEFO — as is usually the way with these things — Morrison’s announcement, despite the histrionics and hysterics of shadow Treasurer Chris Bowen, is little more than a minor tweak on the figures presented at budget time. Barring anything unforeseen, or a second consecutive quarter of negative growth in February confirming a recession, there is very little that is exceptional in today’s announcement.

Government spending falls slightly, from 25.8% of GDP to 25.2%, as do both employment growth and GDP growth; Morrison is forecasting that no recession will hit Australia which — given the 0.5% contraction for the September quarter was at the upper end of expectations — might yet prove rather heroic.

Nett debt is forecast to peak in 2020-21 at $364bn, which in raw terms equates to gross debt of more than half a trillion dollars; in historic terms, this is a national embarrassment, for in my view it doesn’t matter how well able to service debt the country might be, borrowing to fund recurrent government spending is the wrong kind of debt altogether, and produces no lasting economic benefit whatsoever.

In short, the country should be living within its means. It still isn’t.

And the $1bn+ that will continue to be shelled out every month, in perpetuity, to service that debt would pay for an awful lot of schools, and roads, and hospitals, and dams, and railways if it wasn’t going to line the pockets of international financiers: a fact seemingly lost on Labor, which seems hellbent on stopping the Coalition from balancing the budget through Senate shenanigans for as long as it is physically able to do so.

But the real story here, yet again, is that three years after the Coalition took office with an explicit mandate to fix the federal budget, Labor — in cahoots with its favourite whore, the Communist Party Greens, and other undesirables in the Senate — apparently remains on a mission to prevent precisely that, using various fatuous semantic formulations (such as “fairness” and “cruelty”) to justify its brazen actions in allowing the budget to still be haemorrhaging red ink.

Make no mistake: the Global Financial Crisis is over, and whilst nobody blames Labor for the GFC (even if its response to it was overcooked), the only reason the Coalition has been unable to deliver a surplus budget by now, or to start paying back government debt, is that the insidious Shorten simply refuses to permit it to occur.

To be clear, the Coalition has deeply entrenched shortcomings that don’t help; the woeful inability to sell anything or to frame a convincing narrative for mass public consumption is one of them. The utter inability to pin Labor’s economic vandalism squarely on Shorten, and force him to carry the can for his actions, is another.

But Labor seems content to try to destroy the economy from opposition in is mad lust for power at any price, and whilst that might sound harsh, it’s the only logical conclusion to draw from its behaviour in the Senate. The ALP is prepared to wreck Australia for the criminally petty reason a majority of its people had the temerity to vote it out of office.

The exceedingly low level of regard in which most Australians hold politicians of all partisan hues is increasingly well deserved, and is starkly illustrated by the fact that at the election held on 2 July, almost a quarter of voters cast a ballot for candidates other than the major parties in the lower house. In the Senate, the figure was 35%.

Quite aside from ALP recalcitrance in the Senate — the masquerade of “principle” that is really a fulsome expression of contempt for Australia’s national interest and the betterment of the people who live in it — there are all sorts of other things Labor has done, now and in the past, that feed into the numbers Morrison has released today.

The “booby-trapping” of the federal budget, for instance: a reprehensible scheme cooked up on Julia Gillard’s watch as Prime Minister to load the federal budget up with so much new recurrent spending as to render the budget unmanageable, and that wouldn’t appear on the books until Labor was safely out of office and able to cast indignantly righteous stones at the Liberal Party.

Or the final year of the so-called Gonski education money, which was set to exponentially inflate the Commonwealth’s obligations to the states and which was (rightly) abandoned by the Coalition under Tony Abbott.

Or — with an eye on economic growth figures that are now decidedly treacle-sluggish — the Fair Work regime instituted by Gillard, in payback to the unions for bankrolling the anti-WorkChoices campaign that swept Labor to power in 2007, which has introduced rigidity and inflexibility into the labour market that is now flowing through to tepid employment growth and diminished returns from the small business sector.

And all of this is before we even get to the blatant Labor lies about Medicare being privatised, which would be the most disgusting campaign tactic ever pursued in Australia were it not for other Labor schemes (such as sending fake firefighters to polling booths, and calls from “nurses” to scare hell out of people) to rival it.

It’s little wonder people have nothing particularly nice to say about politicians when this kind of thing is symbolic of their best performance: and whilst the blame in this case lies at Labor’s door, the average voter simply dismisses both sides with a “pox on both your houses” mentality — and is increasingly turning away from the major parties as a consequence.

If Labor truly believes it is a force for responsible government, it has a very big opportunity now to prove it.

If the Liberal Party and its prescriptions are wrong, they will be seen to be wrong, and aggrieved voters will have another opportunity to vote them out of office at an election that could be no more than 18 months to two years away, courtesy of the double dissolution that was held in July. It isn’t as if Labor has to wait for decades for another shot at the title.

But if there is to be a clean fight, and the Liberal Party made to account for what the ALP blathers is “unfair” or “cruel” or whatever other diarrhoea Shorten cares to verbalise, Labor has to get out of the way — and allow the Coalition’s budget repair measures to pass the Senate.

Average voters, in contrast to the way Labor treats them, aren’t stupid: they are capable of making their own judgements and their own decisions, and they should be able to make decisions based on how a particular program works once implemented rather than on the basis of distorted and hysterical screeching about what might happen if the ALP wasn’t there to stop it.

And if Labor isn’t prepared to do that — to let the government pass its budget measures in full — then perhaps we are having the wrong conversation altogether; maybe we ought to be talking about how to reform the Senate in a way governments are able to actually govern once and for all.

Or if that simply proves impossible, about abolishing the Senate altogether.

 

 

Endless Debt Disaster: It’s Time To Hit The NDIS

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.