Getting with the program

Well, here we are heading for the fiscal falls. The Government has locked in their strategy, not one I would have chosen but they have made the decision so over the falls we will go.

Let us try to be positive. First and foremost, it is better than anything that Labor might have done. For all their maunderings about balancing the budget and getting their house in order, there was never the slightest chance they would. The Swan-Wong team of economic managers had no will at all to stop the fiscal rot. The spending ministers overwhelmed those who thought about prudential outcomes, assuming any thought that way at all.

Second, the budget will be a tough sell but it can be done. Abbott has credibility. No one will be in any doubt that the fiscal horrors left by Labor are an Augean stable that were not the Coalition’s doing. I don’t think they have set this narrative up anyway near well enough but even at this late stage they might be able to convince the country (or at least 50.1%) that these are steps that must with absolute necessity be taken.

Third, the steps to be taken are decided by cabinet so no point in dwelling on what I would have done. That’s a lot of people amongst whom the right compromises must be found. No doubt the PM and Treasurer are leading the way, neither of whom is an economist but there have been other hands on the tiller as well. Everyone in the Ministry is frightened by the size of the deficit they must deal with and are thinking about how this is to be done. They cannot see economic growth as the road to balance, and in fact, don’t really seem to have much idea about how to generate that growth. This must be looked at as a distant second best solution but with Treasury a dead zone for economic thinking, maybe that’s all that can be done. I imagine very few in Cabinet think that a program of cuts to public spending, pulling down regulation, and freeing up industrial relations would do the trick. So this is the way they have chosen to go forward.

Fourth, the major issue is the politics. If there weren’t an election to come in 2016, for which these decisions will be anthrax and strychnine for a large proportion of the voting public, it would not be all that hard to accept that this is how it will have to be. Since this seems to me like a poor approach to the economics and a very dangerous approach to the politics these decisions fill me with dread. If they lose office on the back of these decisions, they will be deposited in the very lowest depths of our political inferno. To have misjudged the politics will be unforgivable. Three and out would repel me and anyone who seeks good governance into the long term. If it brings Labor back to office after three years and not six or nine, there is nothing they can do or will have done that would be anywhere near fair compensation. All they will have done is hand over a more solid foundation for future Labor Party waste. Bill Shorten is far and away the strongest supporter of these policies in the country.

Nevertheless, this is their call and they may pull it out. Economic policy is not the only thing that affects the direction of an economy so there might really be a strong economy leading into the next election. Even more impressively, the country might even appreciate someone taking responsibility for the horrors that the ALP left behind. There may be a constituency for people saying that we must pull together for the national good. The media won’t help them but the Government does have its friends. The die is obviously cast so there’s no point in going on about it. So for me, I will hope things work out for the best and get on with life.

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284 Responses to Getting with the program

  1. Elizabeth (Lizzie) B.

    Good to hear from you all on this – from a distance. Perhaps that gives perspective. I’m in Moscow.
    Life goes on no matter what and people here are out in the early and very cold spring in Red Square awaiting the commemoration of the Great Patriotic War. Soldiers are marching, wreaths being laid in preparation, scaffolding seats are up and ready for Friday. Zhukov is standing on his bronze horse in his stirrups, riding forever now into Moscow. Even Stalin couldn’t get Zhukov, says Da Hairy Ape as we stand beneath the charger and wonder at how much something changes, and yet stays in many ways the same. Australia will survive, and do well; there are bigger problems elsewhere.

  2. But we can be sure that if he had not laid the minefield and the Task Force had been overrun one night, he would have been criticised for failing to prevent it.

    The barrier minefield was never designed to prevent VC attacks on Australian bases.
    It was intended to prevent the VC from accessing the village population, and to restrict their freedom of movement between the villages and the coast.

    The mines were removed during 1969-70.
    Apart from the 55 killed and 250 maimed by the lifted and relaid mines, further casualties were caused in the removal operation, until Major Rex Rowe, CO 1st Field Squadron, Royal Australian Engineers came up with a novel solution. They attached large steel-plated rollers to the rear of an armoured personnel carrier (APC) and drove at speed through the minefield, detonating the remaining mines.

  3. Senile Old Guy

    I’ve asked twice before with no response from you: How does continued support for Abbott and the LNP translate into any measurable difference for Australia and its citizens?

    Easy, we get this:

    Central to the government’s thinking has been the contention that it is impossible to withdraw benefits from those who do not receive them, making a tax increase the only way to ensure wealthier Australians carry a burden equivalent to poorer people.

  4. laugh out loud

    Prof Kates – indeed terrible times wot with Labor leaving a debt to gdp ratio the envy of the oecd and a AAA rating. And those damn elections every three years that might allow that dratted Labor back in – what a bother! Most curious that you say Abbott has credibility – what little he had is now gone. What riles is his dishonesty – no surprises and no excuses – unity ticket on Gonski and no new taxes. Still, you own him. Good luck.

  5. Great piece by Nick Earls.
    I worked with his father when I was teaching at SSSC, New Farm, in the seventies.
    Never met Nick though.
    He is a top Australian writer.

    An extract –

    The report seems to take a sideways look at America, a country that shows us the best and worst of capitalism, and cherrypicks the worst bits. It radically slashes the minimum wage, decreases a whole range of benefits connected to things like health and education, and imposes costs on people who can’t afford to pay.

    In too many ways, it looks like How to Create a Permanent Underclass 101.

    It turns cooperative federalism into competitive federalism, something else that, in the US, has widened the opportunity gap between children born in rich states and those born in poor states.

  6. Senile Old Guy

    But, wait, there’s more [link may be paywalled]:

    Whatever level is chosen, it will be sold as a fairness measure, although when the former Labor government wanted restrictions on welfare at $150,000 the Abbott opposition called it class warfare.

    What about cutting down on pollie perks, such as the Gold Pass?

    Under the Abbott plan, it would no longer be available for life, meaning that some who have been using the Gold Pass for longer than they were ever in ­parliament would lose it. Former MPs would only ­qualify for five trips a year, half what they get now. And they could be in the scheme for only one parliamentary term or three years — a maximum of 15 trips. Former ministers, presiding officers and opposition leaders would get 10 trips a year for two terms or a maximum of six years, giving them 60 trips.

    It’s a “fairness measure”.

  7. Senile Old Guy

    Great piece by Nick Earls.

    Nope. Usual, non-specific hand wringing about awful things conservatives do. It’s on the Dumb, so no surprise. (And numbers name dropping, also no surprise.)

    Who is

    Nick Earls?

    Nick Earls (born 8 October 1963 in Newtownards, Northern Ireland) is an award-winning novelist from Brisbane, Australia. He writes humorous popular fiction about everyday life, and is often compared to Nick Hornby.

    He writes fiction, so is the perfect “go to” person for the ABC wanting advice on the budget and social welfare.

  8. non-specific hand wringing

    Always more useful than non-specific abuse and demonisation of the poor, which is always the go here.

  9. Rabz


    He writes humorous popular fiction about everyday life

    Only one word in that sentence is true.

    He’s about as humorous as the Holocaust.

  10. perturbed

    Howard made some very shaky decisions early in his first term, yet managed to bounce back from that with outstanding success. Abbott and Hockey simply need to keep the reasons for their decisions focussed firmly where they belong – the criminally incompetent wastrels on the other side of the chamber. “YOU DID THIS. YOU LEFT US THIS LEGACY. YOU RAPED THIS COUNTRY AND BROUGHT IT TO ITS KNEES.” And not let up. Ever.

  11. Senile Old Guy

    Andrew Bolt changes his mind:

    Tony Abbott should drop his planned new deficit tax and say sorry for even thinking of breaking a promise.

  12. Des Deskperson

    ‘Generally in the APS it’s troops who can make a quid outside who put their hand up, the duds stay until they’re guaranteed to never have to release the nipple’

    This is. of course, the problem with the ‘hands up who wants a package ‘ approach.

    The efficient, effective, ethical and sustainable method (to quote from the FMA Act) of conducting a downsizing exercise is to prioritise agency tasks, identify the skills and capabilities you need to retain to do these tasks (using a ‘reverse order of merit ‘ process to help target them) and offer redundancy packages to the people you no longer need.

    This almost never happens, partly because management doesn’t want to give up its empire, partly because giving up functions threatens the jobs of managers as well a grunts, but mainly because it’s all a bit too hard for your average APS Executive. Easier to just dole out packages to whoever wants it, it’s only taxpayers money.

  13. HRT

    There hs been some discussion over a “temporary levy” and how long temporary might be. Allow Lionel Murphy ex Attorney General to help out.

    Murphy opined that a period of 20 years could be regarded as temporary. He said this as Loan Council approval was not needed for temporary loans. Thus Rex Connor could borrow millions via Khemlani without Loan Council approval – except the bustards were sprung.

    Thus, temporary = up to and including 20 years.

  14. .

    1735099
    #1292234, posted on May 5, 2014 at 8:03 am
    non-specific hand wringing

    Always more useful than non-specific abuse and demonisation of the poor, which is always the go here.

    Absolute nonsense.

    Defended:

    1. The right to contract.
    2. Broad culture if it doesn’t glorify thuggery.
    3. Tradition, which lower income families prefer.
    4. The abolition of regressive excise taxes.
    5. The abolition of tariffs, which the least well off have the least capacity to pay.

    You’re full of shit, numbers.

  15. Howard made some very shaky decisions early in his first term, yet managed to bounce back

    He introduced gun control. It nearly wiped him out. It certainly wiped out every conservative state government that introduced his controls.

    How the sonofabitch came back from such a slap to the people is testament to his political skill.

  16. Helen

    demonisation of the poor

    Most of us have been, or are, poor. Thus direct experience of being poor and with the desire and ability to escape being poor.

  17. demonisation of the poor

    Another way of saying “expecting the poor to make their own decisions”
    You’d have to be pretty unhinged to see anybody demonising the poor.

  18. Elizabeth (Lizzie) B.

    a debt to gdp ratio the envy of the oecd

    Laugh out loud, you have chosen an appropriate name, because that’s what we do to you and your ilk here.
    You have certainly bought a crock of ordure if you believe that our debt is ‘enviable’. It is not, and we are very much alone with it down in the Southern Hemisphere. No big US dollar and no massive Germany will bail us out. We’ll have to live with what Labor has made. Go away and let us make the best of the mess that you have left us. We may not like his levy (I’d prefer to fire you and all Labor rent-seekers and programs instead) but Abbott is not 666 to us here.

  19. Senile Old Guy

    ACCI is warning against any tax hike, saying it breached an election commitment. Releasing ACCI’s latest business expectations survey, acting chief economist Burchell Wilson said the levy would create a disincentive to investment and employment, and damage business and consumer confidence. “A debt levy is poor policy, it’s ill advised,” he told reporters in Canberra.

    KPMG analysis indicates the introduction of a levy for the wealthiest Australians to repair the budget would make Australia the eighth-highest taxed nation in the OECD.

    Bill Shorten told reporters he appreciated Tony Abbott’s early birthday present, “It’s very generous, even if he is getting other people to pay for it.”

    Cabinet ministers are also reserving the option to completely scrap the idea before the budget is handed down on Tuesday next week.

    I may have made some of that up. Link: may be paywalled.

  20. Defended:

    1. The right to contract.
    I am not for sale.
    2. Broad culture if it doesn’t glorify thuggery.
    Thuggery is the application of force to secure an outcome. That is precisely the process when an employer with absolute power takes on a job-seeker with absolutely no power.
    3. Tradition, which lower income families prefer.
    You have the arrogance to stereotype the preferences of “low income families”. How would you know what each and every individual prefers? And it has nothing to do with “preference” and everything to do with survival.
    4. The abolition of regressive excise taxes.
    Revenue, if used correctly improves the quality of life of those with no power in a community.
    5. The abolition of tariffs, which the least well off have the least capacity to pay.
    Tariffs are no longer an issue in this country with unilateral “free” trade agreements. Fair trade remains an impossibility whilst multinationals are accountable to no one national government.

  21. .

    Marxism and anti globalisation.

    What a deluded fuckwit.

    Unfortunately, this guy is an educator.

    I would recommend taking your kids out of schools he has an influence at.

  22. Mk50 of Brisbane, Henchman to the VRWC

    Anne:

    I think, for Numbers it’s as simple as – many killed by Menzies therefore Libs evil, a few killed by Rudd, therefore ALP okay.

    It’s not sophisticated reasoning, it just comes down to Numbers. (Pun intended)

    This also proves the depth of his innate racism, for you are right.

    Numbers being a racist, it’s easy to see his reasoning:

    Menzies era: 500 white Australians killed in Vietnam = Libs bad

    Rudd-Gillard era: 4 killed in Pink batts debacle = ALP good because 4<500

    Rudd claims to have killed 4,200 boat people = ALP good because Numbers does not care about them, they are just 'little brown people' to a racist like him.

  23. Marxism and anti globalisation.

    Nowhere have I quoted Marx.
    Nowhere have I condemned globalisation.
    What I have condemned is the phenomenon of multinationals having no accountability .
    Gratuitous abuse makes you look silly.

    Rudd claims to have killed 4,200 boat people = ALP good because Numbers does not care about them, they are just ‘little brown people’ to a racist like him.

    If one asylum seeker of any race drowned in a desperate attempt to seek refuge in Australia, that is one too many. The responsibility for the drownings, however, can be sheeted back to John Howard, when he used the issue as a wedge, linked it to 9/11, and comprehensively destroyed any possibility of a bi-partisan approach to solving the problem, a solution which was applied successfully through the Comprehensive Plan of Action 1989 – 1996.

    If racism is an issue, the harnessing of this base bigotry in demonising asylum seekers by those on the Right, led by the Racists-in-Charge such as Alan Jones, Andrew Bolt and Ray Hadley, and their cheer squad, many of whom post here, is where it was displayed.

    Asylum-seekers were regularly stereotyped as terrorists, country-shoppers, dole-bludgers and
    welfare seekers by those lacking the honesty in public to used the racist epithets they used in private.

    They also displayed total hypocrisy by pretending that their concerns were humanitarian. If you bought that, you were probably in the market for a very large bridge across Sydney harbour.

    These same racists then project on to anyone critical of the bi-partisan brutality created by these policies by using the term, best applied to their particular brand of bigotry, as abuse.

    If Agro is looking for a racist, he/she/it need go no further than the nearest mirror.

  24. If one asylum seeker of any race drowned in a desperate attempt to seek refuge in Australia, that is one too many. The responsibility for the drownings, however, can be sheeted back to John Howard,

    Stupid fuckhead.

  25. Stupid fuckhead.

    Such depth of analysis, such soaring intellect, such profundity….

    Vintage Catallaxy…..that’s why I love it here…..

    :-)

  26. Now that I’ve dealt with John Howard, on to Numbers’ batshit-crazy-baying-at-the-moon claim:

    If one asylum seeker Filipino 457 visa holder , or of any race drowned in a desperate an attempt to seek refuge take the job of an Australian in Australia, that is one too many Filipinos on a 457 visa. The responsibility for the drownings issuing of 457 visas, however, can be sheeted back to John Howard

    FIFY

  27. Such depth of analysis, such soaring intellect, such profundity….

    I’m a touch more forthright in expressing my distaste for JoHo, but doan you try to tell us you doan share my sentiment.
    I put it a tad more bluntly than you perhaps, but you agree I’m a soaring intellect, oozing profundity. ;)

  28. Given your experience in pubs, you’d be a lay down misere for this.
    I’m not sure if Philippine nationality is a prerequisite.

  29. I’ve dealt with them. They aren’t too bad, though expensive and amateurish. Consequently they’ve supplied about 1/4 of the product to me that they could have. They’re not really much use for pub staff.
    There’s better operators around.
    On the iron-in-the-fire basis I’ll probably use ‘em again one day.

  30. Mk50 of Brisbane, Henchman to the VRWC

    My, such desperate wriggling by our racist pet stalinist!

    It’s amusing how the racist scum is saying that Rudd changing a successful Howardian policy (which stopped transnational people smuggling gangs and therefore the deaths at sea) so that by Rudd’s own claims his changed policy killed 4,200 people is all Howards fault!

    Because shut up, ALP good no matter how much they steal or how many they kill.

    Infantile does not even begin to describe how hilariously immature such bigoted racist maunderings are. Even when Rudd publicly claimed the responsibility for the 4,200 his policy change killed, Numbers says no, it was Howard’s fault.

    You could make this sewage up.

  31. You could make this sewage up.</blockquote

    Agro, obviously an expert in producing sewage on line, speaks with authority.

  32. The responsibility for the drownings, however, can be sheeted back to John Howard

    Well that’s George Bush off the hook for that one anyway!

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