Chasing the Norm

Australian academic and blogger on politics, international relations, and culture

The real deficit is the one between their ears…

As mentioned below, the Liberals had a press conference this morning on debt reduction, and released a shiny new policy document. Naturally the media ignored the policy for the horse race issue, so your dutiful blogger went through and read the proposal. One problem: It doesn’t actually say anything. Here is the sum total of the Liberals policy for debt reduction 6-12 months before an election:

This morning's conference, from Turnbull's twitter feed

This morning's conference, from Turnbull's twitter feed

1)The Coalition will do more with less by reducing waste and duplication throughout the Australian Government, and between the federal and state governments.
2)The Coalition will immediately upon coming into government establish a Commission for Sustainable Finances to report within three months on waste and duplication in every agency and program of the government.
3) The Coalition will not repeat Labor’s cash splashes. Handing out $23 billion in cash may be popular, but it recklessly adds to debt.
4) The Coalition will pursue a vigorous reform, infrastructure and innovation agenda to lift productivity and increase economic growth.
5) The Coalition will support small businesses, the engine room of the economy, through our Small Business Action Plan.
6) The Coalition commits to a responsible long term objective of returning government’s share of the economy to the level achieved by the previous Coalition Government…. The last five Coalition Budgets had spending of less than 25% of GDP. Only the Coalition can be trusted to return the government’s share of the economy to this level.
7)The Coalition is committed to addressing all of these problems (Complexity, time-cost,reduced incentives etc) in a comprehensive and principled program of tax reform.
8)The Coalition will establish a Parliamentary Budget Office, which will be independent of both the government and the opposition, to ensure the public and Parliament receive honest and timely analysis of the budget, financial results and specific programs.
9) Further, the public will be able to track government debt at a real-time website detailing the size and composition of borrowings, interest paid and projections into the future.

Putting it into a list makes it look far more substantial, but have a look again at that list. Only #8 & 9 deal with specifics (both are good ideas, though the website is more about advertising, as such figures are already on budget.gov.au) Numbers 1,4,7 have been promised by every single opposition since the beginning of time but dont matter at all without specifics. (Here is just one of dozens of press releases labor put out on the issue prior to the 2007 election). Number 5 is just a statement of support, and 3 is utterly redundant (of course they won’t repeat the stimulus given its already in place and the crisis is passed!). Only 6 seems new, though as I’ve mentioned before there is no logical reason why 25% is the ideal figure (indeed in early September Hockey was saying it must be “no more than 24%, but I guess round numbers rule).

Given the bad position the Liberals are in today, only a comprehensive, detailed policy will get them any attention. If Rule #1 of Federal oppositions is don’t repeat the Fightback mistake of 93 (with Turnbull eerily imitating Hewson), Rule #2 is don’t do invisibly small target’s (ala Beazley 98) either. There is a happy balance in the middle. Howard and Rudd both won by proposing a number of key, detailed area’s of policy in ground they wanted to fight on, and then obscuring the differences on everything else. Turnbull can’t win, but he can at least fight a respectable campaign for principles he believes in by being bold. Far better to be remembered for going out fighting for your ideas (that may one day become accepted wisdom as Hewson’s GST now is), than as a front man without the courage of his convictions. (Jason Soon on Crikey makes a similar point about Turnbull’s failure to live up to his hoped-for-liberal creed)

If the brain’s trust in Liberal HQ want some ideas, how about reducing the churn of taxes/welfare as John Humphreys advocates:

The Australian welfare system—including health, education and handouts—costs more than $250 billion per year. Some of this is redistribution from the relatively rich to the relatively poor. However, about half of the welfare is pointless ‘churn,’ where the same person both pays taxes and receives welfare benefits.
Some of this churn is ‘cash churn’ where people both pay tax and receive cash from the government. But the bigger problem is ‘services churn’ where middle- and high-income earners pay tax and receive government-subsidised health and schooling services.

By removing middle-class welfare in exchange for income tax cuts, the government could reduce tax and welfare by about $80 billion without leaving anybody worse off.

Such reform would be bold, enticing (everyone, esp the press would focus on the massive tax cuts this would mean), rally the base (cutting welfare/bureaucracy) and give a radical plan to pay down the debt in their first term, not to mention long term benefits to pay for healthcare (as Humphreys’ advocates). Hell I’d vote for it…

The idea’s are out there, the Government has massive targets that can and should be hit, but so long as the Liberal Party is serving up this shallow pap, the equivalent of a warm towel to fix a gunshot, they will be rightly ignored.

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  1. Thanks Andrew. I reckon the idea of cutting back on middle class welfare and pointless tax-welfare churn is an idea that works well for both sides of politics. The only problem is that politicians would lose $80 billion opportunities to make themselves look good. :\