Joe Hockey gave a speech at the Lowy Institute on Thursday, 6th February to outline this year’s G20 agenda. The mainstream media practically ignored it and for good reason; the public just don’t understand, or are not interested in, the detail. If you have the patience, I recommend listening to it. Its author (whoever it was) has found the words to fit the timing, the scene and importantly, the audience.
“Too many tax payers’ dollars have been spent on corporate and middle class welfare and too often previous governments have been drawn into areas that are better left to the private sector,” Joe Hockey said. He went on to say, “The budget that we inherited from the previous government reflects the entitlement mentality that has dominated government decision-making over recent years.”
What he didn’t say was that the Howard government started most of that ‘entitlement mentality’. Mind you, his reference to ‘recent years’ could include the Howard era and could be interpreted as an acknowledgment that they share the responsibility. But he did not actually say that. He did, however, acknowledge that the Australian economy was in its 23rd year of uninterrupted growth. Interestingly, when you break that down on a two party preferred basis it is 12 years of Labor growth and 11 years of Conservative growth; so much for all the claims about who is better at managing the economy.
You may have noticed a change in the rhetoric now being delivered by our treasurer since he took over. One could say he has seen the state of the books, he has looked at the forward projections and in an arresting moment, after first thinking the roof had fallen in, he has realised Labor’s supervision of the economy had not created a budget emergency, rather, they were skilfully managing a full-scale world monetary meltdown in recovery. His G20 speech contained all the words you would expect from the man who had just been given the keys to the safe, who now knows how much is there, how little is coming in and how much of what is going out cannot be stopped. He also knows the cost of the promises his boss made at the last election. It is not pretty and Joe knows that rather than his boss being the one to carry the can, it is he and he alone who will cop the blame if the spaghetti hits the fan. For all his blustering and bellowing prior to the election, the raw truth has now hit home and he has nowhere to hide.
Thus his G20 address was specifically targeted. He has called on the cashed up private sector to get off its bum and do what it is supposed to do. My immediate thought was: good luck with that! But there is another problem. There is no one else in the government who is smart enough to help him. Joe’s only friend is Treasury and their predictions are, to say the least, uncertain.
To give him his due, pretty much everything he said at the Lowy Institute was on the money although I don’t think the audience would have found any joy in hearing it. The members of the private sector he was telling to get off their collective bums were shifting uneasily. “The business sector must shoulder more of the burden. It must restore corporate accountability, and rely less on government assistance. It must stand on its own feet, and it must pay its fair share of tax,” he said. To the private sector, this is new stuff. Sitting inside the comforts of their ivory towers they are often quick to point out what government should be doing for them (usually Labor governments), but not used to being told by conservative governments what they should do for the country. Hockey was playing the John F Kennedy card, “Ask not what your country can do for you. Ask what you can do for your country.”
His plan looks like a re-invention of the old trickle-down economics theory; the one Ronald Reagan proved didn’t work. If the treasurer thinks that by lifting red tape and encouraging innovative and creative thinking he will attract sufficient investment by the private sector to kick-start a slowing economy, then he would have to be a supreme optimist. Again I say good luck with that.
Speeches given at the Lowy institute are generally targeted. It was not to soften up the public for a razor sharp budget as Remy Davidson of Monash University suggested. The public were not even listening. He was aiming his words at the corporate sector. Joe was serious about the long term and he has every reason to be. He will most likely NEVER deliver a surplus budget. For him, that hurts.
One wonders where Tony Abbott fits into this bleak equation. The reality is, it doesn’t matter. He knows little about economics, has nothing of value to contribute and notwithstanding his previous experience as an amateur boxer, I suspect he would be loath to take Joe on in a fiscal punch up.
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