The Budget another saga of government waste

My piece in the Herald Sun this morning

IN this week’s federal Budget, the Coalition implemented policies established in the Rudd/Gillard years.

The expansions in health, education and welfare budgets — now comprising two thirds of spending — were confirmed. Over the next four years, annual spending will increase by $50 billion to $340 billion — a levy on the average non-government worker of more than $30,000 a year.

Similarly there is an acquiescence of the cost impositions from renewable energy policy, including attempts to lighten these with subsidies to the “needy” and gas purchases to prevent the collapse of South Australia’s renewable energy reliant economy.

Two major expenditure initiatives: Gonski education funding and the National Disability Insurance Scheme are now to be financed with tax hikes, notably through the banks (which will pass them on to customers) and the Medicare levy. These the Treasurer calls a “Senate tax” because the Senate refused to accept the government’s preferred compensatory spending cuts.

Education spending is often an investment in the future, but in Australia falling levels of literacy and numeracy have accompanied vastly greater outlays for each pupil. The increased expenditure is going to teachers whose unions protect underperformers and to educational bureaucracies focused on politically correct measures such as “Safe Schools” and teaching oriented away from core subjects.

In the case of people with disabilities, sympathy drives funding increases. Although the NDIS has “chronic and degenerative” defining its eligibility boundaries, costs will rise when these are eroded in future years as new compassion agendas arise.

The Coalition is also setting its own wasteful expenditures.

With recent closures including Hazelwood in Victoria’s east, electricity wholesale prices have trebled, boosting customers’ costs by $14 billion a year since 2015. Two white elephants in the Budget are an $8.4 billion Melbourne-Brisbane rail link and the $2 billion-plus Snowy hydro storage scheme. Hopefully these will prove to be cosmetic announcements that disappear in the next wash.

Also announced is a new Sydney airport at $5 billion. In a damning indictment of government red tape, no private-sector investor would take that project’s development risk in view of the labyrinth of regulatory hurdles it will face.

Inherited from the Rudd/Gillard years are energy regulations, dominated by measures to replace low-cost coal-generated electricity with subsidised renewables. Though imposing little cost initially, the compounding effects of these subsidies is now finally driving low-cost coal from the market. With recent closures including Hazelwood in Victoria’s east, electricity wholesale prices have trebled, boosting customers’ costs by $14 billion a year since 2015. Costs will increase further under the current program and will be augmented by renewables requiring more network spending to compensate for their poor reliability. Cost increases will be further compounded by state governments preventing new gas supplies.

The Commonwealth has two major inquiries into energy under way but both are designed to suggest ways of accelerating the displacement of commercially provided electricity by renewables.

All of these policies inflict a toll on living standards. Diversion of income to cover government spending and regulatory costs reduces workers’ pay packets. Such measures also cannibalise spending that brings increased living standards down the track from investment and skill upgrades.

Neither major party is willing or able to cut spending and regulations. Our sad choice is between a Coalition undermining the nation’s wealth with Labor-lite policies or an ALP which would go even further.

 

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26 Responses to The Budget another saga of government waste

  1. stackja

    Voters have to decide what is to happen to Australia.
    Choice is getting clearer by day. Progress or ruin?

  2. gbees

    @stackja … some might say ruin (LNP) or obliteration (ALP/Greens)?

  3. Dr Fred Lenin

    The present pack of political career bludgers should be decimated in the old Roman style , get the mussos to behead every tenth one and keep doing it ten times untill they are all go e ,the lawn outside parliament house would be a good venue state pollies could be bussed in . I say mussos because they are experienced at beheading and seem to enjoy it ,no racist comment meant triggsy muslims are NOT a race ,they come in all colours I know this would deter career politics ,but look at the bloody mess it has got us into .

  4. Rossini

    When there are more net takers than givers……too keep your public funded seat you obviously pander to
    those who are in the majority !!!!!!!!

  5. Zulu Kilo Two Alpha

    When there are more net takers than givers……too keep your public funded seat you obviously pander to
    those who are in the majority !!!!!!!!

    It’s been said here , before, quite tersely.

    “If the monkeys can vote for free bananas, they aren’t going to climb the tree.”

  6. MAGB

    The real scandal is the lack of media attention to the energy price catastrophe.

  7. Siltstone

    ZK2A “If the monkeys can vote for free bananas, they aren’t going to climb the tree.”

    Oscar Wilde: I wish I had said that.
    James McNeill Whistler: You will, Oscar, you will.

  8. Texas Jack

    It’s all true Alan. Nonetheless, I notice some people still waste their time handing out how-to-vote paraphernalia for the Turnbull Party on Election Day. Duped, or convincing themselves they’re backing something worth supporting, they merely help entrench a kind of perpetual Rudd-Gillard madness writ-large in the nation’s books and economic prospects and now too deeply embedded in community expectations to fix at any sensible political price without a recession or debt crisis taking hold. That there are still people turning up at Liberal Party meetings is hard to believe. Those attendees may as well simply join the ALP.

  9. Faye

    Is there something wrong with me? I’m not feeling excited.
    On the day he took over, Malcolm said (via my shorthand) he would provide the economic leadership that we needed. He also was going to provide the economic confidence that business needs.
    He would explain the challenges and seize the opportunities. The country needed a leader who respected the people’s intelligence and who was able to explain the complex issues. Slogans were out and advocacy was in.
    If Tony Abbott remained Prime Minister, he would lose to Mr Shorten. Thirty Newspolls in a row had been lost. The Liberal Party has the right values, free enterprise, individual initiative, freedom – ingredients of a successful agile economy. Tony failed to excite the Australian people and give them a vision for the future.
    Malcolm would restore traditional Cabinet government, no more policy on the run and no more captain’s calls but there was to be lots of consultation. There was great wisdom in the government. He wants to return to John Howard’s style of government.
    He admitted that it was awkward that the Canning by-election was a week away but this was an occasion for tough calls and tough decisions. If we don’t act, these problems will roll on and on. Changing leadership will improve our prospects in Canning. This is for the country’s sake, the Government’s sake, the Party’s sake.
    He pledged to continue the Liberal values – good government, sound policies, economic confidence creating jobs and prosperity.
    Malcolm, you really think you are better than you really are. Okay you’ve had your go, you failed! Your recent Budget has done none of the above. Get out of our lives so we can clear the air and once again feel excited with a vision for the future.

  10. Chase

    stackja
    #2378675, posted on May 12, 2017 at 4:53 pm
    Voters have to decide what is to happen to Australia.
    Choice is getting clearer by day. Progress or ruin?

    Voters will be sending us on a direct route to ruin.

    The Australian people are blinded by the immediate and​ the​ extreme short-term.

    With the broad community rife with a high reliance on free money handouts, a prevalence of a lack of understanding of economics and the economy, and a widespread inability for independent self-thought​, Australia has a very long ​journey ahead before the current state of affairs are ​addressed.

    The Australian people will not change or will not drive change. Australians are only followers.

    A Trump style leader is needed.

    Until then, more free bananas.

  11. jupes

    … dominated by measures to replace low-cost coal-generated electricity with subsidised renewables.

    A government should do no harm.

    A government should make decisions in the national interest.

    The Turnbull government must be destroyed.

  12. Habib

    We really need a recall provision. Even with draconian “wrongful dismissal” laws companies can eventually shed a feeble-minded degenerate that paws and insults the customers and diddles the till, why the hell can’t we? These tapeworms are our employees.

  13. Howard Hill

    The real scandal is the lack of media attention to anything important.

    FIFY!

  14. Leo G

    A government should make decisions in the national interest.

    We have foolishly chosen Internationalists to represent us in government.

    “If a man does not keep pace with his companions, perhaps it is because he hears a different drummer. Let him step to the music which he hears, however measured or far away.” – Henry David Thoreau

  15. Rafe

    Re standard of reporting and comment in the MSM.
    So much for ever-increasing funds for education, boosting retention rates to year 12 and 30% plus going on to tertiary.

  16. Squirrel

    The galloping growth in the cost of government programs is absolutely unsustainable, and stands in stark contrast to what is happening to costs in (at least some parts of) the private sector – perhaps we could sub-contract the whole show (or large parts of it) to the likes of Amazon and Aldi.

  17. Zipster the leftoid torturemeister

    The real scandal is the lack of media attention to the energy price catastrophe.

    The MSM is the opposition party.

  18. mareeS

    Ruin, by a length, if I could be bothered to place a bet on this clusterfuck.

    I never thought to see Australia in the grasp of such destructive cretins.

    My faith in this country, my only home, is gone. It is inhabited and governed by clowns and vandals. Sure, there are lots of sensible people too, but the hammer of power isn’t with sensible people, it’s in the hands of the el destructos.

    Basically, I have given up on the joint. Fortunately we are well set through a life of talent, good business and my sensible management, which will see our kids sorted for a few decades. But the bludger set can bugger off and wallow in their misery. A pox on them.

  19. jupes

    But the bludger set can bugger off and wallow in their misery.

    No maree. The bludgers will continue to bludge off you until you run out of money.

    Sure, there are lots of sensible people too, but the hammer of power isn’t with sensible people, it’s in the hands of the el destructos.

    The problem is that the sensible people are a very small minority in this country. The vast majority want the government to not only give them free stuff, but to solve every problem they have.

    That’s why we have the appalling Turnbull government. We elected them.

  20. mareeS

    Jupes, other people elected this bunch of morons. My vote apparently counted for nil. Let them deal with the consequences.

    In the meantime, sensible people have quarantined themselves. Sure, there will be fallout on all of us, but having sold our businesses and retired into SMSFland with lots of wriggle room and adequate provision for the offspring, we are just going to sit on the sidelines and see how badly Australia can damage itself.

    I have always loved this country. My husband served it under arms. But I am not seeing a lot to love or fight for at present, particularly because the national IQ seems to be about -30 when it comes to the economy and the national discourse.

  21. Sparkx

    The Turnbull government must be destroyed.

    Methinks Maocolm is having a pretty good crack at doing just that.

  22. Tel

    The problem is that the sensible people are a very small minority in this country. The vast majority want the government to not only give them free stuff, but to solve every problem they have.

    This was not the case when Abbott got elected with a thumping majority. He campaigned on bringing the debt under control, he took that to the voters and they responded very favorably.

    What Abbott taught those voters was “fooled you once”.

    That’s why we have the appalling Turnbull government. We elected them.

    The options were Turnbull or Shorten, both had forgotten about the “budget emergency” and neither campaigned on any spending controls. The voters correctly determined that Turnbull was narrowly the better option, but with only a microscopic majority he was unlikely to do much damage.

    If you don’t get the option of a good government, best to have a deadlocked government which is a harm minimization strategy.

  23. Alan Moran

    “The problem is that the sensible people are a very small minority in this country. The vast majority want the government to not only give them free stuff, but to solve every problem they have.”

    Tel says, “This was not the case when Abbott got elected with a thumping majority. He campaigned on bringing the debt under control, he took that to the voters and they responded very favorably.”

    I take a more pessimistic line. People vote for measures that give them free stuff and will continue to do so until it runs out. This can lead to a steady impoverishment and go on for decade. Or it might be abruptly terminated if the electorate believes that we need a correction. Every so often that happens as with Howard and Abbott. But once in office and having corrected the previous disasters, reformers are forced to give more free stuff.

    It seems this is inevitable once people have discovered that by voting they can get things free they would otherwise need to work for. Some means is required to place constitutional limits on the excesses, perhaps by having a weighted vote so that the amount of money spent on free stuff is determined by those with the money.

  24. Garry

    A welfare bludger couldn’t care less what happens to the economy or the taxpayers that support it. They assume that whatever happens the largess will continue. And they are probably correct in this assumption. Regardless of outcome the largess will continue simply because they are allowed to vote and as the economy contracts there will be even more of them to skew the political landscape further to the left!

  25. H.S.Grant

    Alan,the only way to protect citizens from vote buying politicians is by a balanced budget outside of war,amendment to the constitution.Neither party will ever support this.

  26. Pingback: The Budget another saga of government waste | Catallaxy Files | Cranky Old Crow

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