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How Long can Hockey Survive?

For someone whose popularity was the envy of everyone in the new Coalition government earlier this year, Joe Hockey must be wondering what the hell happened. His pre-budget popularity among all voters was 21 points on the positive side (51% for and 30% against). Then came his first and possibly last budget. That budget is best described as a fart bomb, the aroma of which just won’t go away.

From that point on Joe has suffered from a lingering case of foot-in-mouth disease. Some of his revealing comments following on from his earlier, ‘end of the age of entitlement’ rant, and his dancing to the ‘best day of my life’ music, on budget night, include ‘poor people don’t drive cars,’ and just the other day a mind boggling, ‘we will find any way we can to take money out of universities,’ as said to Phil Coorey at the Australian Financial Review.

So, it’s pretty clear his star has hit a brick wall not just with the electorate generally, but with LNP voters as well. The odd thing is that Joe himself is genuinely surprised at how badly his budget has been received. So one has to ask, did he not think that being unfair to the disadvantaged would rebound on him? What was he thinking? Were the unpopular budget measures his idea, or was he encouraged to go down that path by others? Was he set up?

debt One thing is for sure. The Treasurer owns the budget no matter who else contributed and Joe will own this one for years to come just like John Howard owned the 1982 budget that preceded Malcolm Fraser’s defeat in 1983. The full impact of Joe Hockey’s budget is yet to be realised because the economy is in much better shape than it was in 1982. That’s the good news.

The government, however, campaigned furiously on fixing the ‘debt and deficit disaster’ and that is the bad news. They did so not realising the nature of the problem which was, and is, falling revenues and excessive tax expenditures. They still don’t seem to realise it, or do they? They still want to curb spending but in fact are doing the opposite. Debt is steadily increasing. Perhaps that is why Tony Abbott wants a more mature discussion about the GST. They know they have to find some new money from somewhere.

Sooner or later the numbers will show them up as utter failures. They have already left it too late. And someone will have to accept responsibility for it. It almost feels like poetic justice that while Peter Costello benefitted hugely from a barrel load of money coming in from China and making him look so good, Joe Hockey’s barrel has shrunk to a tea pot and he is looking so bad.

music When the money flows the music plays. When it stops the music fades.

Costello was never put to the test. Hockey is being tested severely right now and is not looking good at all. The analogy being, that when things are good the music is playing. When things go pear-shaped, the music begins to fade.

If the budget is ever to return to surplus, revenues must rise. That is fundamental. The only way that can happen, short of a revival in China, is to raise taxes and cut tax expenditures; the exact opposite of Abbott’s mantra about lower taxes. They won’t do it. What a delicious opportunity for Labor to exploit. If Bill Shorten and Chris Bowen can climb out of their lethargic slumber and show the Coalition up for the failures they are, Abbott will have to respond.

budget1 The likely response is to blame the Treasurer. That’s the way of politics. How long has he got left? Probably one more budget and if it does include tax increases of some description, Joe is screwed. If it doesn’t, by 2016 the Coalition’s economic credentials will be screwed and they will have to go.

The Coalition could have avoided all this last year by campaigning on Labor’s leadership failures and little else, but they had to engage in chest beating about the economy, pointing to their so called success while Costello was Treasurer. They chose to highlight, what seemed to be Labor’s economic failures. In reality, they shot themselves in the foot.

They didn’t hear the music fading. In 12 to 18 months’ time the music will stop.

29 comments

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  1. Lee

    Isn’t it wonderful? Even Joe’s clever wife can’t help him with this one. Oh I am so enjoying his demise.

  2. Kerri

    Joe is genuinely surprised isn’t he?? And he has become truculent in his non comprehension!!
    Trying to psychoanalyse Joe, he seems to have been raised as the chosen one and now he has reached the top just wants to shit on the rest of us. And why should we complain?? He is the golden one!!! He has the plan that we should simply accept because, because, because……. well,….. because he’s the golden one and he is right!! All of those who disagree just deserve to be punished because Joe made it to the top and we didn’t!!!
    Such a selfish spoilt brat!

  3. John East Gippsland

    As I recall, Tony Abbott deliberately deferred a scheduled meeting (to patch up relationships) with the previous Indonesian president in order to help Hockey in his Budget preparations. So there’s plenty of blame to share around here.

  4. Blanik

    Just so pretty to watch!

  5. bobrafto

    I truly believe that the song ‘The best day of my life’ that Hockey played was the ‘short play’ version.
    enjoy

    The Ode to Joe

  6. Matters Not

    They did so not realising the nature of the problem which was, and is, falling revenues and excessive tax expenditures

    Perhaps. But if anyone in Opposition was doing even a bare minimum of homework then it was patently obvious that governments were in trouble on both the inability to raise revenues and the excessive tax expenditure on things such as superannuation concessions, negative gearing and the like. If Hockey didn’t know it, he’s in the same class as Abbott – bone lazy in the policy and intellectual domains.

    On the revenue side, it’s getting worse with so many Australian and international companies laundering monies through tax havens. The most recent example is Luxembourg. The problem is compounded because countries like the US are most reluctant to act, and now with the election of the Grand Old Party things will only get worse.

    Watch the G20 make the right noises but expect little action and certainly no effective action.

  7. halsaul

    Agree with Matters Not – bone lazy in policy & intellectual domains. This gov. is doing nothing to lay foundations for Economy in future. Stopping carbon trading scheme – destroying nbn – blocking ability for worthy brains to access higher education because of costs, No Science Minister & gutting C.S.I.R.O FUNDING. That’s a government “wrecking the joint” for political revenge on Labor. Not even close to being worthy of being given power to run Australia. Abbott as Prime Minister is beyond bizarre, more like a sick joke.

  8. John Lord

    And what might the economic update reveal?

  9. Jennifer Meyer-Smith

    How could Hockey and the other LNP Neanderthals be so surprised?

    Almost from Day 1 of this abhorrent government, Abbott and his Bunch of Mercenaries have set out to destroy policies and institutions whether they were operating well or not.

    Every day it seems, Abbott or Joe or Morrison or Abetz or Andrews or Hunt or Dutton etc, etc, have told us what they are going to stop, replace or destroy with a program or policy that nowhere nearly covers the needs of the people and socio-economic considerations involved.

    I admit I’m gloating. I also admit I can’t wait for them to be exposed when they concede defeat.

    I am so angry and disgusted by their un-Australian and undemocratic conduct, I doubt I will feel sorry for them when they are at our mercy.

  10. franky

    Heads up; “old people don’t drive cars”? Isn’t the quote “poor people…”?

    Thanks Franky. Don’t know how that happened.

  11. xiaoecho

    Poor Joe. Raised as ‘the golden boy’ as Kerri said, given every advantage in life by his parents, marrying a clever woman and having the charm to get elected, he sincerely believes he pulled himself up by his boot straps and deserves, not only to be admired, but also his exhalted place in society mixing it with billionaires. He absolutely has no idea of his obligation to society as a whole. To him the working class are a drag on society and are to be, if not punished, at least discouraged from being the working class. It doesn’t occur to him to nurture the ordinary worker as the creators of the country’s wealth and their wages as the lifeblood of the economy. He genuinely thinks the top 1% create a country’s wealth. Joe truly is uncomprehending of the depth of disgust at his budget. He expected to be hailed for ending the supposed ‘age of entitlement’ because he lives in a bubble where he only ever mixes with those who are a reflection of himself. He also sees no value in people who are powerless. It is a predatory mindset, we all know the type – people who are rude to the waiter or chambermaid but suck up to those who they consider to be better than them (has anyone seen the pic of Joe at Ruperts table during the IPA do? Joe looks beatific in the powerful billionaires presence) We are seeing the real Joe for the first time in his public career. He is not a nice man, but he thinks he is.

  12. Billy muddle moir

    Wow Xiao you have described him and many other ‘believers’ to a ‘T’.(perhaps some of us??) Little joey’s points were scored crushing Gillard and swan, with innuendo and lies, on the Sunrise show and his great helper and friend was ho ho ho ho, father xmas aka the lemon.
    Now his lies should come home to roost. It will need to be long and painful process because the rabbott revels in his treasurer’s discomfort and little billy is still cogitating over where all this coalition slush money comes from, when labor left such an economic crisis!

  13. Matters Not

    Abbott and his Bunch of Mercenaries have set out to destroy policies and institutions

    As I argued some time ago, the Abbott government, under the intellectual guidance of the IPA, is all about creating a new ‘common sense’. While it’s about ‘destroying’, the existing ‘common sense’ (necessary but not sufficient) it’s also about providing a new way of thinking about the world.

    People need to read a little of Rand, Hayek, Friedman, von Mises and the like to understand what they are on about.

    This new ‘common sense’ has a philosophical rationale that is underpinned by a ‘view of man’, right/correct relationships between same (and therefore a view of the ‘good society’), an epistemology of sorts and an axiology (a theory of what is good and valuable). It can’t simply be dismissed.

    It’s the opposite of what Whitlam et al was on about. But it simply won’t go away.

    It’s Time for the citizens to understand what is happening and once more to espouse values such as ‘fairness’, ‘equality’, ‘justice’, ‘opportunity’ and the like.

  14. Kaye Lee

    We need to recognise the intrinsic value of this planet and the individuals that inhabit it. Abbott and Hockey assess value by how much you contribute to the profit making venture. Our humanity is under attack by alien corporations and our government, rather than protecting us from this attack through appropriate regulation, wants to eliminate any resistance and to pave the way for an aggressive takeover.

    If they think we Aussies are going to stand idly by and watch them transfer our common wealth into their backers’ bank accounts then I would suggest they are underestimating how many people they have pissed off in their short reign.

    It’s Time alright – time to say piss off grub.

  15. flrpwll

    12 to 18 months? Of this?

    We’re stuffed.

  16. stephentardrew

    In short Joe is Stuffed: How or when?

    Who cares.

    No way back for Mr eleventy from 7% approval rating?

    Better get those fingers working buddy.

    Big budget hole, home goal, bury the ground hugging lying mole. (with deepest apologies to moles)

    Bitta anger reinforcement would help hey Joe what you doin with that limp lettuce in your hand.

  17. Matters Not

    they are underestimating how many people they have pissed off in their short reign

    Yep! Look at the latest polling track.

    BludgerTrack: 52.0-48.0 to Labor

    But it’s only 52% to 48%. While that would translate to a loss of government for Abbott et al if the sentiment(s) was/were maintained, I can’t understand why the margin is only 4%. It should be much greater at this point in the election cycle. (Actually I can).

    It seems to me that Abbott et al are supremely confident that they can capture a swing of about 2% with a (small) basket of either promises or scares before the next election. (I suspect that ‘scares’ will be the chosen political strategy, given that the odium of broken promises will be too hard to overcome). And given that there’s no alternative paradigm of ‘hope’, ‘aspiration’, ‘vision’ and the like from the ALP (Whitlam demonstrated the importance of same), I’ll be wagering on Abbott’s survival.

    More’s the pity.

  18. Lee

    Yes MN, I think the bigotry, racism and violence is going to get much worse before the next election.

  19. Steve

    There is also another deeper problem that so far the MSM has steered away from, namely the significant impact of the drop in consumer confidence, and its impact on revenues (and more!). As a small business owner, and in discussion with many others, ever since the budget rumours started in April, retail and associated industries (not a small part of the internal market and overall a massive employer) has been under as significant a downturn as was experienced in the GFC. Well, if you talk down the economy, and then threaten to take money out of peoples pockets, what would you expect? But whilst Labor stimulated the economy, that is simply anathema to the current fools in charge. So slowly the economy grinds downwards, less GST hits the coffers, and the revenue income gets smaller. That isn’t going to end well.

    Unfortunately the right will, as Lee correctly suggests, use security as their rallying cry to try and hold on to power, with the expected bigotry, racism and violence that comes with such. Adults in charge? Dear God.

  20. Nato

    Hi. This is an interesting site you have here. I drop in irregularly and have a good read every time I do. This is my first chance to comment, and I would like to raise an alternative option with you.

    As you note in your opening paragraph, when Mr Hockey was all words (prime examples noted in the second) he was seen more favourably than when his budget refused to walk the talk and still depended on rising debt levels, as in the fifth. This alienated the swing voters who expected a more Costello-type result, despite your observations in the eighth.

    The left will always oppose any cuts to services, highlighted by the graphic, and knew that these were coming. Left wing opinions will not have moved

    The right are stuck with the LNP because there’s no viable right-wing rival. The Liberal/Labor split in the polls hasn’t moved anywhere near as much as Hockey’s approval. I like your analysis of the situation, but what if, in conclusion:

    “If the budget is ever to return to surplus, expenses must be cut.” was the line the LNP pushed, it was the line Australians voted for, and now those cuts are cancelled.

    What if the Hockey budget is too left-wing for Australian voters?

  21. Lee

    Nato, as has been discussed here before, the budget does not need to return to surplus. Australia is sovereign to its own currency, so the government can run a deficit forever if they wish. Since we have unemployment, the government should actually be providing work. They can afford to do that quite easily. The problem is, capitalism relies on a high level of unemployment to work and the pollies are worried about upsetting their wealthy, powerful business mates. However, if they were to provide a job guarantee (http://bilbo.economicoutlook.net/blog/?p=25572) for everyone who wants employment or to increase their hours, everyone, including their wealthy, powerful business-owning mates, would benefit and it would guarantee a win for that government at the next election too.

  22. Jennifer Meyer-Smith

    Nato, I refuse to believe Aussies would see this budget as too left-wing. Aussies have traditionally been accused of being apathetic and laid back, but there is a limit to what they will tolerate when it comes to standards of living, especially when it begins to impact on their own personal world experiences.

    Lee, thanks for the article. I confess I have not read it yet, but will comment once I’ve digested the info. In the meantime, I am flabbergasted that the Abbott Government, its puppet masters and powerful business mates would not be encouraging wider, secure and long term employment opportunities for all demographics, including mature age women, who along with disabled people, are at the back of the queues.

    Likewise, Labor would be wise to be offering employment policies, initiatives and programs to show that it wants to find solutions to get people out of poverty on unemployment and under-employment and back into productive enterprises, as economy-sustaining taxpayers.

  23. John Kelly

    I can’t see this budget as pro left-wing either. I think the opposite applies. I agree that there is no need for surpluses but neo-liberal economics demands surpluses to keep wages growth in check. It’s a philosophy dedicated to maintain and increase wealth for the 1% at the top. The LNP is committed to that philosophy. But right now they are stuck between a rock and a hard place. Debt is increasing (now $340 billion up from $284 in Sept 2013), and so is unemployment while retail spending is down. If the private sector does not step in to fill the vacuum, that’s a two pronged recipe for recession.

  24. stephentardrew

    John:

    And here we go. So the only rational solution is increased revenues (the top 1% to 20%) and good old stimulus for employment. People get jobs pay taxes and write down interest on the deficit leading to economic growth and steady management of an inevitable and necessary debt.

    Austerity is for economically challenged idiots like angry Flabbergasted Bloviating Joe and i’m so believable Gullible Gormless Gorman.

    Bit too hard that.

  25. Pingback: How Long can Hockey Survive? | THE VIEW FROM MY GARDEN

  26. Florence nee Fedup

    Abbott claims he was given a mandated to fix the broken budget. This being the case, he therefore has a mandate to do whatever it takes.

    In his eyes, anything else he said to win the election does not count. I suspect it does not work that way. He has found a way in his eyes, of having winner take all.

    Hockey says nothing cannot be done, as it is not in the budget. If not, why not. He made decisions re the money raise and how it is spent. All we get from Abbott is “I regret”

    Maybe we need to look at the decades of cutting taxes, and where that ha led us. It is proven that cutting taxes correlates with rising poverty. Is this what we want.

  27. Florence nee Fedup

    Very simplistic view. We are now suffering he backlash from decades of cutting taxes, both personal and business of the big boys. This is fine with Abbott and Co, who believe there should be as little government spending as possible. That the market should be left to take care of all.

    That it should be user pay all along.

    If one believes that governments are there to represent the people, that has a role to create a fair and civil society, this does not work.

    It is about economy versus society.

    Seems Hockey is finding out, the market does not deliver.

    When does our AAA rating from three agencies disappear.

    I suspect many of us do not talk he same language a this government.

    ill be interesting to se if he does make some headway with G20 Many seem to believe he will. If so, the globe will be in trouble.

    Abbott is following extreme form of Thatcherism.

  28. whatismore

    I hope that you are right.

  29. John Armour

    “Debt is increasing (now $340 billion up from $284 in Sept 2013), and so is unemployment while retail spending is down. If the private sector does not step in to fill the vacuum, that’s a two pronged recipe for recession.”

    Let’s remember that “The Debt” is not really a debt. The issuance of bonds is a monetary operation.

    All public debt is bought with funds that the government has spent into existence at some point. The stock of outstanding public debt is just an accounting record of the cumulative deficits that the government has run to this day. $-for-$.

    The government just borrows back its own spending. The other way of saying that is that public spending provides the $s that the private sector uses to buy the debt as part of its wealth portfolio.

    If you think you know what ‘debt’ is, read on

    If unemployment is rising, it just tells us that the deficit is not big enough.

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