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August 11th 2014 print

Peter Smith

The Gang That Can’t Think Straight

A tin ear for how proposals will sound to the electorate, a brace of back-downs and capitulations, ineptitude in implementing what should be popular measures -- Abbott & Co. aren't stupid, so why does this government seem so determined to appear otherwise

no brainerI often heard the expression ‘it’s a no-brainer’ when working in and around the banking industry. It usually meant that insufficient thought and consideration were to be given to some action or other which eventually turned into a cock-up. No-brainers were, literally, just that, brainless.

This came to my mind when thinking of the government. Presumably someone in the inner sanctum thought it a no-brainer to charge single mothers with three kids $7 to visit a doctor while spending the revenue on new-fangled medical research. It must have been a no-brainer (read brainless) because an ounce of thought would have seen it dumped.

How about the proposed amendments to 18C? Sure, 18C is an egregious affront to free speech and should not have been legislated in the first place. But, taking something like this away requires lots more finesses and persuasion and consultation than does objecting to its implementation. Senator Brandis was clearly not up to that job.

Ineptitude in prosecuting the proposed amendments to 18C was then compounded by the character of the back-down. It was surely a no-brainer masterstroke to marry the back-down with the need to be ‘Team Australia’ in fighting terrorism. First off, good luck in charming the Muslim lobby into supporting measures to combat terrorism if there is any suggestion, Allah forbid, that those terrorists might just be Muslims. Second off, how the heck does nobbling free speech help in combating terrorism? To be able to speak out fearlessly is surely part of the armoury we need to have.

But back to economics after that short detour. Wasn’t it astounding, at least to those with an IQ of more than 90, when Eric Abetz had his no-brainer moment in proposing that job seekers apply for forty jobs a month as a condition of receiving the dole? I suppose this brainless proposal had the side benefit of briefly taking the pressure off Joe Hockey, who is looking more petulant by the day as people just simply don’t get how good he thinks his budget really is.

I suppose he thinks it must be good because the editor of The Australian said so. “The product is sound,” intoned the paper’s editorial. Well, here is news for Mr Hockey. The editorial writer who penned those words doesn’t know what he’s talking about. The budget is, in a word, ‘crap’, to quote the Prime Minister’s pre-election sentiment in regard to another topic.  The no-brainer in this case was that we must all contribute to fiscal repair.

The Australian took an example of a single parent with two children who is earning $45,000 a year and thought it OK that the net benefit flowing to this family would be cut by 24% under Hockey’s budget. That is just plainly unsellable. We simply can’t turn the clock back to a self-reliant age, however much conservatives like Hockey (and me) might pine for it. Watch Poirot on TV if you suffer from nostalgia. To get anywhere in today’s world we have to be pragmatic.

Often the discussion on the budget refers to the need to cut middle-class welfare. Quite right too; but a single parent with two children on $45,000 is not in the middle class. Neither is a pensioner couple on a basic pension of $30,000.

Then we have the repeal of the mining tax being linked to getting rid of the baby bonus and other welfare measures. Is this a bluff that only Hockey can comprehend? The tax raises no revenue to speak of, yet potentially impedes mining investment. The latest (July) employment figures underscored again that the trend rate of growth in employment is only two-thirds, roughly speaking, of the growth needed to soak up increases in the working age population.

We need investment and jobs. Exactly what strategy lies behind making the repeal of this tax contingent on reducing welfare expenditure? Get rid of it before all faith is lost in this government’s common sense.

Talking about common sense can someone explain why billionaires seem uncommonly lacking in it and yet make so much money? Bill Gates and Warren Buffet seem adept at making nonsensical statements about inequality and income tax rates in the US. Buffet for example thinks his secretary pays a higher tax rate than he does, completely overlooking the fact that his income comes from companies that have already paid corporate taxes.

Now we have our own billionaire to compete in the idiot-savant stakes with those in the US. And, no, I am not talking about Clive Palmer. Welfare bank cards which can’t be used for naughty things? Was that for real? Andrew Forest should stick to mining and Tony Abbott should understand that making a billion doesn’t make you Einstein.

I have a genuine no-brainer for Tony Abbott. Get some advisors with common sense, withdraw the budget and replace it with one that concentrates on tackling middle- and upper-class welfare, dump your self-indulgent PPL scheme, and sack Hockey. I would suggest you replace Hockey with Malcolm Turnbull if he wasn’t doing such a good job in communications. It’s not that I admire Mr Turnbull’s politics, but I suspect he might be able to put a budget together that doesn’t simply hand the reins of government to Bill Shorten.

 

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