Saturday, May 17, 2014


Political wisdom always insists the first budget should be the harshest.

Is that a tin ear?
Image from dailylife

But has this one gone too far?

As I suggest in this column for today's Canberra Times, I think the problem is rather that it doesn't do anything to make Australia 'fairer' . . .


If money talks, this budget was utterly eloquent. Until Tuesday we only had words to vocalise what this government’s all about. Now that’s changed. The coalition has translated verbiage into action; it’s shaping our reality to match its rhetoric. This is Tony Abbott’s Australia and may the devil take the hindmost. Two acerbic facts, two astringent truths, are become evident.

The first is this government is not about mouthing ideological platitudes; it’s living them. The fiscal changes ushered in aren’t superficial: they go towards fundamentally altering the country. To get your head around the budget you just need to understand two ratios. These are the amount of government spending to GDP, and government revenue of GDP. Under every year of Labor, spending was greater than revenue. There were, first, reasons (the global financial crisis dictated the need for stimulus) and later, excuses (the economy hadn’t picked up). But this fundamental reality remained.

Abbott’s changed that. Spending’s been slashed. To understand the dramatic difference in the way this government views the world to the way Labor did, just look at hospitals. Kevin Rudd (in his first incarnation) promised the federal government would, effectively, nationalise this responsibility. Remember that? It was one of his big new plans that never went anywhere after that sudden, emphatic announcement in Queanbeyan.

Well, Abbott hasn’t bothered with a plan; he’s acted – but in reverse. Responsibility has been decisively sloughed off to the states. As far as this government’s concerned it’s up to them to provide us with a decent health system. Abbott wants nothing to do with it. Spending increases year-on-year but the federal revenue required to pay for proper care doesn’t. Rather than attempt to fix this, today, with a sudden twist, pike and volte-face, the feds are out of hospitals. It’s now up to the states to demand the inevitable increase in their GST that’s necessary to fund our health habit.

This shows the political smarts with which the budget has been put together. Our problems – and this is a huge headache – have just been shovelled off elsewhere. Don’t like the hospitals? Well, says Abbott, don’t blame this government; it’s a state issue. Labor hopes it can bank the outrage but the government’s done something far more sophisticated. Changed the entire framework of debate. Abbott says this is simply not his problem any more. It’s Tony’s two-hand card trick. Slight of hand perhaps but the question is, will these structural changes will be entrenched and accepted by the next federal election?

This budget is driven by dogma. Take the mean-spirited changes Kevin Andrews ushered in for unemployment benefits – a six-month qualifying period. Despite the fact the first month is precisely the time young people need some assistance applying and getting the right job. But not in Andrews’ world. He expects them to leave school on Friday and find their first job on Monday. Hah! He’s forcing every Australian into his own religiously inspired, straight-jacketed template of family life. It’s now up to mum and dad to tell their youngsters what to do; the children’s role is simply to obey. Amen. Yes, this will hit the poorest families hardest, but that will teach them to work harder. Bah humbug!

What’s the political reality here? Who’s going to change their vote as a result of this budget? Today, I’d guess quite a few, but in three years time? The government will be hoping everything’s bedded down by then. There’ll certainly be enough money in the coffers to distribute a few rewards by then and the anger at the changes will be focussed elsewhere. The rich will get richer, much richer, as a direct result of this budget and inequality will rise. The only question is what will happen in the Senate and how long until the election. This doesn’t mean voters will necessarily opt to return to the past – it’ll be up to Labor to provide a vision for the future. But Bill Shorten hasn’t done that yet and memories of the dysfunction of the last government are still too raw to suggest that this could be the first one-term government since 1932.

This week did, however, reveal the government’s weakest link. I’m no fan of Finance Minister Mathias Cormann, but contrasting him with Joe Hockey in the lock-up provided a stark contrast. One was on top of his game, relishing it, the other slouching, bombastic, and out of their depth. Hockey’s reasoning was flabby, his words verbose and empty, his grasp of detail loose. He’s not up to the job – that’s why the sales job has fallen so flat. Then Hockey lost another day, crying in his petulant way that it was somehow “unfair” of Laurie Oakes to photograph him smoking a cigar. If you don’t want to get caught, Treasurer, don’t do it.

He’s an indulgent wimp, ready to inflict pain on others but noticeably unwilling to bear any himself. He’s out of contention, in future, for the leadership because he’s failed to make a convincing case for this budget. Hockey’s was a lacklustre performance. He may yet learn to empathise more deeply with those who never get the job they want. Opposition will grow and the government’s still got to find a way of navigating it through the Senate. Take nothing for granted.


  1. Hi Nic, please continue to criticise the poorly conceived federal Budget, not just for its lack of fairness, but for its economic weaknesses. But I take issue with your claim elsewhere that Tony Abbott is a "DLP PM". Senator John Madigan (DLP) has strongly criticised the Budget for its impact on families. Abbott's Budget was apparently crafted by (illiterate) economic libertarians - a long way from the socially conservative, protectionist, agrarian/industrial socialist instincts of the DLP. The Budget may suggest some modest links to the DLP, past or present, but surely there was much greater influence by the Institute of Public Affairs and its ilk. Regards, Louis

  2. Dear Louis,
    Thank you and I apologise. I'm afraid I unfairly ignored the criticisms Senator Madigan has levelled against the budget because I was so desperate to get the DLP link in (which is, in fact, in my subsequent column which may not have been posted at the time you left this response). You're right about the IPA, although they have also denied the linkage. That's what I've attempted to suggest in both of these columns . . . ideologically, the budget's all over the place.
    Thanks again.

  3. Dear Nic, thanks for the reply and for holding the government to account. I don't support the DLP, or any of the parties for that matter, but I do care about good public policy. It annoys me when governments put ideology ahead of sound evidence and expert advice. Regards, Louis

  4. What about the Abbott 'wink' Sir Nicholas ?