Conservative values a budget spent force
MEDIA-friendly Malcolm Turnbull has such little difficulty abandoning sound conservative principles it’s easy to think he never believed in them.
His government’s first Budget represents such a solid rejection of the Howard-Abbott government’s stolid commitment to deficit reduction that Treasurer Scott Morrison must have had his fingers firmly crossed in his pocket when he pledged that the nation would live within its means.
The optimism Turnbull and Morrison claim to have about future growth is the same as that with which punters approach Tatts Lotto. The odds are loaded against a win but self-delusion sees pensioners parting with their readies every week though they know, if they stop to think, that luck is unlikely to favour them. Ever.
And talking of a 10-year plan when no sane economist would hazard a guess about conditions more than two years out is sheer fantasy just as is the notion that this government will “live within its means” (actual quote).
But politicians never relied on the innate optimism of the electorate in their search for re-election and Turnbull has placed all his bets on this factor. The rosy platitudes may stem the drift from the conservative side of politics but with a one-seat majority in the Lower House, Turnbull needs to attract votes from Labor.
Anyone for whacking the big banks? This big spending budget may appeal to those Labor voters who understand viscerally that Opposition leader Bill Shorten is a puppet of the rapidly disappearing trade union movement and that it may be better to have a Turnbull Labor-lite government than a CMFEU-dominated culture in the Lodge.
This government has become an expert in rebirthing debt through the creation of new agencies separated by a cigarette paper from inclusion in the bottom line but it’s smoke and mirrors.
Speaking of smoke, that 50 per cent increase in the tobacco tax over the next four years is going to really hurt smokers, among them welfare recipients, taking recycling to new heights. No wonder the Greens are smirking. Former prime minister John Howard expressed his doubts in a postBudget review and it’s difficult to fault his analysis.
Morrison outlined plans for massive new spending, big new taxes, much more bureaucracy and regulation, and a return to surplus in the period beyond the ability of rational economists to forecast based on hyper-optimistic assumptions about continued economic growth. It’s may deliver the short-term boost needed to slow the downward polling trend but whether it will survive to the next election is dubious, unless the decision has been made to go early.
The legacy will linger and cripple any incoming government however. The forward spending alone has a half-life that will ensure a debt burden for our children and our children’s children.
It’s little wonder that the ABC’s Leigh Sales’ first postBudget question to Morrison was: how does it feel to be the first Liberal treasurer to bring down a Labor budget; or that some Liberal figures are now calling the Treasurer Mr Morris-Swan. Finance Minister Mathias Cormann is said to have told the pre-budget party room not to believe claims that it’s a tax and spend budget but it’s hard not to credit them when tax rises to 25.4 per cent of GDP by 2021 while spending is still at 25 per cent.
“Having exhausted every opportunity to secure savings from our 2014 and 2015 budgets, we have decided to reset the budget …” Morrison said.
Effectively, because the senate wouldn’t do what we want, we’ll now do what the senate wants; if you can’t beat ’em, join ’em. If the senate won’t pass savings ngs to repair the e budget, we’ll just have to do it with taxes. It’s all about “fairness”, the Treasurer said.
Fairness to everyone except cept taxpayers who gett slugged with higher tax through the Medicare Levy and to profitable businesses who would see the bank levy and wonder when the government is coming after them too.
“Fairness” is one of those sublimely undefinable concepts favoured by those who wish to obfuscate. It’s used by people who are “on a journey” who talk of “compassion” and “deliverables” and set a great store in “diversity and inclusion” and operate on the basis of “stakeholders” (who actu- ally own no stock in anything) but want to deliver for the amorphous “community”.
Austerity isn’t in this government’s lexicon. How could it comfortably sit with this cascade of spending $5.3 billion for the Western Sydney Airport; $844 million for the Bruce Highway; $1.6 billion for Western Australian infrastructure including road access to the Fiona Stanley Hospital; $1 billion for regional rail in Victoria; a $10 billion national rail program; a $472 million regional growth fund; $8.4 billion for the Melbourne to Brisbane inland rail project; $1.2 billion for new medicines; $2.8 billion more for hospitals; $115 million more for mental health; $1.4 billion more into medical research; $18.6 billion more for schools … and so it splashed.
Cuts to the bloated and overpaid public service? You must be kidding. Behold the new bureaucracies — the Western Sydney Airport Corp poration; a Commonwealthwea takeover of SnowyS Hydro and a promise not to privatise it; a new Infrastructure and Projects Financing Agency (alongside, apparently, InfrastructureIn Australia);Aus a new Commonwealth-C St at e Skilling Australians Fund; a Medicare Guarantee Fund; an Australian Financial Complaints Authority; a Banking Executive Accountability Regime; a National Housing Infrastructure Facility; a National Housing Finance and Investment Corporation. And so on.
Ronald Reagan once said that the deficit was big enough and ugly enough to look after itself. For him, it was a joke but for this government it’s now a policy.