Big Labor Spend-Up From Empty Coffers On Gonski, NDIS

JUST IN TIME for an election at which bribes, fear, empty populism and reckless irresponsibility collectively offer its only viable path to victory, Labor has wheeled out a stunning double whammy of almost $100bn in uncosted, unfunded promises and the arrant stupidity of its pious, self-important, utterly useless former Treasurer Wayne Swan to sell them. Plenty of options exist for Australians to vote for. Labor does not deserve to be one of them.

Here’s a fact: there is not some bottomless well of money for governments in Australia to plumb and throw largesse from like confetti; there never was.

Here’s another fact: there is an endless list of things political parties would like to promise to give voters if they win elections, and endless lists of things voters want from governments if they do: some of these are undeniably worthy; some are dubious, designed to buy off sectional constituencies depending on political stripe; and some are simply downright ridiculous.

But the kicker in this short statement of facts is that with gross government debt now approaching half a trillion dollars — or almost 40% of GDP — over the four-year budget outlook period, this country is no longer one whose debt is “low by international standards,” as ALP politicians like to proclaim; debt at 60% of GDP reaches the lower outskirts of the structurally unsound economies in Europe, whilst debt at 80% of GDP lands squarely in Eurotrash territory that sees several of those economies unable to fund their way out of chronic debt and borrowing.

Here in Australia, we have gone from gross debt levels of -5% of GDP to almost 40% of GDP in less than a decade. It’s now just a virtual hop, skip and a jump now until we hit real trouble: the sort of Armageddon the Liberal Party warned about prior to its return to government, and was ridiculed by the ALP for its trouble.

But just in time for a federal election at which dishonest, unprincipled and magic pudding money management offer its only viable option to puncture the apparent Turnbull juggernaut, the ALP yesterday dusted off its cudgels over two of its most beloved — and least affordable — relics from the Rudd-Gillard-Rudd era, with “leader” Bill Shorten promising to sluice $37 billion in new spending around the education system over the next decade if it wins office, and its insidious, contemptible standard bearer for maladministration and unaffordable largesse getting out and about again in the form of one Wayne Maxwell Swan.

Swan — for the negligible value he represents in Australian politics beyond being a Labor machine henchman — has been spruiking the tired and deluded fantasy of his adequacy and skill as Treasurer, insisting that the National Disability Insurance Scheme (set to cost $22 billion per year within eight years) was left fully funded by the ALP in office: it wasn’t, and as this column said at the time, the “transitional” arrangements put in place were only ever enough to cover part of the start-up phase, and initially until 2018.

It took months — and a change of government — for the true eventual annual cost of the NDIS to be revealed, the original figure of $8bn declared by Swan having been comprehensively shown to be a gross understatement; so desperate was the ALP to conceal the true cost of the program before voters kicked it out of office, it was “sold” on a claim its cost was only a third of the true figure.

But Labor, despite its machismo about being responsible managers of money, was more concerned with sabotaging and booby-trapping the budget at that time to render it completely unmanageable by an incoming Liberal government than it was by any genuine regard for the lot of disabled people.

You’d have to say that that dubious project, against a backdrop of entrenched $50bn annual deficits, was an unqualified success. But remember, Swan was the man who, in tandem with former Prime Minister Julia Gillard, was party to no fewer than 600 solemn pledges of a budget in surplus under Labor, even going so far in 2012 to talk in Parliament of “the four years of surpluses I announce tonight.”

Needless to say, no surplus ever materialised.

But just like a solitary swallow well before the Spring, Swan has decided to emerge from whatever hole he has spent three years skulking in to proclaim that NDIS costs were covered for an initial ten years when he was Treasurer, despite independent Treasury advice to the government that from this year it would be forced to find an extra $5bn per year to cover them over and above the funding already legislated, rising to $11bn per year by 2022.

The pot of money that was supposed to pay for the NDIS until 2018 is already exhausted, which is no surprise given the growth in people accessing welfare provisions for disability has continued to balloon under the Coalition, which — remember — has been prevented by a ragtag assortment of ALP, Communist Greens, Palmer (and subsequent stand-alone troublemakers) and other crossbench Senators from passing almost every budget saving it has tried to legislate in a desperate (if to date misdirected) attempt to push public finances back onto a sustainable footing.

In other words, the NDIS wasn’t fully funded when Labor left office, a situation compounded by the fact that measures attempted by the Liberals that might have made it so now have been relentlessly voted down in the Senate. Rises in the Medicare levy to 2% and then to 2.5% were only ever a fig leaf (and I said that at the time, too).

But this doesn’t bother Labor, which credits average voters with such absolute stupidity as to be queueing up to bombard them anew with — you guessed it — more unfunded, unaffordable spending measures, with solemn (albeit meaningless) statements of fiscal rectitude and promises that every cent of the proposed new money is paid for.

Warming to this irresponsible agenda, Shorten recommitted the ALP this week to fully funding not just the final two years of spending contained in the Gonski report commissioned by Gillard — which Labor failed to legislate, and which the Coalition was upfront about its refusal to pay for before the last election — but to go further, committing the ALP to $37bn in new education funding over a 10-year period in the unlikely event it wins government later this year.

According to Shorten, the outlay on education was “in the black” on account of increased taxes on tobacco consumption, increased taxes on superannuation, increased taxes on multinational companies, and abolishing the (unexpectedly successful) Coalition policy on Direct Action to combat emissions growth.

Taxes on tobacco are likely to impede Labor’s ability to win an election, disproportionately impacting its own lower-class electoral bedrock as they do; taxes on superannuation will push more self-funded retirees onto at least partial pensions as their ability to support themselves in retirement is eroded, wiping out any savings this red herring might deliver; and taxes on multinationals is a hoax currently being used by left-wing parties not currently in government everywhere in the Western world to hoodwink voters into believing there is something grievously amiss with the sector that provides hundreds of thousands of jobs. There isn’t.

Just this week, ultra-socialist British Labour leader Jeremy Corbyn was singing from the same vinegar-stained songbook about Google in the House of Commons as Shorten does in Australia; no concrete details of how this purported crackdown might be effected were given, of course — because it never will be — and no explanation for why, when Labour held office in the UK for 13 years until 2010, no attempt to fix the “problem” was made in government.

New Canadian Prime Minister Justin Trudeau used the same tactic ahead of his election win late last year but of course, now ensconced in office, any mention of “forcing multinational companies to pay their own share” has predictably evaporated.

And so it is with Australian Labor, which didn’t do anything to remedy this alleged outrage of public administration of the business sector — under the astute and competent stewardship of the nation’s finances by Swan, no less — and won’t if, God forbid, it should ever win another election in this country.

But the grab bag of taxes doesn’t end there, with Labor committed to reintroducing not one carbon tax, but two, if restored to office: and with its flat refusal to countenance the cutting of so much as a cent from lavish social expenditure programs that might or might not be worthy, but which simply can’t be justified at a time the budget is haemorrhaging red ink in the tens of billions of dollars per annum, only a fool should believe that a Labor government would usher in anything less than unprecedented, massive, and crippling new taxation measures to pay for it if it makes any attempt at all to balance the budget.

Which, of course, it won’t: responsible economic management, with the partial exception of the Hawke-Keating years, simply isn’t the Labor way.

And anyone who believes Shorten’s latest protestations to fiscal prudence — based on the extremely dodgy nature of his “revenue” measures and on his party’s record in office — should seek urgent psychiatric assessment: the re-emergence of Swan to help hammer out the Labor message in this regard merely underlines the point.

I have been attacked, viciously, for merely suggesting in this column a re-examination of the arrangements for the NDIS and a recosting of the program to look for efficiencies whilst not compromising service delivery; any single social spending program whose first-up slated operating costs are $22 billion annually simply must be capable of yielding several billions of dollars in annual fat without compromising its objectives. But even the mention of looking for savings in a scheme that is a Labor sacred cow is jumped on and disgracefully attacked as somehow an attempt to cast disabled people into abject poverty.

Those attacks, of course, are horse shit, to use the vernacular: but it’s as bad as that when any fair consideration of Labor’s economic responsibility is considered; you can’t even look for ways to deliver the same outcomes for less money without being screamed down as a nasty bastard.

As for education — which isn’t a federal responsibility anyway — the problem far transcends the want of some $37 billion magic pudding handout, and goes to the heart of Labor’s sheer ineptitude in a portfolio it arrogantly and misguidedly insists it owns.

Labor was in office in every state and federally in the late 1980s and early 1990s when the university entry requirements for teachers’ courses were drastically lowered, admitting an army of candidates with severe deficiencies in literacy, numeracy, and critical reasoning to what used to be a noble profession.

I’d say the role of universities is not to teach kids how to think, but the various “education” faculties across the country seem to do a fine job churning out rounded little socialists on a mission to brainwash upcoming generations with their insidious socialist pedagogy.

Once ensconced in classrooms, these teachers — not all of them, mind, for one of the travesties of Labor’s education legacy is that the reputation of good teachers is sullied by the ranks of the incompetents infecting their midst — have presided over the steady fall in educational outcomes that has seen Australia’s international standing as an education nation slip from among the world’s best to the middle of the pack. and have directly facilitated an entire generation of kids that is mostly defective in reading, writing and basic arithmetic: not coincidentally, the same defects as those who should never have been admitted to tertiary teacher training courses to begin with.

Because of the diminished calibre of teachers in the overall pool, it is difficult to justify the continuing employment of a rising number of them on the grounds of merit, performance or outcomes: and also not coincidentally, this has seen teacher unions grow in relevance to the point it’s difficult not to rank them among the nation’s most powerful, if not the most powerful.

Simply throwing money at this problem, in the bucketloads of billions, isn’t going to redress the real problem behind education in Australia: the standard of people entering teaching, overall, is very poor indeed compared to 30 or 40 years ago.

Labor’s education policies are to blame for this — and have created a generation of union-dependent mediocrity that makes it impossible for the best teachers to be paid what they are worth, as the teacher unions insist on equal outcomes for all their members, and which perpetuates an undercurrent of uselessness whose end destination is the generation of Australian kids who simply aren’t equipped by their flawed teachers to face the world when they leave school.

It’s little wonder, when I hear stories of the better state teachers I have known over the years, that so many of them have left the industry, retired early, gone to private schools that pay more for quality hires, or are running specialist and/or remedial private sector educational enterprises based mostly on fixing the faults of state-provided “learning.”

The problem is even further complicated by the fact that to criticise the poor teachers who unfairly sully the fine reputation of the best is to invite abuse from Labor and teacher unions that to criticise the poor is to criticise them all: and this renders the problem impossible to fix. The unions use their muscle to destroy Liberal state governments who try to fix it. Labor state governments, of course, fiddle, but have neither the interest in nor the stomach for slaying the beast their own policies created.

If Shorten, and Labor, wanted to preside over a true “Education Revolution,” biting the bullet and overseeing a root and branch overhaul of the entire Education monolith would be a far better way of doing it than simply throwing money around.

But that’s all Labor knows; tax, spend, tax, spend, borrow, borrow, tax, spend.

In 2016, Shorten Labor is no different, and already, the shamefully irresponsible bribes that only Labor maintains are affordable are already being thrown around, with nary a care as to whether they bankrupt the country, or compromise the living standards of future generations to the point Australia begins to rocket backwards in coming decades relative to comparable Western countries.

Just today, Reserve Bank governor John Fraser has sounded the warning that without budget redress and a hefty cut in the bloated expenditures of the Commonwealth, Australia faces the loss of its AAA credit rating; the consequences of that is that interest on the half-trillion of government debt would rocket, as lending to Australian governments becomes more expensive as global money markets factor in premiums for the risk of default.

There may be a case to argue both Labor and the Coalition are responsible for the mess that must be fixed, but on account of the appearance of $300bn of debt on its watch in government where none existed previously, and more debt-fuelled recurrent spending legislated prior to its defeat — coupled with its stout refusal to allow the Coalition’s savings measures to pass the Senate, content to let the budget haemorrhage, believing this opens opportunities for political attack — Labor is far, far more heavily culpable than anyone could credibly accuse the Coalition.

Some additional material on these themes is available to readers here and here, and it should be noted that — as usual — these articles all come from the Murdoch press simply because the Fairfax titles have published little to nothing where any serious attempt to hold the ALP to account over its incompetence with money is concerned.

There are plenty of options at the looming election for people to vote for; true to type, the Labor offering seems increasingly certain to feature taxes that are either fairy stories or inflict unmanageable burdens on ordinary Australians, whilst promising tens (or hundreds) of billions in bribes that will either never be delivered or which will bankrupt the country.

For those people who actually care about whether the Australia remains a great country in future decades, the ALP is not an option that should seriously be considered as they mark their ballot papers; the risks are simply too great.

And whilst this might mean certain programs are either not delivered or are cut back to make them affordable — even if those programs are, on the face of it, worthy — then that’s the way it must be; the bucket of largesse isn’t bottomless, and there is increasing evidence that it no longer even exists. If it ever did.

Next time Bill Shorten and/or his cronies are in your face promising extravagant spending with supposedly little pain associated with its delivery, readers would do well to bear the points we have covered this morning in mind.

 

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.

 

$6 Medicare Co-payment: Abolishing The NDIS Should Follow

APPARENT CONFIRMATION that the Abbott government will impose a co-payment on bulk-billed GP consultations, with some limits and exceptions, in the imminent federal budget is sensible policy that may address the issue of ambit and unnecessary over-use of doctors’ services. It must be remembered, however, that this is budget policy, not health policy: the “real meat,” on that score, is a decision the government should take, but won’t.

As the widely touted “horror” federal budget draws ever nearer, its shape is slowly morphing into public view; today it has been all but confirmed that the proposal first floated in December to introduce a co-payment of $6 on bulk-billed visits to GPs — capped at 12 visits per patient per annum, with health care card holders and pensioners exempted altogether — will be implemented, and this column adds its robust endorsement.

I acknowledge that the co-payment will not be universally popular; certainly, an article in The Australian today notes that feedback from various organisations and stakeholder groups set to be affected by the change has been mixed. But as I noted here yesterday, opinion polling at the time the charge was initially floated did not show the issue as an overall negative for the Coalition support, and in stark contrast to the attempt made by Bob Hawke to introduce a similar impost in 1991 it may be that — broadly — consumers have come to accept that the healthcare system is staggering under cost pressures that threaten to become unsustainable.

As ever, there is some detail to be fleshed out. Will the charge apply to those visiting hospital emergency departments and if not, what strategies does the government have to deal with the potential torrent of fee evaders set to descend on already over-stressed public hospitals? Will the co-payment be applicable to the after hours home doctor services that are rapidly growing in popularity — especially with families with small children — that presently bulk-bill, in part to help discourage people from sitting at a public hospital all night with sick, contagious kids?

As I pointed out when this proposal was first mooted, the co-payment being considered by the federal government does not represent a change in health policy, and is not the thin edge of the wedge in some dastardly shift either toward dismantling Medicare or (God forbid) in the direction of the dreaded two-tier US-style healthcare system the noisemakers of the Left constantly rattle on about.

Rather, this is a shift in budget policy, made necessary by virtue of the shambolic state of disrepair the Rudd-Gillard-Rudd government left the place in — mortgaged to the eyeballs, to be clear about it — as one of a swathe of measures likely to feature in the budget to shift it back onto a solid, sustainable footing and repair the damage inflicted on the national balance sheet by the ALP.

At $6 per GP visit — and taking into account the clear exemptions and caps for people of limited means, combined with the Medicare figures quoted in The Australian showing an average of 5.6 visits per person per year to a doctor — this initiative fits the mantra of Treasurer Joe Hockey that “everyone will be asked to pitch in” in a way that spreads the burden evenly, and hardly represents a significant impost for most consumers to be expected to pay.

I reiterate the point that this is not a change in health policy: it is a necessary measure to help tackle the $40 billion annual deficit and $350 billion foreign debt levels that the last Labor government left behind; neither of these less than impressive statistics even existed when the ALP was elected in 2007 — the Howard government having cleaned up the last mess Labor left in its wake 12 years earlier — and the fact they need to be dealt with at all continues a solid Labor tradition of economic vandalism and a scorched Earth approach to taxpayer money that has endured since the Whitlam era.

All that said, however, the co-payment is only slated to raise $750 million over four years: other savings have to be found in the government’s quest to repair the country’s finances, and there is no better or deserving candidate for execution (with the possible exception of the Gonski funding package) than Julia Gillard’s so-called National Disability Insurance Scheme.

It is difficult to see how a scheme of this nature — estimated to cost $22 billion per annum in today’s dollars by the time it is fully operational in 2019, with an acknowledgement in government circles that even this obscene number might be undercooked — can possibly deliver value for money, or even satisfy considerations of reasonable and fair value on any criteria of appropriate expenditure of public funds.

Generosity and largesse are not the same thing; compassion and reckless stupidity are not synonymous, either.

Yet the NDIS is set to throw tens of billions of dollars every year at a pool of recipients and beneficiaries that even the most optimistic estimate I have seen suggests number about 130,000 people; it boils down to about $170,000 per year, per beneficiary.

It is a national outrage, not a source of national pride, and when it is considered that a fair portion of that $170,000 will be eaten up by putting more pen pushers in jobs — probably more than 50% of it — it’s actually a national disgrace, and a damning indictment on whoever thought this particular piece of social engineering would be an appropriate whim to indulge.

I wrote about the NDIS last year — readers can revisit that article here — and I should just point out, for clarity, that the $8 billion annual cost I talked about in that article refers to the cost of the so-called trial years between now and 2019 when the blasted thing is fully “operational:” at the time, nobody wanted to put their neck on the line and state the full cost of annual operation of the scheme, and at $22 billion (and possibly more) it is little wonder why.

The NDIS, as I have repeatedly stated and do so again, is certainly a fine idea motivated by noble sentiment and is aimed at a need in society that exists: I think only the most callous cynic would suggest otherwise.

But it is unaffordable, uncosted, and so ridiculously (and prohibitively) expensive that is should have been laughed out of the first cabinet meeting at which it was raised.

The “fix” orchestrated by then-Treasurer and contemptible specimen Wayne Swan looks even more jaundiced now than it did a year ago in light of that $22 billion price tag; ordinary folk now face the triple whammy of a hike in their Medicare contributions, the cost of private health insurance or a Medicare surcharge if they earn more than $70,000 per annum, and probably something far nastier to pay for this package than any $6 fee for seeing a doctor could ever hope to cover.

As things stand, the only place the money can come from — as Gillard and Swan knew all too well — is to borrow it from China, and with the budget settings fixed to push external debt well above half a trillion dollars by 2018 by the time Labor was booted out of office, that unpalatable choice is simply not an option.

Readers will know that I am an ardent supporter of Tony Abbott, both personally and as leader of the Liberal Party, and there are very few issues on which I object to what he is doing. The promise to implement this dreadful waste of money, however, is one of them.

It surprises me that Abbott and those around him could have been so gullible as to have fallen into the NDIS trap, although with an election the Liberal Party was likely to win comfortably already visible on the horizon, one could ascribe it to a case of not “threatening the horses.”

However you rationalise it, what makes it worse is that Gillard explicitly said at the time that she would not pursue the policy without the commitment of the Liberal Party: given the Communist Party Greens were enthusiastically prepared to legislate the NDIS anyway in whatever form Gillard and Swan presented it in, this alone should have set alarm bells ringing in Abbott’s inner sanctum.

Either way, this is a bad package of bad policy and should be jettisoned by Hockey in the budget. As I have said before, it’s a lot less painful to get rid of this kind of spending before it starts; trying to do so once the selected beneficiaries are “hooked on the drug” makes it exponentially more difficult in a political sense to throw them off it.

This was a political instrument designed as a long-term investment in the ALP’s fortunes ahead of an election it knew it would lose badly: it sought a) to lock the Liberals into something no rational case could be made for; b) to buy off the disability community on a permanent basis with a level of state spending not enjoyed, per capita, by any other interest group in the community; c) to create an abyss into which Abbott and Hockey would by necessity stumble in their quest to finance the NDIS beyond 2019, if not sooner, the alternative being d) to render the federal budget completely and utterly unsustainable in time for the 2019 election if the Coalition failed to raise taxes or cut spending adequately, elsewhere, in order to finance it.

Add that to the $8 billion in recurrent annual expenditure for Gonski and the swathe of Gillard-vintage Green programs costing tens of billions of dollars each year, and the real intent of the former government — far removed from compassion or concern about disabled people — springs into sharp focus.

A responsible budget will see the NDIS either abandoned altogether or pared back so far as to slash its allocated outgoings by at least two-thirds. Alas, I fear neither scenario will eventuate.

 

AND ANOTHER THING: I know (based on past conversations with readers) that this is the point some will raise the Abbott government’s paid parental leave scheme; I support the principle of the scheme, but have already said repeatedly that it isn’t a good look to be introducing something paying out up to $75,000 per year. My preference would be to give the scheme a haircut, perhaps bringing it into line with the scheme presently enjoyed by Commonwealth public servants as a happy medium. I should point out, however, that whatever shape the scheme ultimately takes, it will be funded by a new levy on big business: and whether you agree or disagree with that concept the funding doesn’t have to be found within the budget per se, and is thus immune from the criticisms I have been making in this column of the NDIS, Gonski and the so-called Clean Energy measures.

 

Disgraceful Racial Tokenism: Macklin Announces Aboriginal “NDIS”

MINDFUL the Gillard government is desperate, and sensing its panic — especially given the likelihood the budget will worsen its dire poll numbers — I’ve been watching for stunts and gimmicks as it tries something, anything, to claw back ground: enter the “First People’s Disability Network Australia.”

The Murdoch press reports this afternoon that Indigenous Affairs minister Jenny Macklin has announced $900,000 over three years for the “First People’s Disability Network Australia” to provide services to assist indigenous Australians to understand and access support from DisabilityCare Australia.

My response — to use the crude but blunt vernacular — is simple. WTF?

Jenny Macklin is a decent individual, and — despite her politics, which I detest — is normally one of the more reasonable figures on the ALP benches.

But she’s lowered her colours by getting in on this.

Why do Aborigines mandate $900,000 for their own disability network?

Why has the Labor Party opted to segregate — other than for the purposes of gimmickry — the benefits Aborigines will receive from the NDIS from those open to other Australians?

And why should anyone believe this is anything other than yet another cheap political stunt, pandering to minorities in an attempt to be seen, particularly by Greens voters, as bolstering Labor’s “credentials” on “social justice?”

If I were an Aborigine I’d feel patronised and insulted; as an Australian, I’m affronted by what is a clear case of more taxpayer money pissed up against a post on needless spending by a profligate government trying to curry favour in areas it thinks it can win votes.

Remember, Labor is still in the doghouse in some parts of the Aboriginal community over the railroading of former Olympian Nova Peris onto its Senate ticket in the NT at the expense of the far better-credentialled (and Aboriginal) Marion Scrymgour.

A statement from Julia Gillard claimed that her government was “committed to closing the gap for Indigenous Australians with disability.”

Which is fine, although it goes on to say “many Indigenous people are reluctant to identify themselves as a person with disability and often do not seek help with disability services.”

Surely this statement is applicable to Australians generally — not just Aborigines?

But  — again — the $900,000 in spending announced today is to provide services to assist indigenous Australians to understand and access support from DisabilityCare Australia.

Over three years.

Why are Aboriginal people less likely than anyone else to understand what support is available from the NDIS?

Why does the Gillard government effectively state it will take three years for them to understand this?

And far from rendering any meaningful progress in “closing the gap” on indigenous disadvantage, this “measure” tokenises Aborigines.

Its message, simply stated, is that Aborigines are too stupid to be trusted to work out for themselves what the rest of the country has the brains to discover on its own, and must therefore be singled out as desperate cases indeed.

The best part of a million dollars allocated to this is more a salve for Labor consciences and their do-gooder hangers-on than it is a valid expenditure of public money.

Then again, there’s nowhere too low for the Labor Party to stoop now; desperate and panicking, it will do anything — and this is a tasteless illustration of the type of tactics I think we’ll see an awful lot more of before 14 September.

Meanwhile, the ALP has also attempted to refloat its beloved “misogyny” issue today with a fracas erupting over a pairing request for backbencher Michelle Rowland, who has a sick child — initially refused and later agreed to by the Coalition — as it tries to stir up what trouble it can to deflect the extremely poor reception its budget has received thus far.

It is noteworthy Tony Abbott had nothing to do with the request and subsequent agreement to the pairing request.

Predictably, however, Labor types are running around the country, screaming “Tony Abbott just doesn’t get it,” with Julia Gillard stating the episode made “an absolute mockery of everything the Leader of the Opposition has ever said about working women.”

Perhaps it’s too indelicate to point out the decision on the pairing request was made by an opposition whip rather than Tony Abbott personally.

Then again — if you’re the ALP — the truth never gets in the way these days to talk about Tony Abbott and misogyny in the same sentence.

Such is its obsession with the retention of power — and its willingness to smear and destroy opponents on as personal a basis as possible (just ask Kevin Rudd) — that the ALP will say and do anything between now and the election to retrieve its dismal prospects.

Today has been another disgusting day of grubby Labor politics.

It is to be hoped, in his response to Wayne Swan’s budget tonight, that Abbott inflicts some real political damage on a government and a Prime Minister whose tenure cannot come to an end quickly enough when the national interest, rather than Labor’s, is the yardstick.

BREAKING: “Baby Bonus” Abolished In Federal Budget

IT HAS been confirmed the Baby Bonus — a Howard government initiative introduced by Peter Costello to drive population growth — is to be abolished; with it goes more assistance for the “working families” this government claims to represent even as it attacks them on as many fronts as possible.

This latest “initiative” by Wayne Swan — predicted several weeks ago in this column — simply underscores the obsessive mentality of the government when it comes to a handful of its “signature reforms” at the cost of anything standing in their way.

Our position at The Red And The Blue is that tonight’s budget will be devoid of credibility; and whilst Labor types may describe the decision to axe the Baby Bonus as an example of a “responsible save” — to help fund the NDIS and Gonski reforms — the truth is simpler.

The Rudd-Gillard government has spent five and a half years attacking families; the Baby Bonus has been fiddled before, reducing the rate for second and subsequent children from $5,000 to $3,000, and splitting its payment into instalments to dilute its value (indeed, this was initially presented as “parental leave” by Gillard, until government hardheads realised such grotesque spin simply didn’t pass muster).

We will be watching the budget very closely this evening; my tip is that the axing of the Baby Bonus won’t be the last nasty to remain under (official) wraps up to this point.

And I will be posting again late tonight.

But the point simply needs to be made that robbing Peter to pay Paul doesn’t necessarily clear the invoice; and given families are doing it tough as it is — with income levels over $80,000 per year enough for this government to decree a household as rolling in clover when, in reality, it isn’t — at some point there won’t be any kids to educate, or disabled folk to insure: it’ll be too damned expensive to have them in the first place.

Yet again, the government has thumbed its nose at the great silent majority in the middle of Australian society, and in doing so it shovels a little more dirt out of the grave it has been digging itself in readiness for its date with destiny on 14 September.

Credibility-Free Budget: Swansong Signals Joke Nearing Its Punchline

JUST HOURS from now, Wayne Swan will deliver his sixth and last budget: a document innocent of credibility, it will consolidate callous spending cuts, dishonest rhetoric, unaffordable promises, and blatant adversarial politics. The budget — and its author — should be dismissed with contempt.

If “this is as good as it gets” — as Paul Keating once declared famously of one of his budgets — then I’d hate to see what things would look like if the excrement had really hit the fan.

The greatest shame about tonight’s budget is that it will be 12 months before the next is delivered; certainly, Prime Minister-in-waiting Tony Abbott and his putative Treasurer, Joe Hockey, will have some kind of emergency budget late this year, but the real thing is a year away and that is to Australia’s cost.

No government is perfect, and no Treasurer completely resists the temptation to engage in a little budget-related politicking; it goes with the turf.

But on the watch of the pious, self-important, bubbling lump of inferiority and resentment who has presided over the five largest deficits in Australian history and — if he’s honest — will tonight announce the sixth, this country has never been so poorly served by its servants in government as it has been by the present Labor regime and its Treasurer.

Perversely, it isn’t even a question of whether the economy is in the worst state it has ever been in: clearly, it isn’t.

But for mismanagement, incompetence, a questionable command of the realities and abstractions of economics, vapid communication skills and sheer political amateurism, this government and this Treasurer are certainly the worst Australia has ever witnessed.

Swan — and his beleaguered colleagues — can’t even get their stories straight.

“Unprecedented revenue writedowns” have been a favourite thing to blame in Labor circles for its failure to deliver on 600 explicit guarantees of a budget surplus tonight: this mythological loss of revenue has “grown” from $7.5 billion in December to $26 billion now (including an increase in the past fortnight alone from $12 billion to $26 billion).

Interestingly, actual government revenue has increased in the past year, by 7%, and the source for this inconvenient figure is Swan’s own 2012-13 mid-year economic and fiscal outlook (MYEFO) papers.

The really interesting thing, of course, is that the “writedown” is nothing more than a measure of just how overcooked Swan’s own inept economic forecasting has been; if you wish upon a star for $26 billion more than you actually have, there’s always the chance you might get it, but the overwhelming probability is that you won’t.

And you can’t blame “experts at Treasury”, as Gillard calls them, if the money doesn’t materialise; they can’t be “experts” one day and brainless, useless dolts the next.

“Writedowns,” however, aren’t the only thing Swan and Gillard blame for their dismal economic stewardship.

John Howard and Peter Costello are responsible, despite not being in government for almost six years.

The Global Financial Crisis is responsible, despite the fact five years — five years — have passed since that point.

The high value of the Australian dollar against other currencies is prominent on Swan’s blame list this year, despite it being lower than it was twelve months ago, even before it began to fall below parity with the US dollar yesterday.

In fact, there is a litany of factors responsible for the appalling budget management Labor has recorded since 2007 — to list them all would take too long — but the really funny thing about that is that none of them, as Swan and Gillard tell the story, is their fault.

Yet the GFC, whilst a “cause” of all the writedowns Swan needs to blame someone or something for — to backtrack for a moment — is also the crucible of Labor’s greatest claim to fame when it comes to the economy: because of Swan, Australia didn’t go into recession!

It’s true; Australia didn’t. But it recorded one of the two quarters of negative economic growth that technically define a recession, and avoided the second with a quarterly growth figure of just 0.1%.

It’s a pretty crass thing to trumpet anyway, but when it is remembered that “stimulus” spending (of $43 billion) is also routinely offered by the government as the justification, along with the GFC, for the almost $300 billion in commonwealth debt it has racked up since taking office, the “credentials” Labor seeks to brandish don’t carry so much weight.

I have noticed in recent days that Swan has been bragging that since 2007, economic growth in Australia has been 13%.

Which is all well and good, until it is remembered that this is barely more than the 2% per annum generally considered to be the minimum level of growth for the economy simply to replace the jobs that are lost each year.

It’s hardly a stellar result.

And it’s only a little more than half the result recorded by Swan’s (and Labor’s) Liberal predecessors over the nearly 12 year lifespan of the Howard government.

Swan, and Labor, have gone out of their way to offend some sizeable communities and sectional interest groups, including several ordinarily disposed to support the ALP.

It has thrown tens of thousands of single mothers off a parenting payment and onto a significantly lower pension in Newstart; in turn, it has failed to increase the rate of that unemployment benefit, despite deafening calls from its own constituencies to do so.

It’s cancelled (carbon tax related) tax cuts, despite repeated pledges to honour these whilst having the temerity to target the Liberal Party for cutting a separate carbon tax related measure.

It has alienated families struggling with soaring cost of living pressures (which the Labor Party essentially states do not exist) by cutting increases to Family Tax Benefit payments.

And it has raised the Medicare levy — to 2% — supposedly to pay for the National Disability Insurance Scheme, 70% of the cost for which is otherwise unfunded.

The Medicare levy increase is particularly salient, as Swan will freeze indexation of Medicare schedule fees; the government says doctors will absorb the effect of this, but anyone with a brain knows the decision will simply add to gap payments struggling families face to visit a doctor, with some finding it prohibitively expensive to seek treatment.

It’s especially offensive given Health minister Tanya Plibersek has been running around for days trumpeting “record” bulk billing rates: how long does Labor seriously expect it to take before these begin to slide in the face of their budget foibles, and slide steeply?

And reports that the budget will seek to “lock in” $100 billion in recurrent spending over ten years, to fund the NDIS and Gonski reforms in education, should be taken with a grain of salt: these might be worthy but they are not affordable, and I wager will never see the light of day in their entirety.

Just a tip.

Swan’s budget is good for some cheap, tacky politics, too: here in Victoria, the state government has decided to build a road tunnel to connect the Eastern Freeway with the Western Ring Road in an attempt to alleviate Melbourne’s congestion problems.

A second mooted major infrastructure project is a 9km underground rail line to boost capacity on the city’s public train network.

Both projects, in round terms, cost $10 billion.

The state Liberal government and the federal (Liberal) opposition are both pledged to fund the road tunnel, and approaches have been made to the Gillard government to contribute.

Instead, Swan’s budget tonight allocates funding to the rail tunnel, and ignores the road.

It’s the sort of cheap gimmick that represents everything wrong with politics in this country, and with the Labor Party approach to it in particular.

And talking of cheap gimmicks, the runup to this budget has been marked by yet more of the ubiquitous slogans Labor politicians seem to think that — if droned on rote, ad nauseum — will cause millions of stupid voters to recognise the “error” of their ways, and change their intended vote in the ALP’s favour.

Labor is “supporting jobs and growth.” The Liberals will “cut to the bone.”

No explanation or rationale of how either of these are occurring — or might occur, if people really are stupid enough to act on their intent to elect the Liberals — is given or offered.

But that’s an old story where this government is concerned; say whatever sounds good and keep on saying it. But far from convincing anyone, it just sounds stupid.

Genuinely stupid.

And that’s the point; an endless trail of broken promises, poor decisions, shocking management and abominable presentation can all be fixed with a bit of smarm, smug spin, a few smart answers, and an imputation that anyone who disagrees is just plain dumb.

Tonight’s budget is the pinnacle (for want of a better word) of a dubious bad joke; six years of Labor government that will reach the punchline in September, as millions of ordinary Australians deal out an electoral drubbing that the party may take decades to recover from, if at all.

Whatever else anyone thinks of this government, or the alternative — and let’s face it, the Liberals could hardly be worse than the masquerade of effective government the ALP has staged — tonight’s budget is an exercise in credibility-free posturing, and should be viewed accordingly.

And if Wayne Swan offers you, your family, your community or your cause any money, believe it when you see it; or, indeed, believe it at your peril.

Latest Stunt: Medicare Slug Misses The Point, Cheapens NDIS

TODAY’S ANNOUNCEMENT of a hike in the Medicare levy might tweak a few heart strings in the name of the disabled; stripped bare, it adds to the huge budget deficit Labor has incompetently accrued, fails to deliver the NDIS it is meant to fund, and is a stunt to win votes that deserves to backfire.

Let me be clear: this column supports a National Disability Insurance Scheme and, were the money no issue, would be clamouring for its introduction as loudly as anyone.

Indeed, when the idea was first raised, the exact word I used to describe it was “exciting.”

But at $8 billion per year — notwithstanding the pathetic attempts at stately rhetoric being deployed by Julia Gillard and Wayne Swan this week — it’s clear the NDIS, like the so-called Gonski reforms of education funding, is a worthy idea that is simply unaffordable.

Here is my argument in simple sentences (I know I can get carried away). Here we go.

The budget deficit is already running at $20 billion (some estimates put it higher).

On Monday, Gillard and Swan announced a “black hole” in budget revenue of $12 billion.

This is in addition to a “shortfall” in revenue of $7.5 billion, announced on Christmas Eve by Wayne Swan, as he abandoned the government’s estimate of a budget surplus.

Cumulatively, that’s a $20 billion deficit and a $19.5 billion deterioration in revenue.

A hike in the Medicare levy from 1.5% to 2% will raise $3.3 billion per year.

Although the scheme doesn’t start until 2018 (when a $20 billion pot from the monies raised from the Medicare levy hike will be in place to kick it off), $8 billion per year will have drained the pot by 2022.

The ongoing NDIS will, in today’s dollars, add a further $4.7 billion to the budget deficit, as the residual $3.3 billion in Medicare levy receipts will be inadequate.

Thus, the deficit Swan is going to attempt to fix as an “economic program” and not “an election pamphlet” in twelve days’ time — Gillard’s words, by the way, not mine — starts with a structural budget deficit of nearly $25 billion, not $20 billion as widely touted.

My point in laying all of this out is that Labor is again attempting to hoodwink voters; I’m going to be unguarded and say the federal government couldn’t give a rat’s arse about disabled people; they only care about their own survival.

The sombre little exercise of announcing a hike in the Medicare levy is just the latest stunt.

Two weeks ago it was Gonski; as we have discussed — and as Gillard knows — that jar of snake oil was viewed by voters as less than impressive, judged by published polling.

Before that it was superannuation, in one of Swan’s beloved “hit the rich” escapades, and despite those proposals being substantially watered down (people don’t like the idea of the government fiddling superannuation) the reaction to that, too, was malevolent.

We could recount at least a dozen such schemes over the past twelve months, whose presentation was benign but their real intention was clear: a “smart” initiative that would dupe dumb voters into a quick surge of support, that could be converted into a parliamentary majority at a snap election Gillard would pull on at literally a day’s notice.

(Despite the fact it didn’t cost money, “misogyny” falls within the same list of initiatives).

And the point here is that the ALP is methodically working its way through a list of potential hot-button issues, desperately searching for the one that will enable it to rush off to the polls in a blaze of “glory” and saddle the electorate (which Labor gives no credit for any brains) with its dubious services for an additional three years.

It seems to have left what it sees as the really emotive stuff until last; “education” didn’t work (and why would it, with billions ripped out of universities, and a smoke-and-mirrors charade over schools?), so now it’s time to have a fresh try with “DisabilityCare.”

Gillard could simply legislate her NDIS in the knowledge it would be passed with Greens support in the Senate; she says she won’t do it without Liberal Party support.

The fact this position is meaningless — she doesn’t need Liberal Party support to govern — doesn’t seem to matter.

Leigh Sales put much the same proposition to Wayne Swan on the ABC’s 7.30 tonight; Swan dismissed the notion of simply legislating the NDIS as “a hypothetical.”

No, they want to fight an election on it if unconditional capitulation by the Liberal Party is not forthcoming, rather than governing — which, by the way, is what they are in office to do.

And given the issue in question, it is particularly offensive that Gillard repeatedly claimed today that she doesn’t want the NDIS to become a political football when she is taking steps to ensure it becomes exactly that.

It sends the terrible signal to disabled people, their families and their friends, that they can have their money — but after they have been used by the ALP as political pawns.

Given the Liberals are committed to establishing the NDIS anyway — despite not yet announcing the means of doing so — the issue is no positive for Labor, and nor should it be.

Instead, it simply cheapens the noble ideal of an NDIS at all — and that’s a shame.

But it brings me back — again — to the fraught issue of the coming budget, and the horrors likely to be in it.

The egg on the faces of Gillard and Swan, after literally hundreds of iron-clad “guarantees” of a budget surplus, is now so rotten as to be sulphurous.

Surely the embarrassment, the odium, and the ruinous state of Labor’s economic “credentials” dictate that some effort will now be made to fix the deficit.

For all the talk of “shortfalls” and “holes,” revenue is actually up by over $100 billion per year since the Howard government was defeated; the problem isn’t one of tax receipts at all: it’s a spending problem.

And that problem, despite the worthy NDIS, got $4.7 billion bigger today.

For all the talk, I think the rise in the Medicare levy will happen — and that leaves Swan with a structural deficit of $25 billion to fix.

I shudder at the thought of what the budget will look like, but if Swan makes a credible attempt at closing that hole, the impost won’t be $1 per day per taxpayer, as Gillard parroted all day to the media; it will be more like $50 per week.

The “$1 per day” analogy is contemptible enough, seeking to cheapen what is a tax hike, and no less.

But at $50 per week, no spin will cut it: ordinary people can’t spare that sort of money, irrespective of how noble the intent; and when it is remembered that most of that $50 is paying for nothing more than the redress of the ineptitude of a government out of its depth, there won’t be any votes in it for the Labor Party at all.

The responses to Labor’s earlier stunts will seem mild compared to what awaits this.