Day to Day Politics: Budget blues, bullshit, and blunders.
You would think that a Prime Minister and his Treasurer who are proposing to cut company tax to 25% over the next ten years would have some idea of what the cost to the taxpayer might be. But no. When the PM was asked in an interview with David Speers on Sky News he didn’t have the faintest idea. When Speers asked if it might be $55 billion he said it may or may not be correct.
Surely a Government expecting to go to an election with economic management and trust at the forefront of its campaign wouldn’t be stupid enough not to have costed the centrepiece of its budget.
When 3AW Melbourne commentator Neil Mitchell asked Scott Morrison the same question on Thursday he also couldn’t answer. “It’s in the budget, look it up” he robustly told Mitchell.
“I haven’t got in front of me. Couldn’t you just tell me”, replied Mitchell.
He didn’t get an answer.
Speers pressed Turnbull a number of times but he continued to be evasive simply saying that Treasury projected the budget to be back in the black by 2020/21 and stay there.
This of course didn’t answer the question. Speers asked again. “I don’t understand what the cost is – what’s it going to cost taxpayers to cut the company tax rate to 25 per cent?” he asked. Later he confirmed that Treasury had costed the company tax cuts
Labor bared their teeth against the government in Parliament.
“The centrepiece of the budget and they forgot to cost it. Even Joe Hockey was more competent than that” said frontbencher Tony Burke. Then he was gagged by the government.
Labor released costings by the Parliamentary Budget Office showing that a cut to 25% would cost the budget $16.45 billion a year by 2026/27.
When told that Deloitte Access Economics director Chris Richardson estimated the tax cut would hit revenue by $55 billion over the next 10 years, Mr Turnbull could only say that Mr Richardson “may well be right”, but warned that “the further out you forecast, there is more uncertainty”.
The fact of the matter is that they had not done the costing and were just plain lying. And they put up trust as an issue in the forthcoming election. Just who are they kidding?
Chris Bowen at the end of Question Time gave a very spirited account of the Budget omission leaving the Government somewhat embarrassed. And so they should be.
2 The Prime Minister and the Treasurer over the past few days have been attacking Labor alleging that it is practicing class warfare and the politics of envy. Morrison says that voters were “over the us and them” approach to governing. He is correct but who is really waging this so-called war? I don’t see the middle and lower classes up in arms over their treatment. But I do see the wealthy and the super-rich getting cranky every time there is a threat to their privilege. Or at the suggestion that they should contribute more to the public coffers. In fact never in the history of this nation have the rich and the privileged been so openly brazen about their economic self-righteousness.
3 This week’s pre-budget Crickey Bludger Track Poll aggregate has Labor slightly ahead of the Coalition 50.6% to 49.4%.
4 Hidden in the bowels of the Budget papers you will find $1.6 billion in expenses for “decisions taken but not yet announced” over the next three years, including $476.5 million in the coming 2016-17 financial year.
The truth is it would be better described as allocations for campaign promises.
5 Another example of budget fiddling is an amount of $171 million for the Great Barrier Reef. It was taken from allocations already announced.
6 Former Treasurer Joe Hockey said people trying to afford a good home should get a good job. In an interview with Melbourne Radio Host Jon Faine in which the PM suggested he (Faine) should be helping his kids with the cost of a house. He seemed to be indicating that all you needed was rich parents.
Bill Shorten retorted in Parliament saying:
“Is that really the Prime Minister’s advice for young Australians struggling to buy their first home? Have rich parents?”
As reported by Latika Bourke in The Sydney Morning Herald, Turnbull had “purchased a $2.7 million penthouse, with knockout views of the harbour and city skyline, in 2008 for his then aged 23 daughter, Daisy Turnbull Brown”.
My thought for the day:
Life is about doing things. Not having things.
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Max Gross
Return to home pageGood to see David Speers at SKY asking the hard questions : I hope he isn’t disciplined for this.
By the way, did you hear Tony Abbott reminiscing in the parliament yesterday : evidently in his younger years as a politician he was handed an envelope by a ‘well known millionaire’ and told that it was his Christmas present. It contained $5000 which as he says, the Abbott family could have used at that time. So, what did he do, well he didn’t hand it back , instead he went to Bill Heffernan and asked him what he should do. Bill told him that he should give it to the Liberal Party – it’s not clear what he actually did with it.
We jumped the shark with this bloke, I’d feel a lot more comfortable if he was out of politics : over to you Warringah voters.
Ummm, this is standard for both sides in what the Canberra press call the “black hole attack”.
http://www.theguardian.com/australia-news/2016/may/05/black-hole-attack-sucks-malcolm-turnbull-into-budget-twilight-zone
The figure was always going to be released but was held back as an attack against Labor, but in this case the tactic backfired for Turnbull.
What it does illustrate yet again is how low politics has gone in this country, where even a simple thing like releasing costings undeniably in the public interest are used for attacks against an opposition rather than for their intended important purpose of keeping the public informed.
Mobius, last night I nearly put up a comment wondering how long it will take for the government to scream “black hole ” in response to Labor’s budget reply. It took them 12 hours.
“Speers pressed Turnbull a number of times but he continued to be evasive simply saying that Treasury projected the budget to be back in the black by 2020/21 and stay there”.
Both the past and present Prime Minister and Treasurer talk about budget repair like the Global Financial Crisis didn’t exist. They also talk about bringing the budget to surplus. All this does is expose those that are responsible for controlling the National finances to their collective lack of understanding of the National Accounts Income – Expenditure model in Macroeconomics.
This can best be explained by using a couple of possible scenarios: (a) If households and firms spend less than they earn (tend to save), and Imports are slightly greater than exports, then the Government budget will always be in deficit. (b) If the Nation is running a Current Account deficit, that is Imports are greater than Exports, which is accompanied by a Government budget surplus of equal size, then households and firms will be spending more than they earn (borrowing). This is unsustainable since Australian households are already experiencing massive debt problems.
Migs this was a tactic started by Howard against Beazley’s black hole, which was actually Keating’s that was a flow on.
Ever since then the meme of black holes has taken root, exacerbated in large part by Kennett, who set the framework for this form of attack that has been taken up especially by the Liberals.
http://www.abc.net.au/radionational/programs/themoney/budget-2016:-debt-and-deficit-rising/7383866
That ABC National Money piece is worth listening to for not only a good laugh on how wrong so many of the commentators are and the thrust of the piece is, but to listen to what John Daley of the Grattan Institute has to say on how the media in the first instance have framed the evil deficit meme into misinformed public opinion that now has political parties and many independents too scared to counter it for fear of the public backlash.
In no other advanced country is the worry and fear of government debt by the public more pronounced than in Australia. It is given far more importance for government policy in our public opinion than in just about any other country, where most don’t even rate it or are only mildly concerned about it.
Yes it was our media who framed and cemented this invalid belief in our public, but it was a couple of politicians who started it, Kennett in the first instance followed by Howard.
It would seem that their political “smarts” are on a similar par as their fiscal competence.
The black hole skirmish seems destined for a good run. Most economists seem to be suggesting that a ten year forecast is about as handy as an ash tray on a motorbike. It allows for plenty of speculation with no prospect of any decent scrutiny.
Speaking of scrutiny, the ABC feed yesterday was an absolute gem. One of the postings caught my eye;
“Because this is no ordinary budget, it’s no ordinary sitting week.
Normally we have what’s called Budget Estimates, where Senators are able to grill senior public servants and ministers about elements of the budget.
As ABC reporter Francis Keany reports, it usually lasts for two sitting weeks and in the past has featured fake pipe bombs and broken marble tables.
But because we’re likely to go to the polls this weekend, we’re cramming all of that into just two days.
It’s going to be jam-packed today.
This morning highlights include the Department of Parliamentary Services (who run Parliament House), the Bureau of Meteorology and the Great Barrier Reef Marine Park Authority, the Australian Human Rights Commission + the Department of Agriculture.
This afternoon we’ll have the ABC, AFP, ASIO, Immigration and the Department of the Prime Minister and Cabinet – we’ll have NBNco tonight.”
http://www.abc.net.au/news/2016-05-05/politics-blog-thursday-may-5/7384322
“Surely a Government expecting to go to an election with economic management and trust at the forefront of its campaign wouldn’t be stupid enough not to have costed the centrepiece of its budget.”
They will take the risk if they can avoid the scrutiny.
Thank you Mr Lord. Take care
Not much mention anywhere on Bill Shortens Budget Reply which was a pretty fine effort .
He got a pretty enthusiastic response from the Gallery and people were hanging around after the event to shake he and Tanyas hand and congratulate them.
He got a standing ovation from the Gallery, but from what I heard, the ABC cut that.
Bills Reply for those who missed it
Um, wrong link, Cornie. Try this one:
I am not sure they were lying, omitting it may be more precise, the idea of a huge hit to the budget to look after companies whose turnover approaches a billion a year is using trickle down economics in the face of the panama papers. It trickle down worked America would be in a great position with social equity, so to the UK instead the opposite has occured, this budget with further damage the economy, it is time to get serious about what makes a domestic economy function, we can not help much the economy as it impacts overseas but we can directly impact the domestic economy and this budget is a further concentration of wealth damaging Australia. It should be noted that Turnbulls Goldman sachs mate who got into treasury in America vandalised their economy for the benefit of his “former” employer, Turnbull is doing the same.
Bill Shorten’s reply kicked the Coalition into a cocked hat. Coalition supporters might well be shocked how he dismantled it item by item.
Some Labor supporters must be sitting up and taking more notice as well, especially those who were prepared to sink the boots into him. He has been accused of being too far right, but here he demonstrated the differences between Labor and the Coalition – and it is quite a gap.
I love the bit about how hard it is to tackle Climate Change and how easy it is to deny it – and Turnbull knows this because he has tried both.
The neglect of tackling Climate Change and of the possibilities of jobs in renewable energy and the dangers to people and the environment are part of the huge gaps in the Coalition Budget. So much of it is a pipe dream about some mythical “trickle-down” effect, with the emphasis on “trick”. And look at the borrowing of policy from Labor.
Bill summed it up nicely at the end with his emphasis on people. He has worked with the business people with capital and with the workers who work for the capitalists. He knows about people. The Coalition, with its emphasis on money and the manipulation of people, leaves them without a heart.
Mods or Michael, could you remove the link I provided, Backyard Bob has the correct one :-}}
Still bleary eyed from getting home late from Bills Reply
Someone help me out here – 90,000 DSP recipients are going to have their cases reviewed and this process is apparently going to help with the alleged NDIS funding shortfall. I’m curious as to how any savings prediction can be made from a review process unless the Government has already determined that it will kick a certain number of people off the benefit.
Or, are they just extrapolating from the results of previous reviews? In other words, making shit up?
Bob:
Right wing ideologues engaging in these sorts of processes aren’t interested in savings- their motivation is to punish those weaker and less fortunate than themselves.
We see the same things with their calls for drug testing. The record of those policies in the US shows that they’re quite willing to spend heaps more (and likely toss bones to their cronies in the laboratories in the process) while detecting only a very few instances of drug use.
Bob, that’s up my old neck of the woods. It’s quite a simple process really: you tell lies. I was writing legislation and policy for the DSP when the Howard Government introduced their Welfare to Work (W2W) policy that was going to see the DSP population drop because a huge number of recipients had grabbed hold of the government’s inititiative and had found employment. Three cheers for W2W.
It was a proud, beaming Joe Hockey who fronted the media and announced that W2W was an amazing success because it had seen the DSP numbers drop from B to A. The trouble was though, that they’d actually risen from B to C.
It was three months before we could release the official figures, which gave us time to write new legislation that would see people taken off the DSP and placed on other pensions, for example people of retirement age being transferred to the Age Pension.
If you get a chance, look for one of my early articles on The AIMN where I wrote about the deceit surrounding this. I can’t remember what it’s called, sorry. If I was on my computer I’d look it up for you.
Here it is:
Surely a Government expecting to go to an election with economic management and trust at the forefront of its campaign wouldn’t be stupid enough not to have costed the centrepiece of its budget.
They were stupid enough to believe that the Labor mob wouldn’t catch on
I hope that this unbelievable crass arrogance and deceit costs them a tptal devistation at the election.
Let us remind everyone on facebook about this repeatedly and closer to the day.
You writers and commentators on AIMN, are better than I am at writing this stuff help me!
Don A Kelley: I have been banging on about this for ages. This is simple accounting and no one can refute this. There is no “theory” involved which might be considered contentious.Yet no one brings it up in a question or an interview, so shallow and/or ignorant are they. All we can do is spread the word and hope the penny drops for some people.
A critical problem is the mainstream media’s abject lack of journalistic nouse. Time and again interviewers and reporters at presssers allow wild, unsubstantiated claims (aka lies) pass without batting an eyelid. The Turnbott team get away with daily howlers a simple Google check could expose!