I was intrigued by Samuel J’s entry about department staff in Canberra being asked for their spending suggestions, no offsets required. Does this imply that the government has decided to forget the whole surplus objective – note that the 2013-14 surplus commitment is looking every bit as dodgy as the one for this year, particularly given the deferring of major expenditures into next financial year – and is now deciding on the content of a politically motivated spending orgy?
No doubt, some sympathetic journalists will applaud this new-found, sensible thinking by the government. Don’t we all realise that the Australian economy is fragile? (None of the Labor government’s doing, of course.) Don’t we all realise that the world economy, while stronger, is still pretty weak? Nothing like an on-going sugar hit from the gummit – aka, ultimately taxpayers – to “boost economic growth”.
And then there will be the avalanche of praise for the innovative social policies that will now be funded, with lots of well meaning objectives and Labor values to their bootstraps.
Here are some of my thoughts of new spending in the new promiscious age.
- Billions to the NDIS, notwithstanding the fact that the results of the trials are not in. This will have the added advantage of cornering state governments who will be left pondering how they can possibly fund their shares. Any sign of hestitation on their part will be interpreted by the government as what the population will get with a mean-spirited Abbott gummit.
- Billions to Gonski, even though it is completely unclear what will even be achieved. Ditto cornering the state governments. And you can just imagine the rhetoric on this one – education is fundamental, our children are our future, etc.
- Billions to childcare in the form of direct subsidy of higher wages for childcare workers and subsidies to the centres. Forget this quasi-voucher arrangement we have at present, the centres want the money directly. The escalating cost of childcare is an issue, no doubt. Perhaps nannies, highly regulated of course, will also be subsidised.
- Increase the dole, and this will have the effect of lessening the impact on the single mothers who have had their weekly benefits cut (and rightly so – this is just tidying up a Howard government initiative).
- Billions on infrastructure, perhaps taking up McKibbin’s idea of using long-term government bonds bearing low interest rates. But note the political choices that will be made in terms of the infrastructure – forget any recommendations from Infrastructure Australia. Get that white board out, Albo, you will be needing it.
- Upping the indexation of military pensions – this will play well in a number of marginal seats, including Eden-Monaro and the Coalition has already committed to doing this.
Of course, all this will be accompanied by a massively ramped up advertising and PR campaign to “inform” (sell) all these initiatives. Could be expensive. We are already see this with the Schoolkids Bonus this summer.
Any other thoughts?
Another issue: I have noticed that the Tasmanian and South Australian governments, both Labor, appear to have thrown in the towel when it comes to fiscal responsibility. Both are now running serious deficits and are racking up more debt. SA will probably have its rating downgraded soon. But is there are strategy here? That the feds will bail them out – there are quite a few marginal seats in both states.