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Progressive voters need to confront the stark reality of the Australian budget Progressive voters need to confront the stark reality of the Australian budget
(4 months later)
Since the high-profile Commission of Audit Since the high-profile Commission of Audit was announced last year, federal treasurer Joe Hockey has lead Coalition MPs in making the case for a tough budget come May 13. Calling the “unsustainable” spending during the last government “a recipe for disaster”, last week Hockey delivered his strongest speech yet, stressing the “moral imperative” of returning the budget to a sustainable path.
was announced last year, federal treasurer Joe Hockey has lead Coalition MPs in On Monday night, prime minister Tony Abbott dropped more pre-budget bombshells, flagging an end to several cash transfer programs, the abandonment of the prior government’s school funding plans and longer-term pension reform.
making the case for a tough budget come May 13. Calling the “unsustainable” The electorate is being primed to see painful cuts delivered in just a fortnight’s time, yet so far the opposition have failed to respond with anything more than kneejerk condemnation.
spending during the last government “a recipe for disaster”, last week Hockey The ALP’s furious response to the idea of a "debt levy" or temporary tax is instructive. Many might be at a loss as to why a progressive party is campaigning hard against a tax that spares anyone below $80,000 pa, which is a full $23,000 a year more than the median Australian worker earns. Of course the Coalition might be owed some payback after pursuing Julia Gillard over her no carbon tax promise, but channeling this venom back won’t win the ALP economic credibility in the long-run.
delivered his strongest speech yet, stressing Similarly, just as the carbon tax was not a “wrecking ball through the economy”, GP co-payments are not a "GP tax that will hit families who can afford it the least”, Bill Shorten claims. The idea’s dubious merits aside, an exemption for pensioners and concession cardholders is part of the plan.
the “moral imperative” of returning the budget to a sustainable path. There’s a disturbing trend here – lashing out on progressively targeted budget cuts, while failing to offer substantive savings measures. Though good ideas, dumping the universally panned paid parental leave scheme and retaining a carbon price won’t come close to tackling Australia’s real long-run budget problems.
On Monday Coalition rhetoric aside, even without the Rudd government’s global financial crisis stimulus, budgeting for an inevitably scarcer future would need to happen. Reports from the federal treasury and the Grattan Institute are unambiguous: rising health care costs and changing demographics will eventually leave us in perpetual deficit territory. Even the modest improvement between the 2007 and 2010 treasury projections below only deferred the point at which budget deficits become inevitable.
night, prime minister Tony Abbott dropped more pre-budget bombshells, For progressive voters who want to see Australia remain a prosperous and egalitarian country, confronting the stark reality of the budget is a necessary task. Despite the Coalition’s assurances that cuts will fall on the “entire community”, the refusal to touch superannuation and commitment to gold-plated paid parental leave stretches the credulity of Hockey’s "we’re all in this together" narrative.
flagging an end to several cash transfer programs, the abandonment of the prior For Bill Shorten to become prime minister in 2016 he’ll need a credible economic plan, and that means confronting the Coalition head-on with a series of budget proposals that protect the most needy while addressing our short and long-term budget problems. The long-standing perception of the Coalition as a better economic manager allowed them to coast into office last election with economic policies so poorly developed The Economist recommended voting Rudd to send the conservatives back to the drawing books. Labor will not be so lucky. The unwillingness of successive ALP leaders since Keating to make the case for economic reform has left the party at a natural disadvantage on economic credibility that only a show of fiscal resolve can fix.
government’s school funding plans and longer-term pension reform. Where can the ALP find the progressive spending cuts needed to build a credible alternative to Hockey’s budget? The options are bountiful.
The electorate is being primed to see painful Australians can claim a pension while living in multi-million dollar homes: bring place of residence into the asset test. The wealthiest 10% of superannuation contributors reap over 36% of the policy’s benefits: reform superannuation to stop favouring the rich. The most affluent groups in society benefit disproportionally from generously subsidised university education enabling graduates to earn on average an extra $1 million during their lifetimes: raise deferred contribution fees. The practice of handing out corporate bailouts to politically well-connected businesses distorts business incentives and costs us billions: end them now.
cuts delivered in just a fortnight’s time, yet so far the opposition have failed to On 13 May, Hockey will hand down a budget that may shape our nation’s future. The ALP will have to choose between the simple comforts of blanket opposition, risking irrelevance, or decide to articulate a bold plan for progressively balancing the budget in order to win back the trust of voters.
respond with anything more than kneejerk condemnation. For the sake of having a real battle of ideas in this country, we should hope for the latter.
The ALP’s furious response to
the idea of a "debt levy" or temporary tax is instructive. Many might be at a
loss as to why a progressive party is campaigning hard against a tax that
spares anyone below
$80,000 pa, which is a full $23,000 a year more than the
median Australian worker earns. Of course the Coalition might be owed some payback
after pursuing Julia Gillard over her no carbon tax promise, but channeling
this venom back won’t win the ALP economic credibility in the long-run.
Similarly, just as the carbon tax was not a
“wrecking ball through the economy”, GP co-payments are not a "GP tax that will hit families who can afford it the least”, Bill Shorten claims. The idea’s dubious merits
aside, an exemption for
pensioners and concession cardholders is part of the plan.
There’s a disturbing trend here – lashing out
on progressively targeted budget cuts, while failing to offer substantive savings
measures. Though good ideas, dumping the universally panned paid
parental leave scheme and retaining a carbon price won’t come close to tackling
Australia’s real long-run budget problems.
Coalition rhetoric aside, even without the
Rudd government’s global financial crisis stimulus, budgeting for an inevitably scarcer future
would need to happen. Reports from the federal
treasury and the Grattan Institute are unambiguous: rising health care costs and changing
demographics will eventually leave us in perpetual deficit territory. Even the
modest improvement between the 2007 and 2010 treasury projections below only
deferred the point at which budget deficits become inevitable.
For progressive voters who want to see
Australia remain a prosperous and egalitarian country, confronting the stark
reality of the budget is a necessary task. Despite the Coalition’s assurances
that cuts will fall on the “entire community”, the refusal to touch
superannuation and commitment to gold-plated paid parental leave stretches the
credulity of Hockey’s "we’re all in this together" narrative.
For Bill Shorten to become prime
minister in 2016 he’ll need a credible economic plan, and that means confronting
the Coalition head-on with a series of budget proposals that protect the most
needy while addressing our short and long-term budget problems. The
long-standing perception of
the Coalition as a better economic manager allowed them to coast into office
last election with economic policies so poorly developed The Economist recommended
voting Rudd to send the conservatives back to the drawing books. Labor will not
be so lucky. The unwillingness of successive ALP leaders since Keating to make
the case for economic reform has left the party at a natural disadvantage on
economic credibility that only a show of fiscal resolve can fix.
Where can the ALP find the progressive spending
cuts needed to build a credible alternative to Hockey’s budget? The options are
bountiful.
Australians can claim a pension
while living in multi-million dollar homes: bring place of residence into the
asset test. The wealthiest 10% of superannuation contributors reap over 36% of
the policy’s benefits:
reform superannuation to stop favouring the rich. The most affluent
groups in society benefit disproportionally from generously subsidised
university education enabling graduates to earn on average an extra $1 million
during their lifetimes: raise deferred contribution fees. The practice of
handing out corporate bailouts to politically well-connected
businesses distorts business incentives and costs us billions: end them now.
On 13 May, Hockey will hand down a budget
that may shape our nation’s future. The ALP will have to choose between the
simple comforts of blanket opposition, risking irrelevance, or decide to
articulate a bold plan for progressively balancing the budget in order to win
back the trust of voters.
For the sake of having a real battle of ideas
in this country, we should hope for the latter.