I was pottering around the house this Sunday morning doing some chores and flicked on the ABC's "Insiders" program to provide some background noise and keep me company. Incredibly, almost 2 weeks after the Abbott government's first budget was handed down, the show was more or less dedicated entirely to an analysis of the budget, how it will affect the government's re-election chances and whether there were rumblings in the party to replace Abbott as leader.
It's hard to think of another budget in recent times that has provoked such a sustained outpouring of emotion from the community or has continued to be front page news so long after its release. The first budget Paul Keating handed down after his re-election as Prime Minister in 1993 where the "L.A.W. - law" income tax cuts were revoked comes to mind, but even then the hubbub seemed to die away after a couple of days. On the other hand, this budget looks set to be a running sore for the government well into the foreseeable future, especially when you consider the way the state governments have reacted and the fact that the measures are still to be negotiated through an increasingly eccentric Senate. Abbott came out talking tough this week and said if necessary, he was prepared to go through a double dissolution process in order to get the legislation through. However given recent polling this could prove quite foolhardy, and one suspects that compromise with the Clive Palmers and Nick Xenophons of the world may prove to be the order of the day.
I can quite understand why certain elements of the community, most notably anyone on a pension, the long term unemployed and low income earners are aghast at the measures in the budget. What I can't understand though is why anyone was surprised about it. Apart from the fact that the government lied through their teeth about not introducing new taxes - something everyone ought to be well-accustomed to by now from any government - the Abbott government's agenda and policy direction has been pretty transparent from day one. The following points sum up their philosophy as I see it reflected in the budget:
- the government should be as small as possible and invest as little as possible in providing services to its citizens;
- the government should as far as possible not participate or intervene in the economy and instead it should be left to big business to run things ... because we all know how smashingly well that worked out in 2008;
- tertiary education ought to be only available for those who can afford to pay for it. After all, they don't want all those poor people who probably vote Labor to get a leg up in society;
- even though citizens have contributed a significant part of their income over their working lives to the government, providing a safety net in retirement, helping with finding alternative employment or with disability or illness is not the responsibility of the government and when they fall on hard times, people ought to fend for themselves or rely on charities, not call on government assistance;
- although Australia is a rich country and is a signatory to the Millenium Goals designed to mitigate global poverty, because of our "budget emergency", we are now going to renege on our treaty obligations to poorer nations and dramatically cut foreign aid. Furthermore, to save money, we are going to send refugees from those countries to rot in Papua New Guinea in squalid detention camps rather than dealing with them here;
- science and education ought generally to be treated with suspicion, as academics and scientists often publish inconvenient research which challenges the status quo and may prejudice the interests of big business. Under no circumstances should their funding increase, and where possible, money allocated to areas like the CSIRO should be re-directed to areas like Defence, which to their mind can never have enough funding;
- despite an urgent need for it, we are not going to invest in infrastructure, nor facilitate any measures to come up with clever means of partnering with the private sector to deliver and fund this infrastructure.
The government even propagated the biggest lie of all to support their budget measures, namely that the Labor government left the country broke and all of the budget measures are necessary to stop Australia being placed in the hands of the IMF. When you analyse the facts, this is of course a load of rubbish. While it's true the government had debts when the Liberals took over government, this was nothing compared to the mess that the Fraser inherited in 1975, Hawke inherited from Fraser in 1983 or Jeff Kennett took over in Victoria in 1992. If things were so bad, then why didn't the government act immediately and decisively like Kennett did to stop the bleeding?
I tend to agree that it's a good idea to rein in spending at a time when, due to a range of factors including a slowing in mining sector, government revenue is falling . However, there is nothing so drastic in this fall off in income nor the finances the Abbott government inherited to warrant the severe measures taken in the budget. Put simply, this budget is all about implementing the Neo-Conservative agenda the government so admires the Republican Party for. The problem they are finding though is that Australia is a very different society to America and Australians won't put up with Republican-style measures for very long. Just look at the recent polls.
The measures contained in the Federal Budget look even more stark when you compare it to the recent Victorian budget handed down about a week before the Federal one. In contrast to their Federal colleagues, and after 3 years of relative inaction, the Victorian Liberal Party has now turned the corner and delivered a largely positive budget, the cornerstone of which was the announcement of a series of important infrastructure projects in and around Melbourne which the government intends to deliver in partnership with the private sector.
At a time when other sectors of the economy are slowing and excess capacity is being freed up in the construction sector, this sort of thing makes excellent economic sense. Not only will the Victorian government benefit from cheaper pricing on delivering the infrastructure, they will create plenty of jobs in the construction sector at a time when other sectors like manufacturing and mining are shedding jobs. More jobs of course equates to a happy electorate which may yet equate to another term in office for Denis Napthine and his crew, despite them trailing in the polls up to this point.
It is also shows you the contrast between what a true Liberal government does as opposed to one that may be liberal in name, but which is very illiberal in nature. While generally supporting a free market ideology, Liberal governments understand that from time to time, government intervention in the economy is necessary - usually at a time when the private sector is struggling and is shedding rather than generating jobs. For example, while Abbott and Hockey dithered round on providing short-term assistance to SPC Ardmona, Napthine stepped in decisively with State Government funding, saving the cannery at a time when having it fold would have been devastating for Shepparton. This is because Liberals instinctively understand the fact that good governance isn't all about balancing the books and involves showing a degree of empathy with the struggles of your constituents. Neo-Conservatives on the other hand think empathy is for pussies.
It will be very interesting to see how the dynamics of the Federal and State Budget play out. As of the time of writing, Napthine was trailing but no post-budget poll was available and I would be surprised if he doesn't get a kick out of what he has produced. On the other hand, the Federal Coalition was also trailing, although this trend probably won't continue once people calm down a bit and accept their fate and Labor reverts to its normal behaviour of shooting itself in the foot (is it just me or does everyone find Bill Shorten less than impressive?)
Of course, what would be nice right now is if we got true Liberal governments running both Victoria and Australia, however in the latter case, that would necessarily involve Malcolm Turnbull becoming federal leader. As he is highly intelligent and independently successful however he is uniquely unqualified to lead the Federal Liberal Party, so this is unlikely to happen. That's a shame because we might instead get a government that comes clean on the true state of the finances, invests sensibly to support the economy and comes up with some more constructive ideas than just beating up on its most vulnerable citizens to save money. Until then however expect more of the same.
Apologies for the delay between blogs, I will be back again soon when I have identified something else that cheeses me off.
