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Ok Joe, let’s talk

Photo from talking points.com.au

Photo from talking points.com.au

In a speech to the NSW business chamber, Mr Hockey promised a “genuine community conversation” about the demographic challenges facing Australia’s ageing population and the threat of lower economic growth without reform.

“There is a huge task that is ahead of us. If we want to remove the shackles, if we want to give people an incentive to work harder, to earn more money, to be more innovative, if we want to do that, we’ve got to start living within our means,” he said.

“Spiralling debt is not a legacy we can leave for the next generation. This is not the compact between generations we want.”

Well Mr Hockey, I’m up for the challenge. Let’s have a “genuine” conversation.

You have stated that defence is immune from cuts. Why?

According to the budget, the Defence Materiel Organisation’s (DMO’s) spend for 2014–15 will be approximately $12.6 billion. $6.3 billion will be spent on new acquisitions and $6.2 billion on sustaining our current equipment in this financial year alone.

However the budget contains a note that these figures are based on a US 90.30¢ exchange rate for US acquisitions. As the exchange rate is about 78c at the moment this means we will have to pay substantially more for our imported weapons of war.

The DMO will manage acquisition and sustainment worth about $50 billion over the Forward Estimates period, with only around 55 per cent to be spent in Australia. That means we are sending over $22 billion to other economies.

Defence’s top 30 approved procurement projects attract an overall total budget expenditure of around $47.2 billion.

The latest Defence Capability Plan (DCP) contains around 160 projects, or phases of projects, worth around $250 billion out-turned (i.e. taking into account projected inflation rates and contingency). That’s a hell of a lot of money for a country that isn’t at war.

In the budget review it says that “The Government’s March 2014 announcement to acquire an unknown number of Triton Unmanned Aircraft System (UAS) from the United States has not been included in this Budget. The UAS has yet to successfully complete development with the US Navy.”

Why are we announcing we will buy something that hasn’t completed successful development?

Which brings me to Tony’s fighter jets.

“This project is approved to acquire 72 JSF aircraft and supporting elements to form three operational squadrons and one training squadron. This comprises 14 aircraft approved in 2009 and 58 approved in April 2014. The funding for the recently approved 58 aircraft and associated elements will be transferred to the DMO post the 2014-15 budget.”

Why were these not included in this year’s budget? And must we really have four squadrons of fighter jets? Liberal MP Denis Jensen has called it a dud decision saying “No one has had the balls to call a halt to it or to even call for a full capability analysis against requirements.” Do you?

One of the key programs mentioned is the “Future Submarine acquisition program which currently has an approved budget of $235 million. Of particular note, the Defence Portfolio Additional Estimates Statements 2013–14 (PAES) stated that the Government had ‘suspended work on Military off the shelf design options’ and would focus on Option 3 (evolved Collins) and Option 4 (new design) submarines. This approach was also confirmed in this Budget.”

What is the $235 million allocated in the budget for when we don’t yet have a contract? Do you really mean it when you say you aren’t buying off the shelf designs? And can someone please tell me why we need twelve submarines and what they will be used for?

Another key program to build three Air Warfare Destroyers (AWD), which has an approved budget of $7.8 billion with almost $5.2 billion already spent, has run over budget and is currently being assessed by an independent review team.

Our ADF do wonderful humanitarian and disaster relief work. They help with evacuations and search and rescue. They help with rebuilding. They help with peace-keeping.

Considering, last October, that they disposed of almost 100 AGM-142 stand-off missiles costing about $400 million by blowing them up because they had never been used and they didn’t fit the new planes, do you really think more bombs, missiles and fighter jets are what we need?

Have you ever done a cost-benefit analysis of the return on money invested in defence? What military threat are we facing? Is it greater than the threat posed by climate change? How many lives are they saving compared to investing in health and research?

I know Generals and Admirals will always tell you they want new toys, but considering the staggering amount of money involved and that we are not at war, could you please tell Tony that he may have the fourteen jets currently on order and he may build 3 new submarines in South Australia to provide employment and stimulate the economy, but because of the state of the budget his allowance has been cut.

27 comments

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  1. eli nes

    how depressing that labor hasn’t demolished the fraud! why why why does little billy take it on the chin? All i have heard on commercial tv is we agree with the PM.

  2. Wally

    Obviously Joe wants us little people to live within our means so he can increase taxes to pay for all the new military toys that will be out of date before we receive them.

  3. Anon E Mouse

    Kaye Lee, did you see the Kevin Rudd interview on NITV the other night?

    Good interview, Kev as usual didn’t put anyone down, and is still a solid Labor man.

    Curious…

  4. keerti

    eli nes, I used to be a died in the wool , rusted on labor voter, but they are as happy as the liberals to spend money on subs and guns. I don’t believe that we can afford either of them any more. As long as we have two major parties that believe that governing is about economies and not the people and environments who make the economy we are in trouble.

  5. ianmac

    Kaye Lee, you are truly awesomely on the ball. Where are the paid journalists,…. Where are the opposition? Thanks for showing us there is intelligent life. 🙂 !

  6. Kaye Lee

    No I didn’t Anon E Mouse. But I have to say that a ‘solid Labor man’ would not have done everything in his power to bring his own government down. I know we have discussed this before but I still see Kev as more ambitious than altruistic, though sadly I think that of the vast majority of our politicians.

  7. Kaye Lee

    One of my biggest concerns is that we are spending billions on defence contracts to buy signatures on free trade agreements.

  8. stephentardrew

    And the war machine rolls on. So much for democracies that abhor violence and brutality.

    It seems to me, at the bidding of the US, we are moving from defense to offense. The US has never been defensive it is extremely offensive in the real sense of the word. Weapons redundancy is the corporate ponzy scheme of the military industrial complex. Now could it just be that the profits go to the 1%? Gee that corporate capitalist trickle up effect is a wonderful thing.

    Needles to say the tail wags the dog.

  9. stephentardrew

    OK Joe here is a bit of a lesson in deficit spending. Mr. eleventy onsey twosy toe counting ignoramous may learn something. Hang on the intellectually challenged live by dogma so logic ain’t going to work. How do you convince a lying fool he is a lying fool? Bit of an oxymoron that.

    Intergenerational theft’ a Coalition favourite that ignores the long-term benefits of spending: Greg Jerico.

    http://www.theguardian.com/business/grogonomics/2015/feb/19/intergenerational-theft-a-coalition-favourite-that-ignores-the-long-term-benefits-of-spending

  10. Florence nee Fedup

    FM Bishop let slip a couple of days ago, there are more, greater cuts coming to foreign aid. This money helps to keep us out of war.

  11. thevenerable1

    @ianmac
    Yep. I totally agree.

  12. Kaye Lee

    And in yet another example of how this government loves to spend money on things but hates spending it on people….

    A 3.16 per cent pay rise offer for the next three years to Australia’s 20,000-strong Defence Department staff has left even secretary Dennis Richardson with regrets.

    The below-inflation offer comes with a long list of working conditions removed and the lowering of starting salaries for most pay classifications.

    The offer averages out at 1.05 per cent annually over three years. But the increase to wages would be paid in in the first two years – 1.98 per cent followed by 1.18 per cent and no rise in year three.

    The offer is one third worse in pay offer terms than the controversial increase given to their uniformed colleagues in the Australian Defence Force in November. When cuts to conditions are included the civilians are much worse off and the overall offer could lead to more industrial action across the public service.

    http://www.smh.com.au/national/public-service/i-regret-defence-boss-tough-email-to-20000-staff-over-pay-offer-20150219-13j73i.html

  13. Fred Martin

    Kaye Lee, I would be interested in what you think of this

  14. Kaye Lee

    Fred,

    I am a convert to MMT. I am by no means an expert and am still refining my understanding but it makes sense to me. As a maths teacher I want equations to balance but the equation involves much more than government revenue vs government spending. As Hail points out, when governments reduce spending private sector debt increases. A currency issuing government can never go broke but the private sector can. A government does not have to make a profit – the private sector does – so unprofitable services are cut and the profitable ones will often cost us more when provided by the private sector. The economic and social benefits of full employment seem obvious to me. Unemployment means we are underutilising a valuable resource. Taxes are just a tool to control the amount of money in the system to avoid the inflation that might ensue if demand outstripped supply.

  15. Ricardo29

    As usual you have nailed it again Laye Lee but I want to add my congratulations to the government for its impressive move to increase productivity — by cutting wages through lower than inflation rises. Increases consumption too. Ha ha

  16. Harquebus

    Joe Hockey is just another growth deadhead. We have reached the limits and the era of economic growth is over.
    Any politician who pursues growth will fail. How many more examples do we need?
    Joe Hockey will fail because his whole premise is based on the absurdity that compound growth can be infinite.

    “Australian researchers have shown that a book written ‒ and written off ‒ four decades ago accurately predicted where the world would be in terms of resource allocation and the environment. And that does not bode well for the future of humanity.”
    http://rt.com/news/185168-limits-to-growth-updated-models/

    http://www.abc.net.au/radionational/programs/ockhamsrazor/limits-to-growth/6088808
    http://www.clubofrome.org/?p=326

    Continuing the pursuit of growth comes at the expense of our environment which, is essential for our survival.
    “The economy is a wholly owned subsidiary of the environment, not the reverse.” — Herman E. Daly.

    “Using his burgeoning intelligence, this most successful of all mammals has exploited the environment to produce food for an ever increasing population. Instead of controlling the environment for the benefit of the population, perhaps it’s time we controlled the population to allow the survival of the environment.” — David Attenborough

    “It’s coming home to roost over the next 50 years or so. It’s not just climate change; it’s sheer space, places to grow food for this enormous horde. Either we limit our population growth or the natural world will do it for us, and the natural world is doing it for us right now.” — David Attenborough

  17. Lee

    Hokey is quoted in the media today as saying that workers need to have many careers and many retirements. What is that supposed to mean? Most people don’t have the time nor money to retrain every few years. If this government gets their way most people will be struggling to pay for one degree per lifetime. There’s also often a pay cut associated with a career change as one starts over as a junior in a new field.

  18. Kaye Lee

    It means we will have a labour force made up of casual, part-time, and contract workers. Cut their entitlements and dump them when demand is slower or profits are down. This move by the government to sack public servants and then contract out their work is hugely counterproductive and open to abuse as we are seeing by all the contracts given to Liberal Party donors. It also ends up being much more expensive and very open to politicisation – employ the rich old conservative white men to produce a report saying exactly what you want to hear.

  19. gangey1959

    Why doesn’t Tones ask the Pope for a handout? Or the School Chaplains? It’s all in the name of peace anyway.

  20. gangey1959

    @Lee. One of my several employment agency ‘advisers’ told me mid way through 2013 that at 54, with my qualifications and experience, I was in the position of being un-suitable for most of the jobs I was applying for because I would either quit because I would find them too boring, or that I was so much more suited to the various positions than my immediate superiors that I would be a threat to them. Either way, I lose.
    If I take the relevant experience off my resume I get the question “So what is it you are any good at?”
    On that basis, how do I get into politics? ROFADLMAO.

  21. Wally

    @Kaye Lee your comment about part time casual employees is spot on, the effect this is having on our economy and lifestyle is horrific but it passes unnoticed by many. How can you go to the bank for a house loan if you only have a casual job? How can you go into debt if you don’t know how much you will earn next week.

    What is worse is companies like Woolworths asking employees to sign contracts for a few shifts that are not ongoing to meet the stores salary budget. I understand people being on a contract if they are given regular part time work on an ongoing basis but when you need someone to fill in for a few shifts they deserve to be paid the 20% loading. How do you claim sick leave if you are on a contract for a couple of 4 hour shifts? The other lurk is to bring people in for a 3 hour shift so they are not entitled to a paid break. Nowadays you have to work 4 hours before you are entitled to a break and in many industries that is an unpaid break. This is wrong and these archaic conditions are carry overs from the LNP’s WorkNoChoices.

    While we are at it the hospitality businesses that continually push to remove penalty rates do themselves more harm than good and they are too bloody self centred, greedy and dumb to realise. Most families rely on income that is not already committed like extra pay from working overtime to purchase luxuries like take away food, dining out and going away for a weekend. Without penalty rates people wouldn’t work the extra hours so there would be considerable negative impact. If people are prepared to work while everybody else is at home relaxing or out enjoying themselves they deserve to be paid more.

  22. Mike

    How on earth is Ukraine holding out to the might of Russia, they sure as hell aren’t using billion dollar subs or jets and surprisingly Ukraine seem to be going about quite provocatively too.

  23. Loz

    Joe is lazy treasurer who is still spouting the same old story regardless of numerous economic experts who tell a different story. He is a disgrace as a Treasurer and hopefully will be gone soon with his buffoon of a PM. As for Kevin Rudd, he was once the shining light of the Labour Party, but his shenanigans to bring down Labour I consider to be vindictiveness. Good article Kaye.

  24. townsvilleblog

    Why is it that the LNP only talk to business and not the unions? Do they consider working people so unworthy of a say in events that they need not be consulted?

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