AT THE CONCLUSION of a budget week that has ignited a torrid political climate — with accusations and counter-accusations flying on all sides of the political spectrum — a similarly febrile week seems certain to begin tomorrow. Results of reputable polling conducted in the aftermath of the budget will shortly become public, and it is necessary to note the attitude of the states toward funding changes, and not the way they might choose.
I think it is fair to say that nobody (and I do mean nobody) in Australia is completely happy with the federal budget delivered by Treasurer Joe Hockey on Tuesday night.
This column — known for its conservative views, and far too often incorrectly accused of blind bias on account of them — has reacted savagely to some of the measures in that document, and I maintain that changes to fuel excise and the so-called “deficit tax” will cost far more in votes than they will yield monetarily for government coffers.
Nonetheless, the budget was a big step in the right direction; despite protestations to the contrary from the ALP and the Greens, the debt and deficit position engineered by those parties in office was absolutely reprehensible, and Hockey is right: pain and heavy lifting must be undertaken now to avoid much, much worse in 10 or 20 years’ time.
This afternoon’s post is intended simply as a wrap-up before things get moving again tomorrow; indeed, I may even post again late tonight, and especially if some of the polling data that is imminent begins to filter through before bedtime in Melbourne.
I had started writing a piece last night on the latest (imbecilic) predictions by Clive Palmer — that any early double dissolution over the budget would see him elected Prime Minister — although the prospect of an early election seems to have receded a little today, with actual Prime Minister Tony Abbott hosing down the speculation and talking of an election in “the middle of 2016.”
Even so, we’ll keep an eye on this, and an ear on the utterances of Clive; I have rarely been as certain of anything in politics as I am that Palmer will never, ever become Prime Minister of this country, and although the window for such an article to be topical might have closed for now, I may still revisit the issue if election speculation and/or delusional pronouncements of this nature begin anew.
As far as the impending polls are concerned, the hit taken by the Abbott government may prove smaller than many believe or — in the case of the ALP and the
Communist Party Greens — hope.
After all, a large proportion of the “nasties” in Hockey’s budget were leaked in advance, in some cases well in advance; consequently, much of the public anger such measures might generate has already been aerated, and the relatively poor average figures recorded by the government over the past six weeks represent the form it has taken.
It should be remembered that for every angry voter, there is another who will express satisfaction that Hockey and Abbott haven’t squibbed the reconstruction job the budget required them to perform, although as I noted during the week the budget is in such poor structural shape thanks to the efforts of Wayne Swan that even with the measures Hockey seeks to enact, debt will remain at about $300 million in ten years’ time.
In other words, the backlash against the government from the handout lobby, outrage peddlers, the proportion of the electorate who listens to them and the political Left, which fans their fury, will be tempered to some extent by those who know there’s a problem and are satisfied (if not personally content) that the job the Coalition was elected to do has been started.
In any case, the polls we see this week are no indication of what they might look like on election eve — whenever that turns out to be — and whilst the Left will revel in the numbers they reveal, the odds must still overwhelmingly favour Abbott’s re-election even if by a drastically reduced majority.
In some respects, the 2016 election is one the Left cannot afford to lose: if the Coalition’s program is able to be fully (or substantially) implemented, and the bulk of the time prior to another election nominally due in 2019 sees that program bedded down and in a manner that sees the average voter increasingly happy with his or her lot, then the prospect of Labor remaining in opposition for at least a decade increases exponentially.
It’s a consideration no doubt informing the absolute bullshit being propagated by that party and its “leader,” Bill Shorten: this week, it’s been a story circulated virally online that Labor was a low tax, low spending, low debt government. It will surprise nobody to see that the old Labor principle of regurgitating rubbish repeatedly until people believe it is still alive and well.
I’m not going to dignify the offending material by republishing it here. But I will simply say of the international comparisons so beloved of Labor in justifying its incompetence that debt, spending and taxes were all left higher than they ever had been by the ALP when it left office — irrespective of what the OECD average is or how bad things are in Greece. “I murdered him, but the guy in the next cell killed his victim more” is no defence, although this is essentially what such arguments boil down to.
Yet even so, Labor must realise that if the sky hasn’t fallen in by 2016, it probably never will; it didn’t after the Liberals won in 1996, and it won’t now. Time, quite literally, is Labor’s enemy, and there are clear signs even with the disconnection from reality that ultimately cost it government last year the ALP understands this.
Finally, I want to comment briefly on the “outrage” of state Premiers — Liberal and Labor alike — over changes to health and education funding contained in Hockey’s budget.
Abbott and Hockey were very clear that they would only honour spending commitments inherited from Labor over the four-year estimates period, and whilst I don’t wish to comment on health just yet, the Gonski commitment from the Coalition very clearly excluded the fifth and sixth years of the package (which account for close to half the total money Gillard and Swan were throwing around in search of votes).
But the point I really wanted to make — more as food for thought really — relates to the GST, and the present debate over whether it should either be broadened and/or increased.
This tax, when first implemented, was conceived as a growth tax whose proceeds would be handed over to the states in total, and whilst I disagree with the so-called formula of the Grants Commission that sees some states (almost criminally) shortchanged to subsidise others, this central premise of the GST funding the states was honoured.
Nearly 15 years later, the benefit of hindsight is revealing indeed.
Rather than invest a reasonable proportion of their GST revenues in infrastructure, the states — predominantly run by the ALP — instead squandered the GST windfall the Howard government gave them. Bloated bureaucracies, extortionate pay rises for teachers and nurses and at times ridiculous social spending — even duplicating Howard government initiatives like the First Home Buyers’ Scheme — took centre stage as infrastructure rotted, critical projects were deferred or purchased by means that saddled their constituents with decades of public sector debt to repay.
Here in Victoria, the Kennett government left office in 1999 with enough money in the bank to build the Scoresby Freeway through Melbourne’s outer eastern suburbs, and to pay cash for it. Yet Labor under Steve Bracks spent the money somewhere unidentifiable, and the Scoresby (now EastLink) carries a toll and will do so for decades. Rail, road and tram infrastructure was neglected, and capital works projects such as a desalination plant were built with private sector money that obligates Victorian taxpayers into the 2050s, with obscene water bills stretching that far into the future to pay for a plant that has never delivered a drop of desalinated water, and isn’t ever likely to.
There are other examples of state profligacy in Victoria, just as there are equivalent stories everywhere else a state government pissed its GST booty up against a post.
It may be the case, however, that in declaring the states should accept a more rigorous level of accountability for funding their responsibilities, Hockey might have told them instead to confront their public sector unions: the highest recurrent costs faced by all of the states are labour costs, and arguments about equalisation of GST transfers aside, the opportunity was taken by Labor governments to pour their GST bounties into big ongoing pay rises for teachers, nurses, pen-pushers, and anyone else whose union had the clout to belt their ALP paymasters into submission.
It’s another clue that the Gonski money, for example, was always destined to end up in the wallets of teachers rather than “resourcing” schools as claimed, and one that follows from the relatively mute response by teacher unions to the budget during the week.
Abbott and Hockey are not removing funding from the states altogether from 2018; merely slowing the rate at which non-GST revenues have increased on Labor’s watch. It is responsible to bring to an end the legislated bribes and budget booby traps Labor enshrined in law before it left office. The ALP does not govern this country any longer. It is time it woke up to the fact.