“The new mediocre …”

I have an op-ed in the AFR this morning that talks about Australia’s fiscal strategy over the past ten years and the need for a return to “the old-time fiscal religion”.

Right now politicians tax as much as they think they can get away with, spend as much as they can, and borrow to make up the difference.

Putting the budget onto automatic pilot with a debt and deficit trajectory and then borrowing to pay their own salaries is symptomatic of the new mediocre.

As they say in the classics – read the whole thing (ungated version here).

This entry was posted in Budget, Economics and economy, Taxation. Bookmark the permalink.

19 Responses to “The new mediocre …”

  1. Dr Faustus

    It’s not entirely fair to blame the government – of either persuasion – for this state of affairs. All politicians of all parties are to blame. […] Putting the budget onto automatic pilot with a debt and deficit trajectory and then borrowing to pay their own salaries is symptomatic of the new mediocre.

    Amen to that.

    Morrison’s omnibus bill is designed to deliver savings intended to reduce Government debt by $30 billion over 10 years – so not exactly a complete solution to arresting, let alone clearing, the current ~$430 billion in Commonwealth net borrowings.

    Even this mediocre objective is stalled in the Turd Farm; grounded on the rocks of politically untouchable legacy welfare/environmental programs.

  2. King Koala

    Every time I try and read the article on my mobile I get some bullshit about subscribing. I have no desire to prop up fake news.

  3. H B Bear

    Australia’s economic history is basically sleepwalking along until either an international currency or debt market crises event jolts some temporary reality into the place. It lasts only until the next commodity market cycle allows normal service to resume.

  4. Roger

    Australia’s economic history is basically sleepwalking along until either an international currency or debt market crises event jolts some temporary reality into the place. It lasts only until the next commodity market cycle allows normal service to resume.

    The Lucky Country – lucky because it has prospered despite and not because of its generally inept political leadership.

  5. Bruce of Newcastle

    Sorry Sinc. Nothing you can say will get me to subscribe to the AFR. I used to read it but I now prefer fiction, which is more realistic (your article excepted).

    On the other hand it’d be nice if David Rowe could get a gig with a decent paper. He’s wasted at Fairfax.

  6. BoyfromTottenham

    Yes, Sinc, and now the gummint wants us taxpayers to pick up more of the tab for its dumb LRET policy by authorising the Green Finance watchamacallit to lend taxpayers money to the impoverished base load power generators to build the new and more efficient coal fired power stations that they would have financed themselves if the LRET hadn’t destroyed their ability to make a profit in the first place? Are we living in Wonderland with Alice?

  7. Leo G

    “Our tax system exists to fund the decent services in health, education, aged care, and other services that Australians legitimately expect and are entitled to receive.”

    Does that mean our tax system exists to fund entitlements, which are justified by the taxes paid by Australians as whole?
    If so, doesn’t that imply a limit on the entitlement, or do government borrowings also justify entitlement?

  8. Sinclair Davidson

    David Rowe could get a gig

    You mean David Crowe? He has been at The Australian for a few years now.

  9. Sinclair Davidson

    Nothing you can say will get me to subscribe to the AFR

    Read the ungated version then.

  10. Combine Dave

    Does that mean our tax system exists to fund entitlements, which are justified by the taxes paid by Australians as whole?

    That does appear to be modern Australian culture yes.

    If so, doesn’t that imply a limit on the entitlement, or do government borrowings also justify entitlement?

    I believe the limit to entitlement is set by a compact between the political elite and the voters.

    That limit is – “Gimme! Gimmie! Gimmie!

    The level of tax actually paid or borrowings required to fund said entitlements don’t come into it.

  11. Leo G

    That limit is – “Gimme! Gimmie! Gimmie!

    It’s much like the Melbourne/Sydney/Brisbane housing market then.

  12. Jannie

    Politicians give themselves wriggle room by arguing that the budget should be balanced, on average, over the cycle.

    Wayne Swan sure did some wriggling. I lost count of how many times he announced a budget surplus.

  13. RobK

    “Politicians give themselves wriggle room by arguing that the budget should be balanced, on average, over the cycle.”

    That works for a little while. Excess means you’ve taken to much.
    Prolonged debt/deficit makes you wonder just what is the meaning of the word “cycle” in this context. Cycle=BS.

  14. RobK

    A great article, thanks Sinc.

  15. Squirrel

    “Many Australians subscribe to what the 1986 economics laureate James Buchanan described as being “the old-time fiscal religion”. ”

    Perhaps, but many, many others went into a righteous meltdown at the prospect of a Medicare co-payment which would have been about the same as they pay for the sugary drinks that they hold in one hand, while they wander around the shopping malls of the nation with a smartphone in the other hand. So the ugly truth is that we get the gutless, mediocre political temporizing which the majority vote for.

  16. B Shaw

    A really good article.
    I particularly like that second paragraph.

    The words “debt spiralling out of control” make me shudder.

  17. Occupy Centrelink

    “Re-legislating the debt ceiling should be a priority. ”



    And perhaps some kind of constitutional limit to taxation. An idea proposed by the League of Rights folks many years ago.

  18. Cannibal

    I’ve been trying to look up the RBA website for notes on issue, but it seems to be well hidden these days.
    Sign of our times?

  19. B Shaw

    I’ve come back to this article. I meant to add to my comment that this is pleasing writing – the good schoolmaster style, not unlike Geoffrey Blainey’s.

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