Con­ser­va­tive val­ues a bud­get spent force

The Sunday Telegraph (Sydney) - - OPINION - PIERS AKERMAN

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.

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