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July 07th 2014 print

Peter Smith

Why Shorten Loves the Budget

Don't be fooled by the Opposition leader's public grimacing at the budget's cuts and changes. Under no obligation to provide realistic alternatives, he is free to enjoy the shrinking popularity of a government that determined to shoot itself in both feet

foot shootFor a government that has stopped the boats while, at the same time, steadying relationships with Indonesia; is on the verge of getting rid of the ‘big new tax’; has set some steps in motion to repair the budget; is forging free trade agreements and, to boot, is opposed only by an uninspiring ex-union apparatchik, things ain’t looking good. They might improve when the carbon and mining taxes are gone and some other budget measures are negotiated through the Senate. But you wouldn’t want to bet on it.

The problem for the government — apart from the short memories of hundreds of thousands of ‘swinging voters’ — is that the budget is being successfully sold by Bill ‘Fair Go’ Shorten as being unfair. And he doesn’t have to raise a sweat. This gift has been handed to him on a plate by a government showing disquieting signs of setting itself up to fail the first duty of any sane and responsible government in its first term, which is to get re-elected. The reason is not hard to find.

According to Treasurer Joe Hockey, we all have to contribute to fiscal repair. Really, you might ask, even the unemployed, widows and orphans, the aged, the poor? Therein is a clue to the budget catastrophe. If I were Tony Abbott I would sack (“reshuffle”, I think, is the euphemism) Hockey and Mathias Cormann before they do any more damage by defending the indefensible. They are political nincompoops, even if otherwise astute.

By defensible I don’t mean in the insular halls of right-wing think tanks; I mean out there in Voterland. Previously, I have largely restricted my criticism of the budget to the Medicare co-payment package and, particularly, to the risible political nous of extending the pension age and reducing pensions against community standards. But the delay of six months in paying any unemployment benefits to some of those under 30 years of age is also a gift to Shorten.

I heard Michael Kroger say on the Bolt Report that Shorten’s discomfort would begin when he has to announce his alternatives. How daft can you get? Shorten doesn’t have to set out his alternatives, he just has to cook the government slowly with the gas they have generously made available; to paraphrase another Labor leader.

He can make his promises as vague as he likes, and as late in the piece as he likes, if voters have turned off the government. ‘Don’t expect a free kick from Bill’ should be figuratively imprinted on Abbott’s forehead.

Also, Abbott should take no comfort in Treasury Secretary Martin Parkinson’s conversion to the conservative faith. Beware of Greeks bearing gifts. Sure, Parkinson is right; it is a cheap shot for the Opposition to say that budget savings are unfair. But the trick is to ensure that those shots will look cheap to voters. On that scale you have to give Hockey and Cormann an “F”apiece.

Cutting aged pensions, making the poor pay for doctors’ visits while lavishly spending the proceeds, leaving some of the unemployed destitute while introducing Abbott’s extravagant Paid Parental Leave scheme is just not the stuff of cheap shots. Shorten has been gifted gold-plated ammunition.

The key to reducing welfare is to minimise rorting of the system and means testing. For example, taking free medical services away from the poor is politically untenable. Making sure only the poor get free treatment may be feasible. Reducing old age pension benefits is untenable. Tightening the income-and-asset criteria may be feasible. Denying unemployment benefits is untenable. Imposing more stringent conditions on those in receipt of unemployment benefits may be feasible.

It is also important for a conservative government in the business of reducing and cutting benefits to seek allies. I don’t mean the usual and useless suspects already on onside, no matter what. In the current circumstances, the genuinely disabled and their carers are potential allies, as are charitable organisations.

Australia simply cannot afford the promises of the NDIS, or to care for the genuinely poor, unless savings are made elsewhere. Provided those savings are seen to be fair, i.e., based on better policing of benefits and means testing, conservative governments may be able to enlist allies and pull it off, even in today’s entitlement society.

Anyway, isn’t this what conservatism (in part at least) is all about? Those who can help themselves should get on with it without dipping into other people’s pockets. Those who can’t help themselves should be helped. It is not a question of everyone sharing the burden. Some people can’t share the burden. Maybe if Hockey and Cormann had started out with this simple guide to conservatism they would have a sellable budget and Shorten wouldn’t have his free ride.

 

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