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June 15th 2014 print

Peter Smith

How To Lose Votes And Alienate People

Conservatives have been summoned to rally around Joe Hockey and his budget, a mostly sound and sensible package. Trouble is,they are also being asked to support an inept co-payment provision and aged pension changes that are politically poisonous

hockey mug2I am convinced that conservative commentators, except for me of course, are complete dolts. I had thought this description applied only to those on the left but, no, it is apparently a more general malady.

To a man and a woman, to IPA and CIS spokespersons, to Andrew Bolt to The Australian editorial writers, all and sundry espouse the need to cut welfare expenditure to repair the budget and then cosy up behind the government. Apparently the government isn’t getting its message across clearly. It didn’t lay enough groundwork before the budget, etc., etc., ad nauseam.

Where have I heard that clap-trap before? Oh, yes, I remember, that was the only fault of the Rudd and Gillard governments. If only their messaging and communication skills had been better all would have been well, that was the Labor line after the last election. Give me a break!

Charging a Medicare co-payment on ‘widows and orphans’ and then spending all of the proceeds on some fanciful medical research is bad policy. You can’t sell that ‘package’. Dale Carnegie couldn’t teach how to sell that. How about sweetening the deal with an expensive paid parental leave scheme? Makes things worse? No kidding!

Well, not to worry, the shonky hawker says, his foot in your front door as he digs deeper into his policy suitcase, has he got a deal for you. Let’s slug old age pensioners; paying them less means more for me and you. Mostly you can hear doors banging, as the votes float away.

Can we please get it straight? Most of the cuts in budget are well-targeted and defensible. But the co-payment ‘package’ is completely inept at best, and the aged pension changes are politically poisonous.

Pensioners, with the wisdom of age, tend on balance to vote conservative. The prospective erosion of pensions against community standards is definitively pernicious. Would you vote for someone who wanted to cut your modest income by about 1.5% a year? This is the average rate that real earnings grew over the past twenty years and the rate we can expect them to grow in future, under reasonable assumptions about productivity growth.

Let me say quite clearly as a Liberal voter, now in Tony Abbott’s electorate, that I will vote informal if the government persists with its age pension policy. I cannot square my conscience with a policy of progressive and continual reductions in the aged pension against community standards.

Joe Hockey is out there, stridently defending the fairness of the budget without referring to the cuts in the pension. Does he think people won’t notice? I heard Christopher Pyne a short while ago saying it was wicked to suggest that old age pensions were to be cut. No Mr Pyne, it is wicked to cut them and pretend it won’t happen because they will be indexed by the CPI. To reiterate, that is cutting them by around 1.5% a year; by 25% each twenty years.

Let me end about the same place I began. Am I the only conservative with a basic knowledge of economic statistics and arithmetic? Or, alternatively, the only one who doesn’t robotically toe the party line? Or, alternatively, the only one wanting to see the Abbott government re-elected? Take your pick.

Declaration: I live in modest circumstances, the courtesy of bad management and two marital breakdowns. However, I downsized sufficiently so that I do not qualify for the aged pension and, the great uncertainties of life aside, nor do I expect to. In other words, my concern is purely and objectively and altruistically about public policy.

 

 

Peter Smith, a frequent Quadrant Online contributor, is the author of Bad Economics