What comes from listening to your enemies and not your friends

Given the star studded cast here at Catallaxy, I am almost embarrassed to mention that I found my way into The Australian this morning, but there you are. It’s a story by Christian Kerr on the various kites that were flown in advance of the budget [mixed metaphor alert] to test the waters. Here is the relevant passage from the complete story:

An obsession with kite-flying and budget cosmetics has left the government reeling in the wake of the worst received economic statement in two decades, experts say. . . .

RMIT University economist Steve Kates said that hit was harder than it could have been because of “strangely muted” messaging from the government in its first months in power.

“What they needed to do was sit down and talk about the structure of the budget and the looming deficits right away,” Dr Kates said.

He said voters would have understood the need for cuts if they knew about “landmines” left behind by the Gillard government.

“They didn’t make the case about the state of the economy,” he said. “They left themselves ­extremely vulnerable.”

He said the release of the audit commission report was left too late, meaning its recommen­dations were lost among budget speculation.

The thing about the budget is that not one person came out and said, “that’s nailed it; just what we needed”. It has been disappointment all round, a gift to Labor. It is a major question where to lay blame for this screw up of a budget. It didn’t go anywhere near addressing the problems that needed to be addressed, it’s a mish mash of policies that are defensible but only barely, and the political side has been atrocious. Reading Martin Parkinson’s comments both yesterday on the budget and today on superannuation reminds me the extent to which Joe Hockey was led around by Treasury. This was Martin Parkinson yesterday:

The Australian public needs to know that the nation faces a challenge and a tough budget was necessary, Treasury Secretary Martin Parkinson says.

Dr Parkinson said while it was not his role to comment on specific government policies, Australians “deserve” to know there is a challenge ahead.

“It’s within my responsibility as Treasury secretary to say to the community we do have to actually take this seriously to start to address the issue,” Dr Parkinson told a business lunch in Sydney on Tuesday.

“It is (a challenge) that if we start today to take sensible decisions, particularly those that are essentially structural policy changes that take place over time, we’ll be in a much better situation.

“Otherwise we’re banking the house on 33 years of uninterrupted economic growth and there’s no precedent for that.

“We’re banking on another 10 years of fiscal drag and … that has quite significant regressive impacts.”

Parkinson should have gone on Day One. Instead, a Labor man to his back teeth, he has led this government down a primrose path and into a wilderness of policies only a Keynesian could think would make a significant difference and even then, ones no Labor government would touch. Where were Hockey’s political instincts, never mind his economic judgment, when all this advice was being put to him? Doesn’t Joe read Catallaxy, and if not, why not?

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30 Responses to What comes from listening to your enemies and not your friends

  1. Steve D

    With hindsight (mine, not their’s – they should have known), Abbott and the LNP should have gone into the the election with no promises other than to do what is necessary to fix the mess. No promises about upping the tax intake, maintaining the ALP’s unfunded promises, or specific quarantining of any corporate or individual welfare.

    The platform should have been “If you are serious about fixing the country, then vote for us and prepare for some medicine; otherwise you may as well continue to drink the ALP kool aid”.

    Then if they won, they could have all that is necessary, and if they lost then they would still have their principles. Given the ALP was prepared to promise the world in the knowledge that they were probably smashed anyway, it may have steeled enough of the electorate to put Government in safe hands and accept the surgery.

    As it is the LNP just annoy those of us who wanted more while not gaining anyone who would have not voted towards the left of them anyway.

  2. Alf

    Because even a buffoon like Hockey shies away from the lunatic fringe.

    Because he gets bored with the same 30 or 40 people commenting on the same 4 or 5 people’s opinions every few hours.

    Because someone here would probably have told him to ‘fuck off’.

    Dunno Steve, there are lots of possibilities.

  3. Token

    Reading Martin Parkinson’s comments both yesterday on the budget and today on superannuation reminds me the extent to which Joe Hockey was led around by Treasury…

    Wow, did Hockey & coy really listen to the sages who created the Mining Tax?


  4. .

    #1313974, posted on May 21, 2014 at 4:05 pm
    Because even a buffoon like Hockey shies away from the lunatic fringe.

    Because he gets bored with the same 30 or 40 people commenting on the same 4 or 5 people’s opinions every few hours.

    Because someone here would probably have told him to ‘fuck off’.

    Dunno Steve, there are lots of possibilities.

    …and look where it got them. 45:55 on 2PP in the polls, wiped out with Shorten as PM if the election were held this Saturday.

    They really ought to listen to us…then fuck right off.

  5. Alfonso

    Joe’s a massive wet, Tone’s a big govt social conservative…you expected what else from LibLab.

  6. H B Bear

    Can anybody tell me why Parkinson is still there?

  7. egg_

    “you expected what else from LibLab.”

    Cuts, cuts, cuts…

    Nothing much else.

  8. I think Steve is right. What angers me is that the LNP treated voters as idiots who couldn’t understand the big issues – like children who have to be hustled out of the room when the grown-ups were talking, and then fed little snippets, like ‘Mummy and I were thinking about whether it would be a good idea for us to have a puppy in the house’, to see if we said, ‘YAAAAAY!’ or, ‘No way, I want a kitten.’

    Only in this case, it was ‘Mummy and I were thinking about what it would be like if everyone who was bulk-billed had to pay $7 to go to the doctor’.

    I know we hoped to have an adult government, but that also meant ‘a government that treated us like adults.’

  9. incoherent rambler

    Doesn’t Joe read Catallaxy, and if not, why not?

    No, Joe just does morning TV.

    Besides as treasurer he has done everything that PM Credlin has asked.

    The problem in the polls is simple. That is what happens when you pander to your enemies (who won’t vote for you anyway) and then deceive your political base.

    Joe and Credlin have lost the LNP faithful.

  10. Infidel Tiger

    Cory Bernardi has given the perfect budget reply speech.

  11. 1234

    Bullshit Steve. You can’t continue to be an apologist. To say that Hockey was lead around by Treasury is a lame excuse. Its a Abbott Hockey budget and they own it, both the content and selling. Just face it, these two were B grade ministers at the fag end of the Howard government and their performance will not improve – Mr “people skills” and a failed salesman for work choices.

  12. Clive 4 Evah

    You could bet your last seven dollars that none of these budget problems would be evident if Clive was in charge of the nation’s finances.

    The man is a visionary.

  13. The man is a visionary.

    I work in mental health, and I agree with you. Clive’s definitely a visionary. There are drugs that could help him, but I doubt whether he would take them.

  14. egg_

    “Cory Bernardi has given the perfect budget reply speech.”


  15. Simon

    Just my opinion but I’d say that the polling is a direct result of the epic “We Will Fix It” mantra they have kept up for about three years relating to the economy. If these guys were serious they would have been relishing the chance to get in sort it out just like they did with the boats. It just went eerily quiet “budgetwise” for 8 months or so like they were working on some Herculean task and then… nothing. A few minor cuts to crap nobody cared about and a few tax/payment increases aimed at one or two members of the community. If the ALP had it mostly right in terms of stupid policies we had to have then why did we need change government when we could have just changed treasurers?

  16. egg_

    No, Joe just does morning TV.

    And butterfly chasing…

  17. outsider

    When you are the leadership, the responsibility of it all is yours and yours alone, insofar as the power resides in your office. Who comes, who stays, what gets said when and by whom.

    They started out with no communication whatsoever for late 2013, perhaps to convey the notion that the govt was busy ferretting away on policy devt, calm and competent…but what happened? The vacuum was filled with the clamour of expert-at-communications leftists, out working hard at shaping public opinion on all the key issues. They set the expectations and the agenda, in the near-total absence of voices to the contrary.

    It all looks bad because it is bad; and the Aust electorate saw this for what it was, at least in soft focus. Modern politics requires engaging connection with the electorate, to be done with charm and wit, explaining the econ facts of life to all and sundry. Engage. Inform. Debate. Persuade. Keep the policy consistent too. Don’t dither and leave it all to IPA figures.

  18. Eddystone

    Here’s Cory’s letter.


    I have noticed that the bulk of the new Medicare co-payment goes towards a medical research fund. Why doesn’t this revenue go to paying off our sovereign debt?
    That’s a valid point, considering the enormous level of debt that the Labor Party left the country with after just six years in government. Personally, I would prefer to see the co-payment directed to debt reduction but the government decided otherwise.

    Why wasn’t more funding cut from the ABC?
    An excellent question. As our budget is in a parlous state, the government needs to consider reining in expenditure across the board.

    Yet the ABC has seen a measly 1% reduction in their budget of over $1 billion a year. If it was up to me I’d limit the ABC’s public funding to current radio stations and two television channels. Other than that they should have to compete on commercial terms. This could save the taxpayer hundreds of millions of dollars per year.

    Why is the Coalition introducing a debt levy when it promised no new taxes?
    As I’ve written before, the way to reduce our debt is to shrink the size of government while growing the economy. The best way to do this is to reduce taxes across the board.

    But for better or worse, this is what the government decided. What Australians can do is make sure that this does in fact remain a temporary levy.

    Isn’t this six month exclusion period for under 30s from Newstart unfair to those who have just lost their job?
    Encouraging young Australians to help themselves, to take opportunities and build a better life for their families is more rewarding for all involved rather than letting young people get stuck in a cycle of welfare dependency.

    For the unemployed who are fully able to work, those first few months without a job are crucial. We need to make sure they are fully motivated to get back into work as soon as possible.

    Why is it that some climate change related bodies have been abolished while others have not?
    It’s good news that the Budget abolishes the Australian Renewable Energy Agency and that the Government is still committed to abolishing the Climate Change Authority and the Clean Energy Finance Corporation. There is probably scope and justification to abolish more of these bodies established through AGW alarmism but this is a good start.

    Why are you targeting families with your changes to Family Tax Benefit B?
    Family Tax Benefit was designed to help out those families on a single income and the income threshold for support has been lowered. Personally, I think a better way of supporting families is through the tax system- income splitting, tax free thresholds and so forth.
    Taking taxes and then giving it back (minus a bureaucracy fee) seems inefficient to me.

    I read that the foreign aid budget won’t be increased over the forward estimates. As a wealthy country, shouldn’t Australia be contributing more to help the world’s poor?
    Australia does have an international role to play in offering assistance to those who need help.
    But this has to be considered in the context of our national interest and the government’s duty to its own citizens. Why should we pay billions of dollars in borrowed money to other nations when we have pressing issues at home?

    Why is the pension age being raised to 70 and when will this take effect?
    With Australians living longer, the age we work until must increase. Pension eligibility will rise up to 70 years of age in the year 2035. Everyone born before 1965 will not be affected by this latest change.
    If we do not make these changes Australia will be setting itself up to have an unsustainable welfare system.

    Why is the government budgeting to spend $90 million over two years to find Malaysian Airlines flight MH370?
    I have no idea.

  19. Vicki

    When the first “kites” started to fly, I fleetingly thought that this was some devious scheme by enemies within the Party to set Abbott up for replacement. But since Joe seems intent on “owning” the policies, it is unlike to be him.

    It’s as though after the election Abbott & Hockey just went into a huddle and lost the political thread.

  20. Yohan

    Remember when the kite was first flown for the deficit levy, Shorten actually said on TV that he thought it was just smoke and mirrors and that this was not going to be in the budget. Within 2 days that attitude stopped when Labor actuallyrealised the LNP were serious. They could not believe their luck.

  21. sabrina

    It is time to volunteer for Parkinson’s replacement, Steve. I am sure you qualify.

  22. Yohan

    The problem with Joe and Tony is what we have really known all along, that despite the small government rhetoric, they really both are Wets who are economically ignorant. Steve Kates I am with you, hoping for hope, but we have to accept reality here.

    Because they have no economic knowledge of their own, they are prepared to take the advice of the Keynesian Kool-Aid drinkers in Treasury. Consider this fact…. it is now over 5 years since the GFC, and Hockey is still saying the economy is fragile and we can’t cut government spending lest it stop the recovery. Its been 5 fucking years, as we are still repeating these Keynesian mantras.

    The real reason why there has been no economic recovery, is that government spending has crowded out, and commandeered, the scarce resources and capital that are needed to make a sustained recovery. We need to cut government spending, and reduce tax rates to spur the economy. Paradoxically this will actually lead to higher tax revenues down the road because of the increase in capital accumulation and rising productivity.

    Its pretty clear from reading Hockey’s statements and interviews that this is just not going to happen. We are going to muddle though the next few years will an economy that will be improving not because of, but in spite of, the actions of this government. This will make re-election in 2016 much difficult and gives the Liars a chance to promise the ‘change’ that the middle class is expecting in their standard of living.

  23. lem

    Right now, Abbott and co could do with some friends right now. Pity for them.

  24. handjive

    Quote Eddystone #1314074, posted on May 21, 2014 at 5:56 pm:
    “Here’s Cory’s letter, re: climate change,

    “There is probably scope and justification to abolish more of these bodies established through AGW alarmism but this is a good start.”

    Applying that logic, everyone could only pay $1 to visit the doctor, blood tests etc.
    It’s not $7.00, but it’s a good start.
    Rhetorical Questions:
    Money spent on Direct Action will stop how much climate change?
    Money spent on Direct Action will pay for how many doctor visits?

  25. viva

    I think Steve is right.

    Maybe he is – but not so long ago he was being quite complimentary about the budget. What changed?

  26. candy

    I’ve noticed all the major economists change from almost day to day in their assessment of the budget.

    For someone like me, it makes it hard to comprehend when they vacillate so much.

  27. Robert O.

    The only way for Australia to get out of this fiscal mess is to take the scalpel to government spending, particularly the incredible amount spent on duplication by both Commonwealth and State governments .
    Governments do not produce income, they only re-distribute the income produced by the private sector and people like Dr. Parkinson seem to forget this. Look at some examples of totally wasted government spending: PM Rudd’s trip to Copenhagen with a 100 odd advisors, the cost of a temporary seat on the UN Security council in bribes for votes-didn’t stop the Russians from invading the Ukraine, trips of $70,000 to Europe by retiring members Crean and Combet , investment in pie in the sky schemes, expenditure in the carbon scams and the like. Naturally you cannot make changes immediately, they have to done gradually or it will be disruptive to the economy and one always has to remember the multiplier effect whereby money which is totally wasted in one sense provides income for others by default. Take a hypothetical party meeting at Ayers Rock, the costs for accommodation and travel and the publicity are positive for the economy, whereas other outcomes would be pretty limited and perhaps Alice Springs would give members some real experience in the problems of a remote location and its social problems.

  28. Luke

    This Liberal government have proven to be duds. The message to the federal Public service is carry on as usual. Waste, expand, duplicate and upscale.

  29. Running a poll of the Lazy party’s performance it’s not surprising that 80% don’t like it. 30% of them vote for a living, 50% wanted them to cut harder. The remaining 20% don’t have any idea and wouldn’t turn up of they didn’t have to vote.

    The answer is to vote LDP wherever you can and Bob Day in the senate.

  30. Thomas Esmond Knox

    At approximately $14,000 per capita there is obviously no shortage of spending in the Budget. 71% of expenditure is on “Social Security & Welfare”, “Health” and “Other Purposes”.

    The outrage expressed by some critics seems excessive to me since the Budget is not a revolutionary change on last year’s Budget when the same critics were silent.

    No doubt if Shorty Shorten was bringing this Budget forward, they would be silent this year.

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