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Tag Archives: debt and deficit

Absolute crap

One thing that has become increasingly apparent about Tony Abbott is that he gears his words to his audience.  If that meant explaining policies at a level that the audience could comprehend, that could be a good thing, but in the case of our Prime Minister, it means saying what you think they want to hear even if it is inconsistent with, or even diametrically opposed to what you have told a different audience.

When Tony visited a meeting of 130 farmers and townspeople in Beaufort in September 2009, he called for a show of hands on whether the Coalition should support the ETS. Only a handful voted yes.

Abbott, until that point Turnbull’s main defender on the ETS, quickly donned his sceptic’s hat and played to the room discussing how there had been many changes of climate over the millennia not caused by man, leading to that infamous quote

“The argument is absolute crap. However, the politics of this are tough for us. Eighty per cent of people believe climate change is a real and present danger.”

His comments were warmly received in this rural heartland and that was when Tony realised that he may have a shot at the leadership if he became a climate change denier.

After he staged his leadership takeover, Abbott tried to cover-up his backflip describing his use of “crap” as “a bit of hyperbole” and not his “considered position” and said it was made “in the context of a very heated discussion where I was attempting to argue people around to what I thought was then our position”.

Absolute crap say the people who were at the meeting.

Event organiser Jim Cox said Abbott’s comment was “very well received” and he quickly realised “he was on a bit of a winner”.  Vice-president of the Beaufort branch of the Liberal Party Joe McCracken said Abbott looked relieved by the applause.

Buoyed by his success, Tony used the same approach when he attended a luncheon event on International Women’s Day in 2010.

What would women want to hear?  I know…we are going to give you universal paid parental leave on replacement wages plus superannuation for six months and we are going to scrap Labor’s $150,000- a-year income limit on the $5185 Baby Bonus.

Instead of being grateful, women, who are in the main smarter than Tony Abbott, realised this fell into the ‘too good to be true’ category.  As subsequent actions have shown, Tony’s feigned concern for women and families was absolute crap as was his promise not to introduce any new taxes. (Who could forget that humiliating interview with Kerry O’Brien?)

Not only have we lost the Baby Bonus, and lost the right to claim paid parental leave from both our employer and the government, eligibility for Family Benefit payments has been tightened up and increases frozen.  The appropriateness of these measures is debatable but Abbott’s backflip is not.

Going into the last election Tony Abbott promised a ‘unity ticket’ on education.  The Liberal Party education policy also clearly stated “We will ensure the continuation of the current arrangements of university funding.”

Absolute crap.

When Tony Abbott addressed the IPA at their 70th anniversary dinner, he spoke of freedom.

Freedom can only exist within a framework of law so that every person’s freedom is consistent with the same freedom for everyone else.  At least in the English speaking tradition, liberalism and conservatism, love of freedom and respect for due process, have been easy allies.

“Do unto others as you would have them do unto you” is the foundation of our justice. “Love your neighbour as you love yourself” is the foundation of our mercy.

..a democratic parliament, an incorruptible judiciary and a free press, rather than mere law itself, are the best guarantors of human rights.

You campaigned against the legislative prohibition against giving offence and I’m pleased to say that the author of those draft laws is now leaving the parliament. Well done IPA! And, of course, you campaigned against the public interest media advocate, an attack dog masquerading as a watchdog, designed to intimidate this government’s media critics and that legislation was humiliatingly withdrawn.”

Abbott sucked up to the IPA telling them what they wanted to hear but where is the due process for citizens returning from the Middle East?  Where is the justice and mercy for asylum seekers?  Where is the concern for human rights?  Where is the freedom to criticise this government?  And who is Abbott to speak of humiliating withdrawals?

That speech had more crap in it than Chinese berries.

Tony speaks of his commitment to tackling the scourge of domestic violence and to closing the gap for Indigenous Australians while slashing funding for frontline services.  We have seemingly endless funds for defence, national security and border protection.  We can even find $40 million to give Cambodia to take four refugees.  But we cannot fund refuges, legal services and advocacy groups.

The lip service paid to the protection of our vulnerable has been proven absolute crap by the actions of Abbott’s mob.

And when it comes to the economy, everything the Abbott government says is crap.  Despite significantly increasing the debt and deficit and having to downgrade projections with every fiscal statement, they try to convince us that they have cut billions from the debt they inherited.  It makes no sense whatsoever to compare trajectories in ten years’ time and claim credit for things that haven’t happened and aren’t likely to.

After campaigning widely on the supposed “debt and deficit disaster” and trash talking our economy, Joe Hockey warns us now of the irresponsibility of such talk because of its negative affect on confidence.  Whilst reining in government spending, he encourages us all to get out there and spend up big to stimulate the economy.  Joe, you are full of it.

On many occasions before the election, the Coalition promised to build our new submarines in South Australia.  It even appears in their defence policy released on September 2, 2013.

“We will also ensure that work on the replacement of the current submarine fleet will centre around the South Australian shipyards.”

When Tony’s leadership was threatened in February, he promised his South Australian colleagues that would be the case – at least that’s what they thought he promised.  Even they must now realise that was absolute crap.

Before the election we were promised “no cuts to education, no cuts to health, no change to pensions, no change to the GST and no cuts to the ABC or SBS” and no adverse changes to superannuation.

Absolute crap.

In his victory speech on September 7 2013 Tony Abbott made the following promise:

“In a week or so the governor-general will swear in a new government. A government that says what it means, and means what it says. A government of no surprises and no excuses. A government that understands the limits of power as well as its potential. And a government that accepts that it will be judged more by its deeds than by its mere words.”

My judgement?

Tony Abbott will say whatever he thinks people want to hear because, far from being a leader, he is a dishonest inadequate man whose only motivation is to keep his job.  This makes him susceptible to manipulation.  We are in the position where focus groups, vested interests, lobbyists and party donors are dictating policy because our PM is a weak man with no vision whose words mean nothing.

Absolute crap, indeed.

Premature congratulation

The Abbott government suffers from a bad case of premature congratulation.

We have had a parade of Hockey, Cormann, Frydenberg, Abbott and others telling us that they have halved Labor’s debt – which is a rather bizarre claim considering the gross debt has increased by $83 billion (and counting) since they took office.

Joe Hockey tells us that “job creation across the economy is running at around 15,000 new jobs a month. This is three times larger than the average of around 5,000 jobs a month last year.”

Aside from the fact that there is no measure of “new jobs” (job ads do not differentiate between new and existing jobs), comparative figures show that, in the 19 months from August 2013 to March 2015, there was a rise of 52,300 in the number of people employed and a rise of 56,200 in the number of people unemployed.  The aggregate monthly hours worked fell from 1,647.3 million hours to 1,628.7 million hours.  In other words, employment has not kept up with population growth and those who are working are working less hours.

Parliamentary Secretary to the Prime Minister Christian Porter informs us that cuts to red tape have delivered $2.5 billion in savings in compliance costs since coming to Government.  To arrive at this figure they have done some very creative accounting.

People buying prepaid mobile phones will only have to go through the identity check once, not twice, saying that will save $6.2 million.

He said rejigging the e-tax website so the data entered the previous year shows up would save time and cut costs by $156 million and he said there was a $17 million saving in scrapping regulations that banned people using mobile devices on take-off and landing in planes.

The costs were partly calculated by working out how much time people or businesses would have spent complying with the rules and then what their time was worth.  Who would have thought that turning off your phone for a minute would have cost so much?

Andrew Robb has been showered with praise for completing several free trade agreements.  The secrecy surrounding these negotiations makes it very hard to understand the full implications but the FTA with Japan alone led to a $1.6 billion write down in revenue.  One must wonder why these countries, after years of negotiation, were all willing to sign off so quickly all of a sudden.  I fear our Pharmaceutical Benefits Scheme will be under attack very soon, along with our plain packaging laws, and that manufacturing will have no future in this country.

We have also been barraged by a litany of self-congratulation for “stopping the boats”.  Whilst the number of boats is less, they certainly haven’t stopped, even under the threat of incarceration and torture at the other end.  But more to the point, what has this policy achieved in helping the growing tide of displaced people around the world?  We pretend to care about deaths at sea but apparently don’t give a toss about what is happening to those we turn away.

The gold award for premature congratulation, however, must surely go to Greg Hunt who, in one day, would have us believe that he cut our emissions by 4 times what occurred under carbon pricing and for 1% of the cost.  This unbelievable statement is so wrong on so many counts it is hard to know where to begin.

A study by the ANU showed that emissions reductions directly attributable to the carbon price in the electricity sector alone had achieved an abatement of between 11 and 17 million tonnes over its two year life while raising around $6 billion in revenue.  Abatement would have been even higher had the industry believed the carbon price to be permanent.

Whilst it’s true that demand has been falling for some time, 2013’s 0.8 per cent economy-wide fall in emissions was the largest annual reduction in the 24 years of monitoring. In the power sector, the industry most directly covered by the carbon price, emissions fell 5 per cent.

Hunt’s ridiculous statement that the carbon price was $1,300 per tonne has been lambasted by experts for the lie that it so obviously is.  The real price was in the 20-odd dollar range, and if the carbon tax had been allowed to develop into an emissions trading scheme, which it would’ve by now, the price would be linked to the European system which is trading at around the $10 mark.

Hunt’s other glaring omission is that while the Coalition’s policy is a cost, the carbon tax raised revenue.

What the government has actually done is spend $660 million of taxpayers’ funds buying a possible 47 million tonnes of carbon abatement – 25% of their total budget for 15% of the required abatement.

As reported in New Matilda, there’s also no guarantee the contracts companies won in Thursday’s ‘reverse auction’ will be discharged before the 2020 deadline. Many of them extend for seven or 10 years, and the government has not provided information about when the abatements need to be achieved.

“The experience with grant-based mechanisms is some of the projects proposed or actually contracted don’t happen in actual fact,” Professor Jotzo said. Even if they do, the types of projects contracted so far are largely land-fill and agriculture abatements, many of which may have been occurring already under ‘carbon farming’ initiatives, or would have occurred anyway.   Hunt is very much counting his chickens before they have hatched.

A very excited Andrew Robb also informed the Mines and Money Conference in March that “Federal Environment Minister Greg Hunt has quickly approved 145 projects worth over $1 trillion in economic value; the majority of which are in the resources and energy sector.  Federal project approval times have been slashed to below 200 days from an average of 470 days in 2012.  We have created a ‘one-stop shop’ for environmental approvals that eliminates duplication between states, territories and the Commonwealth, saving business $426 million per year.”

The trouble with fast tracking approval is that companies lie and it takes expensive court cases to prove it.

A Queensland court has heard expert evidence from Adani’s own witness that the Indian company which wants to build Australia’s largest ever coal mine has drastically overstated the project’s benefits to the Queensland public.  And in other explosive evidence, a senior company official said he “could not comment” on speculation the company had been structured to siphon profits off to Singapore, Mauritius and the Cayman Islands, to avoid Australian company taxes.

Adani’s claims about the number of jobs the project will create have already been referred to the Australian Consumer and Competition Commission by the Australia Institute, which argues they have been inflated by 300 per cent.

Adani has also claimed that the mine would generate “$22 billion in mining taxes and royalties in just the first half of the project life”.   Even their own expert belies this claim, estimating that royalties will actually amount to just $7.8 billion and corporate taxes will add around $9.96 billion over the 30-year period under consideration.  This too is being challenged as they apparently used a company tax rate of 32% rather than 30% and have been actively structuring their company to “optimise” their tax obligation.

Earlier this month, as part of the Land Court proceedings, the mining giant argued that the world is on track to a 3.1 degree temperature rise and if they don’t dig up the proposed 60 million tonnes of coal annually, another, potentially foreign, company will. Such a rise in temperatures, Adani’s expert witness conceded, would ultimately destroy the Great Barrier Reef.

When Indian Prime Minister Narendra Modi, considered to be a close friend of Gautam Adani, attended the G20 conference in Brisbane last year, he announced a $1 billion loan for the Adani project from the State Bank of India.  Apparently, this offer is being withdrawn, adding to the growing list of banks and financial organisations refusing to offer finance for the proposed mines.

So despite all the back-slapping and self-congratulation indulged in by the Coalition, it is hard to find any tangible benefit from having the adults back in charge.  The reality is that the debt and deficit are worse, unemployment is worse, our sovereignty to make health and environment laws is at risk, our emissions are increasing, investment in renewable energy has ceased, we are endangering the Great Barrier Reef, and we have done nothing to help asylum seekers.

But rest assured, by keeping your phone on during take-off and landing, you are saving the country millions.

Debt and Deficit Duplicity

Once you’ve seen through the ‘debt and deficit’ mantra, (which incidentally is all Labor’s fault, according to leaked government speakers’ notes) you can’t go back to believing in the sort of economic analysis that underpins it. But the mantra is everywhere. Whoever is leader of the Liberal Party, you can be sure a promise to ‘repair’ Labor’s debt and deficit will feature in their rhetoric.

In the last election campaign, Tony Abbott said that:

‘The first priority of an incoming Coalition government will be to end Labor’s waste and get debt and deficits under control as quickly as possible.’

It’s been the mainstay of Liberal rhetoric ever since. Here is Treasurer Hockey on the subject: ‘we will be ruling a line under the fiscal damage that Labor has done, sadly the economic damage will continue for some time but we’ll be ruling a line under the fiscal damage that Labor has done and we’ll be starting the repair job’.

More than a year later, Labor’s debt and deficit was still one of Abbott’s main justifications for everything his government has done. Here he is on the ABC’s 7.30 in December 2014:

we are determined to push on because it is absolutely necessary for our country’s future, for our children and our grandchildren’s future that we don’t saddle them with mountains and mountains of debt. I mean, how would we like it if our parents saddled us not with assets, but with debts? How would we feel if suddenly we were working part-time and we had this massive mortgage to pay and that’s the situation that our country was left in by the former government?

And I can’t resist these comments from recent his National Press Club address:

‘Under Labor, government was spending too much; borrowing too much; and paying out too much dead money in interest alone … Our problem is not that taxes are too low; our problem is that government spending is too high …We are writing cheques that our children and grandchildren will have to meet through higher taxes, higher interest rates and poorer services …Governments should never spend more than they must because every dollar government spends is a dollar you don’t spend, now or in the future’.

‘Cleaning up Labor’s mess’ is one of his main arguments about why he should keep his job.

Even those moving against Abbott use this language. The West Australian MP Luke Simpkins is moving for a spill, because he ‘wanted to make sure that the economic vandals do not get back into power and our children and grandchildren are not left to pay Labor’s bill’.

And if you think Malcolm Turnbull would be any different, he’s perfectly happy to talk about’ budget repair’ and how ‘governments, like households, have to live within their means’. And what’s his view of the 2014 budget?

‘I support unreservedly and wholeheartedly every element in the Budget. Every single one.’

This is what you’d expect from the Liberals, but Labor’s not immune from an obsession with debt and deficit either. Aside from muttering about ‘structural deficits’, Bill Shorten and Labor have mostly kept quiet on the subject so far, but the governments of both Rudd and Gillard felt they had to promise if not a surplus, then at least a plan to get back to one. As Ross Gittins notes:

‘So bogged down and obsessed by the budget has our elite become that, in all our fiddling with government spending and taxation, an attitude is developing … that it doesn’t much matter what measures we take so long as they reduce the deficit.’

The Liberals will never give up on it. Having the budget in surplus is a necessary component of their neo-liberal economic world view, and their concomitant election strategies: tax cuts to the rich, spending cuts for the poor, and bashing Labor as big spenders burdening future generations with debt.

It’s tempting to crow about the Abbott’s government’s failure to achieve a surplus – either this year, or for several years into the future. It is, after all, a broken promise that ‘we will achieve a surplus in our first year in office and we will achieve a surplus for every year of our first term’. But to do so buys into the idea not just that a surplus is desirable, but that the surplus/deficit argument is even central to good economic management.

It’s also easy to mock Hockey’s double talk about a ‘budget emergency’. This was the excuse for an unfair budget pursuing the ideological goals that the Abbott government didn’t tell voters about before the election. The LNP government is due to double Labor’s debt by the end of 2015. I’m not saying we shouldn’t criticise their obvious double dealing, partisanship, and the ‘reforms’ themselves. But let’s not forget that the government’s overall – if unstated – economic strategy will inevitably result in weaker growth and higher unemployment. Why did the Reserve Bank have to lower the cash rate? Again, concentrating on the fact of deficit or surplus is obscuring what really matters.

And what does really matter? The notion that a surplus budget in Australia at this time is an economic necessity is plain stupid. We do not have an unmanageable debt. We are not burdening future generations. There is no budget crisis. We have economic challenges – but they are in making the economy work for society, not the other way round. What really matters are those policies that will generate a productive and sustainable economy. Policies which will promote full employment and greater equality, which of itself will promote growth. These are the yardsticks by which good economic management must be judged – not the simple fact of surplus or deficit. This is the alternative narrative that Labor has to learn. It’s not hard; it ought to be in their DNA.

Budget surpluses or deficits are not economic decisions forced upon us by economic ‘facts’. They are political decisions. Decisions around the level of taxation (revenue collection), service provision (government spending), inflation and unemployment are also political decisions – not economic ones. It’s just a different kind of politics.

My point is that we have to change the narrative around debt and deficit to one about full employment and equality. The task is urgent.

If you want my take on the economics behind this, read my recent post on Modern Monetary Theory. It contains links to economists who argue the case far better than I can.

Message of the day

As Lenore Taylor reported on Friday, every morning the major parties send out the “messages” of the day. These aren’t really super-secret documents since ministers and MPs dutifully recite them into any available open microphone.

At the media briefing after the Coalition’s party meeting the assembled journalists were told, “The prime minister said 2014 had been a very good year for the government and he’s confident next year would be at least as good if not better.”

And last night on Lateline we saw Steve Ciobo dutifully relaying the “message”.

The Abbott government’s plan is THE ONLY PLAN to improve economic growth and repair the budget – regardless of what question is asked, this is to be the reply.  They are to repeat over and over again, what a good year it has been.

Look how Scott has stopped the boats.  (But don’t look at the offshore gulags where children are locked up in appalling conditions.)

Look at how many Free Trade Agreements Andrew has signed.  (But don’t ask for the detail about what we sacrificed for those signatures.)

Look at Julie – isn’t she pretty? (But don’t ask us for foreign aid or any contribution to global action on anything that doesn’t involve bombing people.)

Look at Matthias – there’s a man who knows how to repeat the lines (But any deficit blowout is most definitely not his fault – it’s Layboor’s debt and deficit disaster and when you get sick of that it’s Joe’s fault for not selling the message).

Ciobo slipped right into the script we knew was coming.  He said that the Coalition has already cut Labor’s debt by over $300 billion.

That would be a spectacular feat if true since gross debt when they left office was about $280 billion.

PEFO showed that gross debt was expected to climb to $370bn by the end of 2016/17.  In Hockey’s MYEFO that figure had grown to $430 billion and then to $450 billion in the budget, and by all accounts it is still growing as we shall see in Hockey’s next MYEFO in a couple of weeks.

So where is Ciobo getting his figures from?  This little piece of number gymnastics from Hockey’s budget.

“The published 2013‑14 MYEFO face value of CGS on issue figure of $667 billion in 2023‑24 did not include a cap on tax receipts. The projection for MYEFO in Chart 1 includes a 23.9 per cent of GDP cap on tax receipts, increasing the face value of CGS on issue projected to $748 billion in 2023‑24.

In comparison, at 2014‑15 Budget CGS on issue is projected to be $389 billion in 2023‑24, an improvement of $359 billion. By 2024‑25, the projected end‑of‑year face value of CGS on issue is expected to reach $362 billion.”

When Emma Alberice pointed out that using MYEFO as a basis of comparison was ignoring the Charter of Budget Honesty, and that it contained Hockey’s spending and revenue cutting measures like gifting the RBA almost $9 billion and foregoing the revenue from the carbon and mining taxes and wasting billions on Direct Action, Ciobo just spoke over the top of her saying Labor had left the RBA in a vulnerable position.  Tony Burke then tried to point out that the Coalition had taken $1.24 billion in dividends from the RBA this year, something they roundly criticised Wayne Swan for doing, he also was interrupted and spoken over.

The first instalment, over $600 million, has already been paid back to the government in August.

As reported in Crikey:

“When Wayne Swan took a dividend of just $500 million from the RBA in 2012-13, he was accused of “raiding” the bank, by Hockey among others. It was subsequently revealed that Treasury, after consultations with the RBA, didn’t believe there was any imperative to increase the Reserve Bank’s capital buffers. But if $500 million is a raid, over $1.2 billion looks more like open plunder. How dearly Swan would have liked being able to get another $700 million that year. So as some of us predicted back in 2013 Hockey, having blown out the 2013-14 deficit with his $9 billion gift to the RBA and blamed it on Labor, has got his first repayment to bolster the 2014-15 budget bottom line.

Curiously there is no mention of the dividend in RBA governor Glenn Stevens’ foreword to the report, despite discussing how the $8.8 billion had replenished the bank’s capital reserves; you have to go down to page 77 to get an explanation of the dividend. It’s particularly curious given that the dividend — whether one is to be paid or not, and how large it will be — is regularly mentioned in the forewords of previous annual reports. The omission doesn’t help the impression that the whole business of the $8.8 billion has undermined the perception of RBA independence.”

This politicising of independent bodies like the RBA, Infrastructure Australia, NBNco, the CSIRO, the AFP and the ABC, is a very worrying trend designed to keep even more information from the public.

So my “message for the day” is stop the crap Joe and co.  If MSM journalists are incapable of exposing the bullshit then step aside – you have made yourselves redundant.

I have a mandate

In 1963, when Martin Luther King articulated his dream for the future of his children, he touched the hearts and minds of people around the world.  He spoke of a world of equal opportunity for all, a world where children would be nurtured, a world where people would be safe and free from hatred and intolerance.

He spoke of the shameful situation where, 100 years after emancipation, “the Negro lives on a lonely island of poverty in the midst of a vast ocean of material prosperity.”

As I listened to this speech again, I could not help but compare it to the vision, or lack thereof, from our current government.  “I have a mandate” does not quite have the same ring to it.  Aiming to leave our children debt free seems such a paltry goal, one that is naively unattainable and questionably desirable.

Where is the plan for the country we want to be?  Where is the path to the world Martin Luther King dreamed of?

Tony’s dream seems to change daily.  Early in the piece, stopping the boats was his main aim.  Endless hours in Parliament were devoted to a count of boat arrivals and deaths at sea.  Countless headlines told us how a few thousand asylum seekers were destroying our way of life.

Since taking office, Operation Sovereign Borders has been the one policy that has an open-ended budget – whatever it takes.  Everything is sacrificed to stop the boats – tens of billions of dollars, our relationship with our neighbours, our international reputation and the reputation of our Navy.  We are even prepared to sacrifice the lives of those people who have come to us seeking safe haven, and risk the mental and physical health of asylum seekers and their children by incarcerating them indefinitely, even though they are the victims and have committed no crime other than to ask for our help.

In an attempt to appeal to female voters, Tony took an awkward foray into the world of feminism by promising a generous paid parental leave scheme to encourage “women of calibre” to have babies.  His caring new persona was backed up by interviews with his female relatives and uncomfortably private revelations from his female Chief of Staff.  This very costly and widely unpopular scheme remains in the budget after a slight trim which barely affects its cost.

Closer to election time, it once again became a referendum on the carbon tax.  This great big new tax on everything was wrecking our economy and driving up the cost of living for ordinary Australians.  Tony promised to save us $550 a year from our power bills because pensioners were having to choose between eating and being warm.

When the carbon tax was shown to be working in reducing demand, and the economy kept growing with low inflation, the focus shifted more to integrity and trust.

“So my pledge to you is that I won’t say one thing before an election and do the opposite afterwards because fibbing your way into office is what’s brought our public life into disrepute.” – January 31, 2013

“We will be a no-surprises, no-excuses government, because you are sick of nasty surprises and lame excuses from people that you have trusted with your future.”  – August 25, 2013

Despite alarmist rhetoric warning of a budget emergency, an economic crisis, and a debt and deficit disaster, Tony promised repeatedly in that simplistic manner he has of counting off on his fingers, no cuts to health, no cuts to education, no changes to pensions, no changes to the GST and no cuts to the ABC and SBS.

During one of a million election doorstops a reporter asked him: ”The condition of the budget will not be an excuse for breaking promises?”

”Exactly right” replied Tony. ”We will keep our commitments that we make …” he went on to say for the umpteenth time in the campaign.

I have a mandate! (image by ausopinion.com)

I have a mandate! (image by ausopinion.com)

Buoyed by an overwhelming victory in the election and being handed the keys to the safe, each Minister seemed to go off on their own path to glory.

Warren Truss was the warm-up act, re-announcing funding for roads that had previously been funded.  Apparently, if you close off funding from one source and then fund it from a different source then you can claim it as your own initiative, a strategy they are also using in education.

We then have spokesmodel Jamie Briggs with the big introduction…”It really gives me pleasure to introduce to you, the indescribable, the incompatible, the unadorable…..Prime Minister for Infrastructure.”

Tony has gone on a flurry of spending on roads that have not had the appropriate studies done.  They are not high on the list of priorities carefully constructed by Infrastructure Australia.  Rather than making voters happy, many of these roads are striking opposition from residents and businesses who are demanding more information.  One of the main criticisms is that these bits of roads do not link up to integrated public transport networks.  They may provide routes for freight trucks but they are not helping commuters get to work.  Endless kilometres of bitumen carrying thousands of cars to nowhere.

Roads seem to be the only plan to address the growing unemployment situation.  How many people can it employ?  What do these people do when the road is finished?  What assets are we selling to build these roads?  What employment plans are there for people not suited to building roads?

Joe Hockey devoted his time to strategies to make himself look good.  He immediately borrowed $8.8 billion to give to the RBA.  He then pulled off the most amazing sleight of hand by convincing people that the figures in MYEFO were Labor’s debt and deficit.  Ignore the fact that this document was actually the debt and deficit using Coalition policies, lie about the debt by quoting a possible debt in ten years’ time and attribute it to Labor,  inflate the deficit with your own spending and assumptions, and then produce a Budget that reduces your own inflated deficit by taking money from the most vulnerable in our society.

Joe is also future-proofing himself by getting sick people to contribute $20 billion to reduce the deficit.  Do not be fooled into thinking this money is going to medical research.  It is not.  The interest earned by the money is to go to research but the principal will sit there untouched to make Joe’s bottom line healthier, courtesy once again, of our most vulnerable.

Scott Morrison enjoyed the limelight as he went on his relentless campaign of showing just how big a bastard this country could be, spending money hand over fist.

Christopher Pyne immediately began remoulding education to his priorities which seem to focus on our Judeo-Christian heritage and the ANZAC legacy.  He also wants more mention of Conservative politicians and the role of big corporations in shaping our identity.  Rote learning and teacher-based instruction will replace research, discovery, initiative and creativity.

When you hear Christopher say he has put an extra $1.2 billion into education to sign up the remaining States to the Gonski reforms, he got that $1.2 billion by ripping almost $1 billion out of the trades training centres programme and the rest of it by abolishing the before and after school care program.  And now we find that they have ripped a further $80 billion out of funding to the States for health and education.

Andrew Robb has been signing Free Trade Agreements quicker than they can be printed.  The reason other countries are willing to sign so quickly after years of negotiation is because this government is prepared to give up so much for so little in return purely so they can say we got the job done.

Our Health Minister is busily dismantling Medicare and our Environment Minister is getting rid of all environmental protections in his haste to approve more coal mines and more logging.  Our Social Services Minister is removing gambling reforms, cutting welfare and pensions, and encouraging people to stay married regardless of how bad it is.

Our communications Minister is unravelling arguably the greatest potential boost to productivity this country would have seen, and breaking his promise to protect our National Broadcaster.

The rhetoric has now changed.  The main promise was apparently to fix the budget.  All other election promises can be sacrificed to achieve this one.  I do believe that governments have to be flexible enough to adapt to changing circumstances but I do not believe that the situation has changed so drastically as to warrant the attack we have seen in this budget.

As Hugh Mackay says

“this is a profoundly disappointing budget. It’s not the economics; it’s not the politics; it’s the clear sign that this government has young people, the sick, the poor, the unemployed, the elderly and the marginalised in its sights.”

A joint press release by the cigar-smoking duo of destruction says

“Gross government debt is now forecast to be $389 billion in 2023-24, compared with the $667 billion left behind by the former Government.”

In his MYEFO document produced in December, which included Coalition spending, Joe Hockey said:

“Net debt is expected to be $191.5 billion (12.1 per cent of GDP) in 2013‑14 and is expected to reach $280.5 billion (15.7 per cent of GDP) in 2016‑17.”

I always impressed on my children the importance of telling the truth, especially if something bad had happened.  “If I know the truth then I can work out how to best help you.”  I would say to this government, you have a mandate to tell the truth.  If you are honest with us and prepared to listen to advice, let’s work together to first of all determine what sort of future we want and then how to best achieve it.  You need to start from scratch.

Let’s get real here

Image source: brw.com.au

Image source: brw.com.au

“TONY Abbott and Joe Hockey are convinced the government will be punished electorally if it does not produce a tough budget, and they believe there is a “public appetite” for decisive action to get the economy back on track.”

Sounds good? Well let’s get real here. Nothing pisses me off more than getting lied to and you, Mr Hockey, are really pissing me off. Listening to you rail at Labor this week, exhorting them to tell the truth as you told lie after lie, nearly made me choke. There is a “public appetite” for the truth so time for a reality check.

Firstly, to label MYEFO as Labor’s last budget fools no-one. It was produced over three months into your term. You were elected because you said you could fix the problems. The blame game is over sunshine, it’s on your shoulders now and you have wasted one sixth of your term in office crying.

The PEFO report is an independent report by the Secretaries to the Treasury and the Department of Finance that provides updated information on the economic and fiscal outlook. These are the same people who advised you for your MYEFO report so to accuse Labor of lying about the figures is rot.

PEFO showed the cumulative projected budget deficit for the years 2013 to 2017 as $38 billion. MYEFO, prepared under your watch, shows a deficit of $106.6 billion. To quote your own document

“The $68.1 billion deterioration in the budget position since the 2013 PEFO reflects two key factors:

  • the softer economic outlook; and
  • essential steps to address unresolved issues inherited from the former government”. (otherwise known as YOUR spending decisions).

You go on to say:

“Firstly, a softening in the economic outlook has resulted in significantly lower nominal GDP, which has largely driven the reduction in tax receipts by more than $37 billion over the forward estimates.”

In the face of falling taxation revenue how does the Coalition react? They forego $2.9 billion revenue in tax and superannuation measures announced by the previous government.

Getting rid of the moves to tighten the requirements around tax benefits associated with salary packaging a car under Fringe Benefits Tax rules cost us $1.8 billion. All that was required was for FBT claims of business use to be legitimate, verified by a log book filled in for 3 months once every five years – hardly an onerous task.

Joe and Tony said it would cost jobs in the car manufacturing industry. Well subsequent actions by the Coalition show that concern to be a sham as they went about dismantling the industry from their first day, so I can only conclude that they support fraudulent claims of vehicle business use as a legitimate form of tax avoidance.

Moves to tax earnings of more than $100,000 on superannuation pensions and annuities at 15 per cent instead of being tax-free have also been repealed. This move cost us $1 billion to allow the 16,000 wealthiest superannuation recipients to pay no tax at all on an annual retirement income of over $100,000. These would include the people that John Howard permitted to put $1 million into superannuation tax free in 2007 as a vote buyer.

The cost of tax concessions for superannuation continues to grow by about $5 billion per year and will soon top $50 billion.

The revised projections for revenue from the mining tax showed it raising $3.3 billion over the forward estimates. You may call that nothing but think what those charities you have cut funding from could have done with that. Perhaps the childcare and aged care workers could have got that pay rise after all. You cannot say, on the one hand, that it raises no revenue and then on the other, say it is a burden on business that is costing jobs and investment. All this at a time when record mining industry profits have outstripped growth in taxes and royalties.

The Coalition have also pledged to reduce company tax by 1.5% which will cost us $5 billion. One reason given for this is to offset Tony’s paid parental leave scheme levy. Tony and Joe assure us that PPL is fully funded by a 1.5% levy on businesses with a turnover of over $5 million – they neglect to mention that the country loses $5 billion which will now be diverted to pay wealthy women to breed. Let’s just imagine that we had someone sensible in charge, scrapped Tony’s PPL scheme, scrapped the reduction of company tax, and kept the 1.5% levy on the top 5000 businesses. We would have an extra $10 billion a year to spend on, oh I don’t know, renewable energy perhaps?

The carbon price raised $6.6 billion in its first year which was passed on to households, trade-exposed industry, and research and development grants. Repealing it could punch a hole as big as $7.6 billion a year in the budget. Compare that to the Coalition’s Direct Action fiasco which will not raise revenue and cost the budget $3.2 billion over the next four years. Instead of collecting about $30 billion and taking action on climate change we will be paying over $3 billion to polluters – makes sense, NOT.

Moving on from the revenue side to spending, MYEFO tells us that the majority of the $17 billion deterioration in this year’s budget is due to Coalition spending decisions.

As soon as Joe Hockey got the keys to the safe he borrowed $8.8 billion and gave it to the Reserve Bank of Australia in what has been described as a gamble on the foreign exchange market. The RBA certainly didn’t ask for Hockey’s $8.8 billion capital injection and didn’t think it was necessary. It wanted to rebuild its capital over several years by retaining its profits and not paying the government dividends. Hockey’s $8.8 billion injection this year means dividends will be paid to the government over the next few years.

So the truth of this exercise is Hockey wanted Labor’s deficit to look bigger and he is happy to blow several hundred million dollars interest a year in an attempt to make his performance as Treasurer look good.

After years of abuse about the cost of Labor’s asylum seeker policy, Hockey added an extra $1.2 billion for offshore processing. Presumably this will be spent on extra guards and orange life rafts and bribes to other countries to see to our problem.

An extra $1 billion was allocated to fund eight infrastructure projects that were to be funded from the former Government’s Regional Infrastructure Fund which was paid for by the mining tax. Instead of the MRRT providing the funds, they will now come direct from the taxpayer as the Roads Prime Minister fulfils his dream. And now we have Matthias Corman telling us that the possible $4 billion raised from the sale of Medibank Private will also be spent on roads. Enough with the roads already – we don’t want to become another Beijing. How about another airport for Sydney or high speed rail or urban public transport?

Hockey goes on to say that “Without any policy changes, the budget is projected to be in deficit in each and every year to 2023‑24.” A little further down the page we read that “The Government is committed to returning the budget to sustainable surpluses that build to at least 1 per cent of GDP by 2023‑24.” Ummmm, what’s the difference? Does that mean that you intend to make no policy changes, or that your policy changes will make no difference?

Much has been made of the promised Commission of Audit. MYEFO stated that:

“The Commission of Audit will be guided in its work by the principles that government should:

  • live within its means;
  • have respect for taxpayers in the care with which it spends every dollar of revenue; and
  • do for people what they cannot do, or cannot do efficiently, for themselves, but no more.”

Considering what you are prepared to spend money on – fleets of joint strike fighters, submarines, unmanned drones and one-use orange life rafts, $10 billion to keep asylum seekers locked up, gold plated paid parental leave, grants to polluters, billions a year on fossil fuel subsidies, endless reviews, audits, white and green papers, and Royal Commissions, bigger new planes so Tony can accommodate the film crews in VIP luxury, a $70,000 pay rise for Campbell Newman, $16 million for Cadbury – I think it is YOU who should be fearful of what the Commission has to say.

Rather than telling all of US to tighten our belts and prepare for big cuts, how about you think about your priorities. You are throwing away money by your tax cuts and your spending priorities are crazy. I will be interested to see if the Commission of Audit agrees with me, or will those bits be excluded from the censored version? It’s amazing how this government, champions of free speech, refuse to release documents and information and when they do, they redact so much it reads like a tv guide.

At the risk of sounding sexist, perhaps having a few more women in Cabinet might help. They are often better at seeing the big picture and making the most of the income you’ve got.

Stop the theatrics Joe. We are on to you. The dispatch box is your stage, but your script of blaming Labor and giving misleading information is becoming very tired. Every time you and Tony spoke this week, in your softening us up for the budget, you said Labor left us with a debt of $667 billion and cried shame shame at the Opposition. Well shame on you for your purposeful distortion. To counteract your manipulation, and to make sure the public understands the truth I will once again quote from your own document.

“Net debt is forecast to be $191.5 billion in 2013-14 and reach $280 billion in 2016-17.”

Let’s get real here!

Shining a light on dark places

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The attempt to sell the repeal of Section 18c of the Racial Discrimination Act has led to a new page in the “phrases to repeat” Coalition script. Everyone from Tony Abbott and George Brandis to Tim Wilson is saying that it is the responsibility of the community to “shine a light on dark places”.

I realise they are referring to bigotry and racism but I think it is a laudable sentiment which should be embraced and extended.

I would like a light shone on Manus Island and Nauru and “on-water operations”. I would like to see a cost benefit analysis of our offshore detention policy. I would like to see a total bill for Operation Sovereign Borders and the incarceration of innocent people.

Add up how much we are spending on orange life rafts and unmanned drones and having a naval fleet patrolling. Add up how much we are spending on flights for politicians, aid workers, guards, journalists, asylum seekers etc to fly backwards and forwards to Indonesia, PNG, Nauru, Christmas Island, Cambodia, Solomon Islands and everywhere else we are trying to make complicit in this inhumanity. Add up how much it is costing us to keep 30,000 people locked up in limbo.

Next, this government is carrying out a concerted campaign to discredit unions using the Craig Thomson case to justify spending hundreds of millions on a Royal Commission and the re-establishment of the ABCC. I find this hard to understand as Mr Thomson is going to gaol – doesn’t this show that we already have a system of oversight by which corrupt officials can be prosecuted? Aren’t the police and ICAC better suited to deal with bribery, corruption and intimidation?

The $24,000 that Mr Thomson misappropriated pales into insignificance compared to the amount of money that politicians have been forced to repay for fraudulent expense claims that are brushed off as “mistakes” if someone questions them. I would like a light shone on parliamentarians’ entitlements and for the Finance department to exercise better governance.

I would like to shine a light on who is actually running our government. Every time Tony Abbott meets with world leaders Peta Credlin is sitting at the table. I know she runs his office but surely there are some diplomats, economists. cultural, trade or defence experts that deserve a spot in front of her.

I want to know why Cardinal Pell and Maurice Newman feel empowered to advise the government on climate change. I want to know why Mark Textor feels empowered to wade into foreign affairs on Twitter. I want to know who are the puppet masters. (see Andrew Robb video).

Speaking of puppet masters, I want to shine a light on political donations, and on paid political advertising which is banned in the UK.

Coincidentally, in a recent freedom of speech ruling in the European Court, the UK government successfully argued that the ban on paid political advertising was necessary to achieve the “legitimate aim of avoiding the distortion of debate on matters of public interest by unequal access to influential media by financially powerful bodies.”

The Grand Chamber of the European Court of Human Rights held, by a majority of nine to eight, that the long-standing ban on paid political advertising on television and radio in the United Kingdom does not contravene the right to freedom of expression in article 10 of the European Convention on Human Rights.

Wealthy corporations, organisations and individuals have unusual access to, and influence over, the parties and politicians to whom they donate. Hundreds of millions of dollars are donated and then spent on advertising. Not only is this a ridiculous waste of money, it makes our political parties beholden. They are focused on chasing sponsorship so they must appease those with the means to bankroll them. People back winners so they must concentrate on being popular rather than governing.

The media must have a good relationship with a politician to gain access and to be fed the leaks. The politician must have a good relationship with the media because they choose what the next headline will say and which stories will be reported. This symbiotic arrangement has degenerated so far that politicians and journalists are amongst the least respected professions in the country.  The following arrangement doesn’t add to the public’s trust.

“The $600 million lease on the current RAAF fleet of two Boeing 737 business jets and three smaller Challenger 604 aircraft will expire next year and the government will seek agreement from media companies to limit criticism of any decision to opt for bigger planes

According to senior government sources the new plan would involve aircraft such as the Airbus A-330 or Boeing 777 that can fly hundreds of passengers over long distances with fewer stops. The Boeing 777 and Airbus A-330 each cost about $250 million and both can carry in excess of 200 passengers in VIP configuration.”

And why should the media not report on this? Because the current planes “are too small to carry a full complement of press gallery journalists and crews” so let me spend my hundreds of millions in peace and you get a free ride to come film me. The taxpayers are footing the bill for Tony’s tame journos to be flown around the world presumably for free.

I would like to shine a light on corporate lobbyists and the deals they make with politicians. After leaving Parliament, an inordinate number of ex-pollies secure plum jobs with corporations they dealt with in their portfolio.

After bugging the East Timorese cabinet rooms under the guise of building them as a foreign aid project when he was Foreign Minister, Alexander Downer became an adviser to Woodside Petroleum, the company that was negotiating to exploit the oilfields. Peter Reith was appointed as a consultant to defence contractor Tenix immediately after resigning as defence minister. Health minister Michael Wooldridge signed a $5 million building deal for the Royal Australian College of General Practitioners and days later, after resigning as health minister, was employed by the college as a consultant.

I would like to shine a light on the truth about debt and deficit. Between PEFO and MYEFO, under the Coalition government, the projected deficit for the year blew out by $17 billion. $10.2 billion of that was due to spending decisions made by the Coalition, notably an $8.8 billion gift to the RBA, an extra $1.2 billion for offshore processing, and tax breaks for those with super balances over $2 million.

Quoting from the Coalition “phrases to repeat” sheet, you will hear every one of them say Labor left us with a debt of $667 billion. Well to quote Joe Hockey’s own MYEFO document which he produced in mid-December:

“Net debt is forecast to be $191.5 billion in 2013-14 and reach $280 billion in 2016-17.”

The figure of $667 billion comes from Hockey’s MYEFO estimation of the possible gross debt in ten years’ time. Surely between now and 2024 he will be able to come up with a solution or will we still be hearing about Labor’s debt?

Where we need a glaring spotlight is on the free trade agreements that we are rushing headlong into. With Peter Dutton insisting that our health system is unsustainable why on earth would you enter into agreements that will unquestionably send our PBS into a death spiral? Allowing the evergreening of patents and other measures to benefit the pharmaceutical companies (who just so happen to be generous sponsors of the pollie pedal) will potentially spell the end of generic medicines with a huge increase in the price we pay for our drugs.

I could go on but all this light shining is burning me out. We need all of you to be torch bearers for our country. Do as Tim Wilson urges us to do – shine a light on the dark places where this government is trying to lead us.

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