Malcolm Turnbull on the budget problem

Malcolm Turnbull spoke the Brisbane Club today:

The Budget problem

In September 2013 the Coalition Government inherited a Federal Budget that had been heavily in deficit for six years and was projected to remain that way for at least another decade.

The immediate reason for the deterioration from the Budget position left behind by the Howard Government was not difficult to identify.  If we compare Peter Costello’s final budget in 2007-08 to Wayne Swan’s final Budget in 2013-14, we see that over Labor’s six years in office:

?       Spending rose from $272 billion to $411 billion – an increase of $139 billion.

?       Revenue rose from $295 billion to $363 billion – an increase of $68 billion.

So under Labor, for every $1 in new revenue, the Government committed to $2 of new spending.

Dire as the recent past appeared, the near future looked worse.  Labor had committed to several high-profile promises that if delivered would vastly increase outlays over the next decade, with much of their cost conveniently hidden beyond the Budget’s four-year forward estimates window.

Kevin Rudd’s 2010 deal with the states to fund hospitals, Julia Gillard’s 2013 ‘Gonski’ reforms to schools funding, and the National Disabilities Insurance Scheme (NDIS) are the iconic examples.

According to the Parliamentary Budget Office, these three types of spending will have a joint annual cost of $73 billion by 2023-24 (equal to 14 per cent of total Budget outlays).

However well intentioned the policy goals – and the case for the NDIS, to take one example, is surely compelling – these heroic commitments were made just as a flood tide of revenue from the resources boom was ebbing away.  Now those promises stand out, like ships stuck on the mud, mocking the previous Government’s naivete for making them and our credulity for believing there was enough revenue to pay for it all.

But it wasn’t just new programmes. Spending on existing social payments was also projected to surge, in many cases reflecting wider eligibility, more generous rates or the inclusion of new services.  Consider these forecasts from the Parliamentary Budget Office:

?       In 2003-04, at the start of the resources boom, the age pension cost $18 billion.  Last year we spent $39 billion.  A decade from now the cost of the age pension will be $64 billion.  Yes, there are more elderly Australians – but that is still a huge increase.

?       In 2003-04, the Government spent $1.5 billion on childcare and parental leave.  Last year we spent $7 billion.  A decade from now, we will spend $18 billion.  That twelve-fold increase is despite modest growth in the cohort of children with working parents.

?       In 2003-04, the Government spent $8 billion on Medicare.  Last year we spent $19 billion.  A decade from now, we will spend $34 billion.

How did spending rise so quickly, with even larger increases in prospect?  Why did Labor commit to costly new programs plainly beyond the capacity of the Budget to support without large tax increases?

How is it the International Monetary Fund, echoing our own Treasury,  judges we currently have a structural Budget deficit – that is, a deficit after adjusting to remove the effects of the economic cycle – of $48 billion or 3 per cent of GDP despite our having avoided recession during the GFC and enjoying our most sustained period of favourable terms of trade in history?

Essentially, because from 2003-04 to 2013-14 the Budget received an unprecedented windfall of roughly $460 billion, mostly on the revenue side, during the initial phase of the resources boom. Spending and tax cut commitments rose rapidly, at first in line with the windfall, and and then under Labor in excess of it.

Treasurer Wayne Swan, speaking a language just steps away from the angry class warfare of a century earlier, condemned ‘greedy billionaires’ and extolled the merits of new spending initiatives to ‘spread the benefits of the boom’ (forgetting the exchange rate had already done this).  A complacent optimism had washed over us like a comforting warm bath.

Unlike all previous booms this boom was going to persist.  The Budget mused about prosperity underwritten by resources for ‘an extended period of time’. This time would be different.

Except that it wasn’t.

The nearly half-trillion dollar Budget windfall from the decade-long commodity price rally proved temporary, like all such windfalls, and ended emphatically with dramatic slumps in coal prices in 2013 and iron ore prices in 2014.  But as Chris Richardson at Deloitte Access Economics points out, the commitments governments made during this period to income tax cuts or increased expenditure, all premised on revenues no longer being collected, are permanent.

Or as the Secretary to the Treasury, John Fraser, said recently, echoing his predecessor:

The reality is that Australia has spent its way to a structural budget problem. Government payments are growing faster than government revenues and without action, this trend will continue.

So we’ve been living beyond our means, and since 2008-09 we’ve been borrowing to fund the shortfall.  Far from tightening our belts, however, under Labor we made grand plans to live even further beyond our means in the near future.

The inevitable result is debt.  When the Howard Government lost office the Federal Government had $45 billion of cash at the bank (equal to 4 per cent of GDP).  Seven years later, we are in net debt to the tune of $245 billion (or 14 per cent of GDP).

If we allow this situation to continue we will put the security of every family and every business at risk.  The deficits continue, our debt and interest payments balloon – and all this at historically low interest rates. What happens when rates rise again, as they assuredly will?

When the global financial crisis struck in 2008 the fact that we had no net Government debt gave Labor virtually unlimited flexibility to respond with stimulus spending.  How will we be placed if there is another GFC-like episode but we have accumulated a mountain of public debt?

Labor’s position is that our debt is low compared to other advanced economies. What isn’t stated is that high debt levels are one reason those economies suffered during the GFC and have experienced so anaemic a recovery since.  Nor does it recognise that Australia is not like Europe or the US – we are a small economy dependent upon imported capital and exposed to massive external shocks.

Demographic change heightens these risks, as Treasury’s latest Intergenerational Report makes clear.  We know that as our population ages there will be fewer and fewer workers to support a swelling number of retirees.  Today there are 4.5 Australians aged 15 to 64 for each person aged 65 and over. In 2035 that ratio will be 3.2, and by 2055 it will be just  2.7. And it was 7.1 in 1970.

We know claims on pensions, aged care and health services are going to grow.  We could and should prepare by living within our means today.  But instead we are doing the opposite, passing onto our children not just the expense of supporting an army of retired baby boomers but also the cost of servicing the debt we ran up because we ignored the financial realities of our times.

Treasurer Joe Hockey’s  2014-15 Budget attempted to address these trends.  Evidently by doing so it disappointed many in the community.

A number of its most important measures, which would have generated savings over the forward estimates of more than $25 billion, have been unable to secure support from the Senate cross benches and have been abandoned or modified.

It is in no way correct to say that the 2014-15 Budget was a failure.  Many measures, amounting to a net saving over the forward estimates of $16 billion, have been passed.  But we clearly haven’t been able to achieve the degree of fiscal repair and reform that was and is needed.

Why have the Budget measures been such a battle?  At a mechanical, political level the answer is that Labor, the Greens and others in the Senate refuse to support them.  That is their right.

But it is to Labor’s enduring shame that as custodians of the Budget during a period when almost three quarters of the resources boom revenue windfall flooded in, they turned a starting point of $45 billion of cash into $245 billion in net debt by the time they left office.  In opposition, they then proceeded to block $25 billion of savings (including $5 billion they themselves originally proposed) while cynically and irresponsibly declining to offer a single alternative measure until the past week when they unveiled, perhaps predictably, a plan for higher taxes.

In the past fortnight, for the first time since the 2013 election, shadow treasurer Chris Bowen and assistant shadow treasurer Andrew Leigh have at least acknowledged there is a Budget deficit problem and promised an alternative plan.  We will see if they deliver.  The acid test will be whether Labor proposes a constructive alternative in the Budget-in-reply.

I hope they do.  We need an evidence-based, spin-free, fair dinkum debate about the Budget position and what we should do to fix it.  This May the spotlight will be on Bill Shorten and Chris Bowen as much as it is on Tony Abbott and Joe Hockey.

The more fundamental problem the 2014-15 Budget faced was that the public was not persuaded tough measures were necessary in the first place.

We – and I include myself and every member of the Government in this criticism – did not do a good enough job in explaining the scale of the fiscal problem the nation faces, and the urgency of taking corrective action.

In addition there was a deeply felt sense in much of the community that our proposed Budget measures were unfair to people on lower incomes when taken as a whole.

In my view the failure to effectively make the case for Budget repair was our biggest misstep, because it was a threshold we never crossed.

Once you’ve explained an issue often enough that people understand there is a genuine problem and “something” must be done, you can have an intelligent discussion about what that something might be – and just as importantly, your opponents will face public pressure to come up with their own “something” if they are not prepared to support yours.

But at least we have learned our lesson.  The Intergenerational Report released last week by Joe Hockey provides a solid platform from which to reboot the Budget debate, and educate the public about the need for action.

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108 Responses to Malcolm Turnbull on the budget problem

  1. Empire

    Bravo m’lord. Let’s begin with $1.2B p.a. over the forward estimates.

    Ultimatum Ultimo.

  2. Rabz

    We are in this mess purely because about half a million cockheads with the memory of goldfish were sick of little Johnny Howard and Smirky Smugness Costello – as well as being stupid enough to take that narcissistic little nonce Rudd at his word.

    Fiscal conservatism, indeed – it certainly does have a lot to answer for.

  3. Infidel Tiger

    His remarks on housing affordability were terrific.

    I could warm to him if he would take my counsel on certain matters he has difficulty with.

  4. Old School Conservative

    The May Budget is Hockey’s last chance saloon. He must put money into taxpayers’ pockets and defund all unnecessary expenditure.
    Not hard to find the means to achieve those ends, but do he and Abbott have the political will? I live in hope.

  5. Rodney

    In 1961 there were 80,000 invalid pensioners, and 1.9% unemployment.
    There are now 900,00 D.S. P. persons. Allowing for population growth there at least 600,000 persons who are unemployed and classified as disabled.
    Technological change means that the market value of unskilled labour is dropping all the time. Therefore the ranks of the D.S.P will expand accordingly.
    The chosen solution to this to expand the N.D.I.S. at great expense to patronise and manipulate the reclassified unemployed, employing at great expense otherwise unemployable graduates.
    It would be much cheaper and much kinder to abolish the minimum wage, and where necessary supplement lower incomes.
    It is an evil thing to price people out of jobs and then throw them on the scrap heap.

  6. Rabz

    shadow treasurer Chris Bowen and assistant shadow treasurer Andrew Leigh

    Labor – truly beyond parody.

  7. Jeremy

    I am pleased to hear Turnbull coming on as a reserve for Team Abbott, but he as well must face reality.
    A simple comparison of Wayne Swan’s proposed expenditure for 14/15 and 15/16 and Joe Hockey’s proposed expenditure for the same years is as follows:
    Fin Year 14/15 – Swan $415.7 Bil. – Hockey $414.8 Bil.
    Fin Year 15/16 – Swan $431.0Bil. – Hockey $431.1 Bil.
    Clearly spending is the same or higher than that of the previous government. It is obviously untrue to say they are cutting costs when the published budget figures show they are not.
    Experience tells us that promises to cut spending after the next election are seldom fulfilled.
    To make their narrative believable, they must act as though they believe it.

    Their Key Performance Indicator is “Spend less than Wayne Swan planned to spend”.

  8. Leigh Lowe

    Malcolm takes 2000 words to prove that he can work a pocket calculator.
    Whoopee fucking do.

  9. candy

    Nah.
    M. Turnbull as communications minister did not lift a finger to help the government and especially with the Snowden papers and the claims of burning asylums seekers. He did nothing.

    He has just realised if he wants to be PM he has to support his party. To my mind – 18 months too late.

    This speech is a job application to be treasurer because he has not the ticker to be PM.

    Watch out Joe Hockey. He’s after your job.

  10. Gab

    Excellent analysis, Candy.

  11. candy

    Thanks Gab. That means a lot to me that you agree. xx

  12. pete m

    I’ll ask him this Saturday Candy.

  13. oldOzzie

    Empire
    #1627033, posted on March 11, 2015 at 8:54 pm

    “Ultimatum Ultimo”

    Don’t knock Ultimo, I have a nice property there I rent out, that keeps going up in value (Old Aged Capitalist Pig that I am)

  14. Gab

    I’ll ask him this Saturday

    lol what would be the point? He’s not exactly going to admit to anything nefarious now is he?

  15. Andrew

    Malcolm is all about himself. Candy is spot on. Unless he is a leader, he’ll never advocate for the greater cause of the government but will look out for a promotion in any way possible.

  16. rebel with cause

    So the Liberals are finally figuring out they have inherited the legacy of a radical leftist government? Pity they won’t leave PM Bill Shorten with much work to do to put things back on that track.

  17. Empire

    It is an evil thing to price people out of jobs and then throw them on the scrap heap.

    Statanist price fixing of the labour market is an abominable human rights violation.

    Minimum wage proponents ought be tried at The Hague.

  18. tomix

    Rodney at 9:18 pm
    In 1961 there were 80,000 invalid pensioners, and 1.9% unemployment.
    In 1962 there was a credit squeeze, and unemployment rocketed.

    In 1961, the population was under 10 million. There would have been a lot of TPI pensioners and War pensioners from the 14-18 War and the following wars, in addition to those 80,000 Invalid pensioners.

  19. Empire

    Imagine, for a moment, a poor bastard down on his luck, for whom a job, any job, is his ticket to freedom. A prospective employer will take him on for $10.65 per hour flat and will give him 60 hours a week if he wants it.

    Along comes the state, with monopoly of force and compels the poor bastard to price himself out of salvation.

    It is entirely immoral and a cynical shake down racket by the political class. When Mal starts selling that message, I’ll start listening.

  20. Aussiepundit

    A fantastic speech that neither Abbott nor Hockey could, or would, give, it’s only fault being too forgiving to Hockey.

  21. Baldrick

    This speech is a job application to be treasurer because he has not the ticker to be PM.

    Spot on the money with that comment Candy.

  22. Aussiepundit

    Even if you’re right, Candy, and this is a job application, it’s a good application. Time to get over your irrational fear and loathing.

  23. tomix

    He’s still a Keynesian. He seems to be suggesting that if another GFC came along, there mightn’t be any money for stimulus, as if that’s a bad thing.

  24. candy

    Even if you’re right, Candy, and this is a job application, it’s a good application. Time to get over your irrational fear and loathing.

    Job applications come by vacancies, Mr Aussiepundit. Not by undermining.

    Joe Hockey is currently involved in a law case where the media say he was open to bribes.

    Now, M. Turnbull is capitalising on those headlines, to my mind. He should in fact be supporting his party’s treasurer. Is he?

  25. H B Bear

    shadow treasurer Chris Bowen and assistant shadow treasurer Andrew Leigh
    Labor – truly beyond parody.

    Boy Wonder and his trusty sidekick. Bowen has failed upwards without a single success to his name. A true Labor star.

  26. Rob MW

    About time that Turnbull stepped out of the shadows of engineering self-sponsorship to present, for the first time since 2013 (or ever), an address extolling the fiscal principles that his side of politics stand for and standing up for the person standing beside him in the trenches rather than sticking his pickle in the left’s pocket.

  27. tomix

    Wasn’t there a convention that Ministers don’t make public comments in areas of other Minister’s portfolio responsibilities?

  28. Empire

    There is nothing irrational about loathing Mal. He supports carbonic wealth redistribution.

    He should be feared. He opposes cuts to state spending on the left’s propaganda organ.

    It would be in everyone else’s best interest if his next job application was for a private sector appointment.

  29. Andrew

    This speech is a job application to be treasurer because he has not the ticker to be PM.

    Yes.

    Hopefully he succeeds. Great shadow in 2008 – the only thing he’s ever done right.

  30. wreckage

    Minimum wage: it is illegal to hire somebody to do anything – anything at all – full time for $350 per week. It’s too little! It’s inhumane and INHUMAN!

    Unless you’re the government. Then you can hire them for that, no loading, no holiday pay, and immediate dismissal without compensation if you find out they’ve been moonlighting.

    The system is fucked.

    The dole/pension should be easy-on, easy-off, with no minimum wage. I say this as a DSP recipient AND erstwhile minimum-wage worker.

  31. rafiki

    It is almost inevitable that Turnbull will lead the Libs sometime, and pretty soon I hope. But, meanwhile, I heartily approve Abbott’s attacks on the HRC and the UN, and his plain speaking about the Aborigines. The best outcome is that he damages the Greens and Labor, and to some extent locks in Turnbull on these issues. At the very least, I am happy that someone has expressed the frustration I feel about the human rights industry. Less worthy is the fun watching leftist explosions of anger. Noel Pearson almost lost it – as he is wont to on occasion.

  32. wreckage

    It was pretty fucking unbelievable to see the Left insist that Aboriginals be left in rural slums.

    Abbott is on a winner there, the more they shout him down the more repulsive they appear to any normal, compassionate human being.

  33. It is almost inevitable that Turnbull will lead the Libs sometime

    God help us.

    On this subject, I recently took a phone call from a high profile federal MHR of a certain party, who as part of a wide ranging conversation revealed that they believed Turnbull would never get the leadership, coz there would be too many rank & file Liberal party members who’d go spare at the party just at the suggestion of it.

  34. It was pretty fucking unbelievable to see the Left insist that Aboriginals be left in rural slums.

    The left put ’em there. They’re going to die in the ditch defending the morality of this decision.

  35. Ant

    They’re worse than rural slums. “Rural” implies some form of productive agricultural activity when in fact many are more like remote government subsidised ghettos.

    If the kids in these places were dogs the RSPCA would be called in to rescue them from the depravity, and their minders would be up on charges of cruelty.

    But the left is comfortable with having these little incubators of extreme misery going so they continue fantasising about how they’re preserving ‘aboriginal culture’.

    The left has a very high tolerance for misery.

  36. Pusnip

    Were Malcolm PM, the Libs would be miles ahead and there would be a chance that we’d get some decent small government policy. There’s no chance of that under ths current lame duck and much of his front bench.

  37. Infidel Tiger

    There’s no chance of that under ths current lame duck and much of his front bench.

    Agreed. I mean look at the NBN. Just a complete clusterfuck and yet the Minister in charge, whoever that is, has done nothing to fix this boondoggle.

  38. JC

    Funny about that. I had a discussion about the NBN this evening with someone close to it. He didn’t say much I/we didn’t know, but reminded me why I despise the Libs so much. They knew the NBN was a total waste of money but many in the party believed they lost the 2010 election because they were against the NBN. So last time around they decided to support it.

    I was told that they have so far spent around 60% of the government allocated money with only 10% of the layout. They expect it to cost $90 billion when it’s all said and done. Wireless G5 is being introduced and speeds rival the expectations of the NBN.

  39. H B Bear

    It is almost inevitable that Turnbull will lead the Libs sometime, and pretty soon I hope.

    Nope. There is a not small number of Liberals who will die in the ditch before serving in a Lord Turnbull government.

  40. Natural Instinct

    Good speech. But also pointless as it did not address the four issues facing a government that wants to turn the Budget around.
    .
    1) In a low growth, low inflation world the tried-and-true recipe of freezing payments and letting inflation do its magic no longer applies. What is plan B, Malcolm?
    .
    2) In a world where the fabled 43% are getting stuff from the government, and think they are entitled to this stuff plus even more stuff from the government, how do you take a single person off a welfare benefit without being crucified by the MSM? Remembering issue 1, how do you do it Malcolm?
    .
    3) In a world where low interest, low information voters determine who wins, why bother with “austerity” programs – that sounds so off-putting and un-sexy. How about a new childcare beenfit for you parents? How about an increase in the pension for you oldies? How about 20% Super (that the bosses pay, not you) for all those “hard working families”? So Malcolm, remembering I am a LI-LI and I vote, how are you going to convince me why cuts (real or minimal) are good in a language I can understand.
    .
    4) And finally Malcolm, why did Joe not cut a single red cent from the Budget outgoings if things are so dire? Didn’t he just rearrange the spending onto things that his Liberal mates like?

  41. Blogstrop

    So, even a Labor-leaning guy like him can understand and articulate the problem.

    Meanwhile, the Labor/Green/media alliance want to deny and obstruct. Our moral compass is indeed decaying, as those forces align to warp the democratic process. It’s now a game of convincing the LIV that their tribe should be on the treasury benches. No amount of misrepresentation or outright lying is too much. This is whatever it takes taken to the limit.

  42. Tel

    He’s still a Keynesian. He seems to be suggesting that if another GFC came along, there mightn’t be any money for stimulus, as if that’s a bad thing.

    IMHO it’s a matter of time before another GFC does come along, and it will not be possible to just raid the piggy bank and spend our way out of it. In the USA 30 Year fixed rate mortgages are still trending down, the 10-Year Treasury rate is also trending down, nothing has fundamentally changed.

    In Australia, we aren’t getting the resource boost from China’s industry that we were, instead we are getting the backwash of Chinese money escaping from China… money is fine but unless invested into genuine future earnings (not just bidding up the price of houses) that money will not last.

    If the debt keeps mounting, a new generation will simply come along and repudiate… either directly or by inflation. Democratic sovereign nation. The boomers, for once in their lives won’t get all the things they asked for.

  43. Bigpeteoz

    All Turnbull has done is cobble together what has already been elucidated by Abbott and Hockey. He is only parroting what is Hockey’s’ domain. He is a turncoat and this is his last stab at the leadership tussle. He will fail as ALL Liberal Parliamentary Members know that the base will desert in droves if Turnbull is leader. He should just cross the floor and try to join the ALP, their voters seem to think he would make a good leader, they can have him.

  44. .

    He is only parroting what is Hockey’s’ domain.

    Oh great another socialist.

    He will fail as ALL Liberal Parliamentary Members know that the base will desert in droves if Turnbull is leader. He should just cross the floor and try to join the ALP, their voters seem to think he would make a good leader, they can have him.

    In my opinion, most of them ought to join the ALP.

  45. Alfonso

    Now tell us how an ETS is the most important economic “reform” since floating the dollar. You know you want to Mal.

  46. john constantine

    Their abc gets 12 billion of taxpayers money in the next decade, plus whatever ‘cash for comment’ billions the shortfilth pisses away on them.

    In return we get not a national broadcaster, but a billion odd dollar a year narrowcaster.

    Narrowcasting narrow-minded groupthink to the hivemind, and carefully selected targetted electorates, using all that money that real people worked for, to progress socialism.

    Their abc is an active terrorist cell, dedicated to the overthrow of the australian taxpayer that funds them.

    Turnbull is fraser-light, as he purrs in deluded delight when the flirty-fishers of their abc give him tummy-rubs to keep him on their side.

  47. .

    I was told that they have so far spent around 60% of the government allocated money with only 10% of the layout. They expect it to cost $90 billion when it’s all said and done. Wireless G5 is being introduced and speeds rival the expectations of the NBN.

    HAHAHAHAHAHAHAHAHAHAHAHAHA!

    The NBN will cost over 200 bn AUD and it will never be completed.

  48. Wasn’t there a convention that Ministers don’t make public comments in areas of other Minister’s portfolio responsibilities?

    That’s correct, Tomix. So why is Malcom commenting on Treasury matters when he’s Minister for Communications?
    Because he’s Malcom, that’s why. Treason is what Malcolm does.

  49. .

    Treason? He’s a merchant banker and he has a clue, unlike Hockey.

    They are spending too much money. That is indefensible.

  50. The Beer Whisperer

    Along comes the state, with monopoly of force and compels the poor bastard to price himself out of salvation.

    We’d be better off having the government pay the difference between a nominal minimum wage and what they actually get paid. It would reduce the below-minimum-wage black market and provide visibility of cash-in-hand businesses.

  51. Rodney

    There are 55,000 people on the DSP who are under 25. Such persons are, having been labelled useless, are therefore prone to depression, drug use and criminality. Where culturally appropriate Jihad calls.

  52. Paul

    Much as I usually don’t like the guy, this was good. Very good. I can be persuaded to change my opinion of him at this rate, at least to indifferent or maybe lukewarm.

  53. john malpas

    And the poor old pensiones must go without because the leaders need to go on building and building.
    When I came to Australia the population was anbout ten million. Now it is over double that.
    Who paid for all those extra roads, hospitals, schools and politicians.
    Me.
    So the elderly must have a poor health system that rations everything.
    We must live on air promise crammed.

  54. goatjam

    Bloody hell Turnbull gives me the shits.

    That he can come out with great stuff like this but also be a rent boy for the carbon panic industry is infuriating, as well is his obvious penchant for political skullduggery.

    If I thought Turnbull could be trusted I’d be 100% behind a Morro PM, Turnbull Treasurer with Joe Hockey getting the tea and biscuits ticket.

  55. .

    Rodney
    #1627250, posted on March 12, 2015 at 8:35 am
    There are 55,000 people on the DSP who are under 25. Such persons are, having been labelled useless, are therefore prone to depression, drug use and criminality. Where culturally appropriate Jihad calls.

    They’re not useless, they’re bludgers.

  56. Pyrmonter

    Dot – they’re priced out of the labour market, effectively expelled from polite society. Speaking for myself, I’d find that fairly crushing.

    Turnbull looks like the least worst option.

  57. .

    Yes, I agree.

    I assume that most, not all of them are just employed by fiat.

    Like how most, not all, decide not to blow themselves up for a foreign preacher.

  58. Makka

    The problem with Mal is that he represents too many sides. It’s impossible to trust him on many key issues.

    He’s a Keynesian, he supports big Govt, he has Socialist tendencies with his pet project the ALPBC and AGW etc. We know his loyalty is equal to that of Quisling. Then he comes out with a clear message such as this – which in fact should have been thoroughly explained already by Hockey from day one of this Govt.

    It’s quite despairing to see that this multi-faced Turnbull can outperform every other LNP front bencher at times. I have no doubt Morro, were he in command of this area of Policy would be able to just as well. Probably better as his Conservative message is at least credible, unlike Mal.

    Yes, Turnbull wants Hockey’s job. As far as I’m concerned he should have it. Because at least Mal displays some semblence of understanding the problem and articulating the need to address it. Hockey is still waving his arms about and telling us how higher taxes will save the day.

  59. “Spending and tax cut commitments rose rapidly…”

    One of these is not like the other.

  60. incoherent rambler

    NBN/ABC/SBS/ACMA Mal is talking about a budget? Budgeting?

  61. mc

    re post :
    Rabz
    #1627034, posted on March 11, 2015 at 8:58 pm

    Sorry everyone…I was one of those c**kheads. I keep a picture of Mr Rudd on my desk at work to remind me…”never again!”

    MC

  62. rafiki

    On the point that if Turnbull succeeds Abbott the Libs base will erupt, leave, etc. Assume this is so, but does it matter? Just how many of them are there? If they leave, for whom will they vote? What will be lost to the strength of the Libs? From what I have observed of the antics of the Canberra Libs, there is not much quality in the branches, and a good clean out might be beneficial.
    Of course, the Libs need some members to hand out cards, man the booths etc. But do not discount the possibility – probability even – that MT will attract many new members to the ranks. He has a very high standing among the younger professionals – such as the lawyers and bankers, (although not just them) – and these people are energetic and motivated; (words that don’t apply to the old farts in the branches as they stand).
    Will the heavy financial backers and donors also quit? I doubt it, although that depends on MT spelling out a bit more his message on matters like the budget and industrial relations. With the right message, the money could flow in.
    Recall too that MT has experience working with the younger reformist minded demographic during the campaign for the republic. I don’t want to see that activated again, but that’s not my point. A great deal of opinion is now dispersed via social media, and I guess that MT knows more about this than any alternative Lib leader.
    A not so minor point is that MT is an outstanding parliamentary performer. It is a joy to see him in action during question time, and he will provide news grabs every day. He also depresses Labor and would discombobulate the Greens.

  63. johanna

    Never mind what Turncoat says, watch what he does.

    The lightbulb-banning, CAGW-alarmist, pro extra tax, flaccid on the ABC, backstabbing Malcolm is the real person.

    So, he can cobble together a good speech. So he should – he used to be a barrister. But, where is his landmark speech on the future of public broadcasting? Or the future of the NBN? You know, the things in his portfolio, that he can actually do something about.

    Crickets.

  64. Mr Rusty

    Those numbers in the dot points are absolutely eye watering. How the hell did spending go up over 50% in 6 years? What have we seen for that?
    On the plus side all I can think of is some kids can eat their school lunch in the shade, there’s some pink fluff in roofs of houses that haven’t burnt down and a few people can download porn faster.
    On the negative side we’ve had 50,000 uninvited guests (and quite a few rapists and kiddy fiddlers), 2000 dead bodies, 4 toasted kids, millions unemployed or under employed, power prices skyrocket, entire industries closed, small business screwed, restaurants closed on weekends, millions on unused websites, a Superduperclinic…or two, some kid might have got a laptop, Cate Blankshit and 2020, higher private health premiums, unaffordable housing, school leavers who can’t spell, or think, quangos and committees that produce nothing but dead trees, an overseas Australian news channel run by people who hate Australia, everyone (including the dead) spending $900 on stimulating the Korean and Chinese economies, stupendous pay rises for pollies and the PS and doing the best job ever in driving away investment and opportunity.
    The six years of Labor were the best advertisement ever for smaller Government, then we get a bunch who want to keep on spending but at a slower rate of increase and now people want to go back to the previous debacle.
    We deserve eveything that is coming for us.

  65. Makka

    ‘Will the heavy financial backers and donors also quit?’

    Big business loves Mal. He will entrench their monopoly/cartel status without reservation. Months back the whining from Abbott about ‘where is Business?’ backing him I read as Business’ sending the message they want MT as their PM. This is the Sinodinos angle alive and well undermining Abbott.

  66. stackja

    So again the ALP is the problem.

  67. .

    If Turnbull proposes tax cuts and makes sure the Libs put it in the policy manifesto for Campaign ’16, he is the one true leader.

    If not, he’s just another smooth talking socialist predator.

  68. Yohan

    Sloppy Joe says we have a huge problem with our retiring population and pension funding.
    Then 2 days later says young people should draw down their super for a house deposit.

    I will grit my teeth and accept Malcolm over the current clowns.

  69. If Turnbull proposes tax cuts and makes sure the Libs put it in the policy manifesto for Campaign ’16, he is the one true leader.

    Given that he grouped tax cuts with increased spending, I’d say that’s unlikely.

    If a tax cut is an increase in spending, then logically, a tax increase is a reduction is spending. This is how socialists view the world, and it seems Malcolm is no exception. So when Libs promise to reduce spending, instead of cheering, we should ask them to clarify what they mean by it. Otherwise, we shouldn’t be surprised when they increase taxes – as far as they’re concerned, that’s them keeping their promise.

  70. Sloppy Joe says we have a huge problem with our retiring population and pension funding.
    Then 2 days later says young people should draw down their super for a house deposit.

    Super is a scam. Everyone – not just “young people” and first home buyers – should have access to super to purchase property. But Mal is right that there’s a supply issue. If state government keeps land locked up, and maintains extreme zoning restrictions and absurd “environmental” building requirements for new housing, then more cash on the demand side will just further push up prices.

  71. Rabz

    If they leave, for whom will they vote?

    Well, as stated before, I’ll be voting informal and I would expect that a significant number of less than gruntled former liberal voters will also do likewise.

    A further massive collapse in their primary vote might actually rouse a few of the myopic imbeciles to rediscovering some spine, but I doubt it.

  72. candy

    Using super for a house deposit sounds worthwhile and at least worth discussing. It might easily appeal to people who just want to own a home and get started on their life.

    Joe Hockey raised a good point there. M. Turnbull knocked it back flat because he’s challenging for the treasurer’s job. It’s not his portfolio for one thing. I don’t think Joe Hockey goes about talking about technicalities of the NBN or concentration of media ownership as issues does he?

  73. PoliticoNT

    They knew the NBN was a total waste of money but many in the party believed they lost the 2010 election because they were against the NBN. So last time around they decided to support it.

    JC

    Correct me if I’m wrong but wasn’t the NBN MT’s idea in the first place? Cabinet Implementation Unit within PM&C (under Howard, so it worked, unlike the grandiose corporate creche of SDD under Rudd) did not think much of the proposal, and even less of the capacity of the responsible department to implement the project. (‘Critically useless pampered collection of demented SES‘ was the phrase I remember)

    That said PM&C capped the project at around$2.5b, which was later extended to $4.5b. Could Turnbull have delivered? Who knows. The opportunity cost is obscene beyond belief. But that’s Labor for you – obscene beyond belief.

  74. Fred Lenin.

    To digress from political Stupidity for a moment ,this may raise. Smile in these dire times. I was waiting for a bus near a pedestrian crossing. I saw the sign with the two walking egs. And wondered. In that UK jail where Rolf is do they have a sign with Three legs on it ? Had to share my lateral humour sorry .

  75. johanna

    Candy, the trouble with the proposals to use super for house deposits is that it runs smack into the objectives of getting people off the age pension. You can have one or the other, but not both, especially if the family home is exempt from the assets test.

  76. James

    Using super for a house deposit sounds worthwhile and at least worth discussing.

    The whole point of superannuation is to force people to make some savings and put into profitable investments, that would leave them with some money to live on in retirement.

    Putting money towards their first home sort of fulfill that purpose.

    The issue is, superannuation is supposed to be locked up.

    If the money is in the home, what would prevent people from selling it in a few years, cash it out and spend it?

    They might put the mortgage in an incoming offsetting account. The equity of the whole house becomes accessible.

  77. James

    MT is an outstanding parliamentary performer.

    Enough of those Convorians. It’s not funny.

  78. James

    If Turnbull proposes tax cuts and makes sure the Libs put it in the policy manifesto for Campaign ’16, he is the one true leader.

    Why are some people so obsessed with tax cuts?

    More and more people get government handouts rather than pay tax. Taxpayers are a minority only. Tax cuts are attractive to fewer and fewer people.

    In fact, tax cuts are a turnoff to the handout brigade. I heard people loudly say, tax cuts are a favor to the rich at the expense of the poor.

    And, isn’t the government in the red? There is not enough money to pay for all the goodies. Why cut revenue?

  79. Jim

    What we have learned this week is that Mr Turnbull understands the economic and fiscal problems faced by this nation, while the incumbent Treasurer is largely clueless, incompetent, ill-informed (or all three).

    Therefore, Mr Turnbull is less worse then Mr Hockey and would make a better Treasurer. Then again, Mr Turnbull is probably less worse than the Mr Abbott at being a credible PM (not a difficult test).

  80. Rorschach

    because … [Turnbull’s] … challenging for the treasurer’s job.

    Do you think that with a year and a half before the [almost guaranteed to lose] election, that Turnbull will be satisfied with just the Treasurer’s job?

    This speech was a job application for the PMs job! Expect the undermining of Abbott & Hockey to continue unabated leading up to the Budget and then, following the inevitable decry of how hopeless that is, offer himself as the all healing saviour.

  81. Max

    The issue is, superannuation is supposed to be locked up.

    Gen X and Y should be allowed to get their money out of super now before the government taxes it to pay for Aquaerobics clases for retired baby boombers

  82. candy

    Candy, the trouble with the proposals to use super for house deposits is that it runs smack into the objectives of getting people off the age pension

    Well, yes, I see that, Johanna.

    But I was thinking that if a young couple for example are very keen to get started on their life/children with a home, it seems a shame to knock back that option just out of hand?

  83. Zippy The Younger

    The issue is, superannuation is supposed to be locked up.

    Which is yet another stupid idea from gumnin, trying to avoid meeting its socialist obligations.
    Its our money, we should be able to get access to at any time without penalty, beyond paying the tax we would have.

  84. goatjam

    The whole point of superannuation is to force people to make some savings and put into profitable investments, union controlled super funds.

    TFTFY

  85. Grandma

    Aussiepundit – Fear and loathing of Malcolm is not irrational. If I’d wanted a Labor Prime Minister, I’d have voted Labor. I don’t want one by proxy through dissimulation and treachery.

  86. Dr Faustus

    This speech was a job application for the PMs job! Expect the undermining of Abbott & Hockey to continue unabated leading up to the Budget and then, following the inevitable decry of how hopeless that is, offer himself as the all healing saviour.

    Abbott and Hockey undermined themselves by not running this blindingly obvious economic policy line from Day 1 – and instead farming out their economic leadership to Tony Shepherd and the ‘National Commission of Audit’. Someone must have told them that the politics of pain would be easier if they had an ‘independent’ report to blame – and the cockheads obviously believed her.

    Everything that happens to them – and I agree with all comments here about Turnbull’s job application – is brought on themselves: disloyalty amongst colleagues, lack of traction with business, community groups and the media, and frank personal contempt out in voter-world. These are the reasons why the utter peanuts in the Senate have them held hostage – and why they will be voted out of power in 2016 in favour of useless Labor hacks backed up by Green Marxists.

    There is no way in the world that Turnbull would be a unity PM, but the alternative – a Shorten Government, claiming a mandate to inflict Labor Values and ‘fairness’ on Australia – should concentrate the minds of the dullards in the Liberal Party Room.

  87. johanna

    candy
    #1627433, posted on March 12, 2015 at 12:36 pm

    Candy, the trouble with the proposals to use super for house deposits is that it runs smack into the objectives of getting people off the age pension

    Well, yes, I see that, Johanna.

    But I was thinking that if a young couple for example are very keen to get started on their life/children with a home, it seems a shame to knock back that option just out of hand?

    Well, it might be do-able if it requires the recipients to repay the money into their super over time. But, it would be administratively very complex and expensive, and full of loopholes.

    That said, the real issue is that the money people are forced to put into super when they are young is a huge drag on their ability to save. But even if it was made optional, it would clash with the exemption of the family home from the pension.

    There’s no easy solution. We have two powerful government policies in direct conflict.

  88. Jim from QLD

    “There’s no easy solution. We have two powerful government policies in direct conflict.”

    Agree completely. Huge moral hazard in current situation and in proposed situation RE: withdrawing super for primary place of residence purchases.

    My utopian solution, make age pension the same as newstart (significant reduction), make super completely optional but ensure it remains concessional.

    My doubly utopian solution, make age pension the same as newstart, drop taxation to flat 15% everywhere. Celebrate as there is now need for convoluted corporate structures and 90% of the population of canberra.

  89. Combine_Dave

    Great speech, looking forward to the new ETS or transaction tax designed to plug the shortfull in the budget.

  90. old bloke

    In my view the failure to effectively make the case for Budget repair was our biggest misstep, because it was a threshold we never crossed.

    I find myself in full agreement with MT for the first time. Australia’s poor fiscal position should have been stated loudly, clearly and repeatedly during the election campaign and into government. Instead, we had TA promising no cuts to the ABC. The Liberal Party were going to win the election regardless, the electorate would have voted for anyone other than Labor following the debacle of the R/G/R years, yet no one in the Liberal Party had the courage to say what had to be said.

  91. johanna

    I find myself in full agreement with MT for the first time.

    No, you find yourself in agreement with MT’s words.

    Big difference.

  92. outsider

    Leaving aside identities and entrenched hatreds, how would you rate this effort compared to stumblebum and his bud’s performances this last week? Jesus Christ on a bike TA and the Hockster are appalling communicators for dudes with decades in the biz. Raid super for houses? Every day a fresh screw up.

    And why didn’t Abbott put in just a little work behind closed doors and speak to key players re the indigs, then announce decent policy to overcome the bleeding obvious? No, he just went out there again and did the thought bubble thing – again – and got jumped by the lefty media – again. How about telling people how much this noble savage deal is costing us all – $30 billion each and every year, twice what non-indigs cost?

    http://www.pc.gov.au/research/recurring/indigenous-expenditure-report/indigenous-expenditure-report-2014

    What an intellectually lazy creep Abbott is. I’m no MT fan, but something has to change, and soon, and a guy with a functional intellect is a start, so he can get to ride the bike in my book. See Credlin is still threatening people, as per Niki Savva in the Oz today.

    It’s the Addams Family redux, a total horror show. Like the Bourbons, they have learned nothing and forgotten nothing. They are a drunk slowly making his way to the exit door at closing time, zigzagging all over the place. In this intellectual vacuum headed up by TA and the sloganeering bozo opposite, MT would attract a lot of support just by not being them.

  93. goatjam

    It’s the Addams Family redux, a total horror show.

    The Addams Family was a comedy. Mind you, that also fits.

  94. Bons

    They’re worse than rural slums. “Rural” implies some form of productive agricultural activity when in fact many are more like remote government subsidised ghettos.
    A truly well meaning and very bright daughter of mates of our’s volunteered to work with seven of these poor victims who had been dispatched to a Sydney private school. A PR exercise for the school – a serious commitment for the young lady.
    The results were horrible, not only could the kids not deal with English thanks to the progressive bullshit of teaching them in their own micro-jabber, but they lived in absolute misery.
    The boarding house, the food, the other kids, who were overwhelmingly supportive, and even sport terrified them.
    They all went home. The young lady is now an aggressive campaigner for restoring the human rights of these poor bloody kids who are denied the right to exist as equals in our society by our moral superiors. As a med student she has copped a lot of paternalistic aggressive opposition from her Medical College for her stance.

  95. Mick Gold Coast QLD

    From johanna at 10:09 am:

    “Never mind what Turncoat says, watch what he does.

    The lightbulb-banning, CAGW-alarmist, pro extra tax, flaccid on the ABC, backstabbing Malcolm is the real person.

    So, he can cobble together a good speech. So he should – he used to be a barrister. But, where is his landmark speech on the future of public broadcasting? Or the future of the NBN? You know, the things in his portfolio, that he can actually do something about.

    Crickets.”

    and again at 3:11 pm:

    (in response to Old Bloke’s) I find myself in full agreement with MT for the first time.

    No, you find yourself in agreement with MT’s words.

    Big difference.”

    Well said Johanna.

    Stumbull the bone idle ought to have been working every day of his many years in Parliament implementing things he talks about here but he hasn’t. He made a speech yesterday for the primary of unseating his Party’s elected leader, in his third attempt in as many weeks. This is the only reason he made this speech.

    Abbott666 and, this week, Uncle Buck Hockey, are not honorable colleagues worthy of his best efforts in support of a common purpose, they are irritating obstacles to his rightful destiny.

    The man is a spiv and always was.

  96. Mick Gold Coast QLD

    Ooops – sorry. Should read:

    “He made a speech yesterday for the primary purpose of unseating his Party’s elected leader”

  97. wreckage

    It’s telling that for all Abbotts shriekingly obvious flaws, the Libs still won’t back MT to unseat him.

  98. tomix

    The Nationals saw what Howard’s compulsory gun buybacks and the GST did to their support outside the cities.
    They’d be mad to accept Turnbull and his inevitable ETS.

  99. wreckage

    Howard was driving the SEPP46 and other bullshit tree-snatching policies, too.

    The GST was the least of his sins.

    It’s total madness that he is now, in hindsight, probably the most actually liberal PM we’re ever going to have.

  100. outsider

    Rereading this speech, only brushed over before, the combination of factual information and the sheeting home of blame to the opponents and true villains of the piece really stand in contrast to the sloganeering we hear from those perpetual opposition figures in TA/JH.

    This kind of reasoning is murder to less nimble opponents capable only of recycled platitudes. But the vitriol seen in this thread goes close to being unhinged, as people cannot see past a football crowd mentality – my team or their team. It might be time for some objectivity, and an understanding that everyone changes with the times.

    None of these individuals are the same in office as in opposition, and back then global warming was all the rage, even for Howard and Abbott, who resiled from his ‘crap’ comments – as we knew so little about the background and characters propelling AGW along.

    Yes, I still think of MT when I turn on the silly bulbs, but I think of Abbott when I turn on the television, then weep..metaphorically, none of these folks are worth dying in a ditch over. TA looks more like a Labor plant than Turnbull however, who at least can mount a case. Does he write his own speeches?

  101. Dr Faustus

    It’s telling that for all Abbotts shriekingly obvious flaws, the Libs still won’t back MT to unseat him.

    It is. And what it is telling is that the Liberal party room is still presently committed to trying to avoid removing a sitting PM. Many of them are smart enough to have realised the ALP demonstrated that is not a good look with the punters.

    If/when the parliamentary party gives up on Abbott, then the issue of whether it can stomach Turnbull comes into play – and that will probably be decided by self-interest and the alternatives on offer. At the moment Lib members are free to talk big in anonymous press briefings about who they will, or won’t work with. In the end, however, they have a simple choice: work with someone credible as PM and try to repair the self-inflicted damage, or stay incredible and go down in flames.

    Turnbull is on the road publicly burnishing his PM credibility credentials. Tellingly, nobody else is.

  102. Treason? He’s a merchant banker and he has a clue, unlike Hockey.
    They are spending too much money. That is indefensible.

    I’m talking about Malcolm Turnbulls professional conduct, dot. Not his business acumen.

  103. Elizabeth (Lizzie) B.

    Yes, I still think of MT when I turn on the silly bulbs, but I think of Abbott when I turn on the television, then weep..metaphorically, none of these folks are worth dying in a ditch over. TA looks more like a Labor plant than Turnbull however, who at least can mount a case.

    I find it impossible to listen to Abbott stumbling around any more on the TV. So do most voters, I suspect. He just cannot communicate successfully. What’s more, it’s nothing that can be fixed by extra media training. As people above have said, it’s because he is all over the place in policy terms. He communicates in the same manner that he develops policy; grasping for ideas, hesitantly, off the cuff, generating the image (and the reality) of being caught out without having put in much thought.

    Morrison as leader, Turnbull as Treasurer. Then we may get somewhere electorally.
    Turnbull is very rich. If he was leader, the left would never leave off about that. It would be a Washington re-run; Mitt Romney all over again. Rudd’s wife’s wealth notwithstanding (as we all know, it’s different when they do it).

  104. We’d be better off having the government pay the difference between a nominal minimum wage and what they actually get paid. It would reduce the below-minimum-wage black market and provide visibility of cash-in-hand businesses.

    Are you suggesting a negative tax rate tied to all incomes, TBW? Whilst I’m in favour of it, the safeguards against rorting would probably be monumental.
    But it bears further investigation, methinks.

  105. Macbeth

    Well done Candy. More power to you.

  106. And, isn’t the government in the red? There is not enough money to pay for all the goodies. Why cut revenue?

    Because, James, after about 20%, tax rises bring in declining revenue. I introduce you to the Laffer Curve.

  107. Grandma has the MT problem down pat. He is just not trustworthy.

  108. wreckage

    In conversations elsewhere with centre-left types, I have discovered they are quite … schizophrenic is innacurate but it’ll do … about negative income tax / mincome type arrangements. They love it when it’s a theory. They really do. But when they see it in action, they are aghast that the government is SUBSIDIZING WALMART/MCDONALDS/SATAN HIMSELF.

    I have seen people praise the idea of a negative income tax AND loudly denounce it, simultaneously, on separate parts of the same message board. When I pointed this out they got confused, and none of them would normally be considered dense.

    So beware the left, or even the “commonsense” right supporting this idea. Actual benefits to low-paid workers, increased employment and a better economy all take a back seat to moral outrage at imagined enemies.

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