Sunday, May 15, 2011

Treading Water

Last week saw the release of The Budget, which is probably the biggest event on the political calendar in a non election year.

The reasons are obvious. Vast quantities of money are sloshed around in a big vat right in front of our eyes, hypnotising us. It's all $1500 for this and 30% rebate for that and 'a program costing 4 billion dollars over four years.' It reminds me of when I feed my girlfriend's cats; when I get the food out of the fridge, they're absolutely riveted by my every move, knowing that all that wonderful food is right there but that they can't quite get at it... yet.

And so it went this week.

Most of the talk and analysis of the Gillard Government's first budget revolved around who would get what sort of cash handouts and who would have their's trimmed back. The same grim, unedifying spectacle that Budget week has been since the Howard Government massively expanded Government assistance to middle income families in the year 2000 and so turned the whole process into something akin to a game show.

Prior to the budget being released, Gillard and Treasurer Wayne Swan had made quite a bit of noise about how they were going to get 'tough. You know, how they would bring in a 'tough' budget and get 'tough' on dole bludgers and make some 'tough' cuts to programs that they really liked and that 'tough' sacrifices would have to be made in the national interest. And if people didn't like it, well, that was just tough.

So it would probably surprise very few, after all this 'tough' build up, to find that the Budget, when released, did nothing of the sort. What we were given, in very brief summary, was $22 billion worth of cuts in spending married to new spending worth $17 billion. A net change in the overall position of the Government's finances for the next fiscal year, in other words, of $5 billion. Now perhaps that sounds like a lot of money, but in an economy worth more than $400 billion, it's a bit like someone deciding to lose weight by eating low fat cream instead of regular.

Most of the cuts were directed at trimming some of the fat off what is usually referred to as 'middle class welfare' i.e. Taxpayer funded cash handouts to people who really ought to be able to stand on their own two feet but never have to because a lot of them live in marginal seats and both major political parties suck up to them. The major cuts to these programs this time were directed at Family Assistance payments and the Dependant Spouse Rebate tax offset. In case you're unfamiliar with these payments, a brief note on both and what the Government has decided to do with them:

* FAMILY ASSISTANCE: Payments to help with the cost of raising children, paid either fortnightly or annually to parents with dependent children aged 0 - 25. Means tested with a cut off point previously tied to the Consumer Price Index (CPI), meaning the cutoff point would rise a few percent each year. What the Government has decided to do is freeze the cutoff point at $150 000, meaning that families with income close to this point will, most likely, find their income gradually rises above it and their benefits will cease. A measure expected to effect approximately 70 000 families over the next three years.

* DEPENDANT SPOUSE REBATE: A tax credit of up to $4 000 per annum for couples who have no children and have one member staying at home... That's right, up to four grands worth for one childless adult to sit at home and do essentially nothing. This measure dates from 1936 so may be a bit past it's use by date, in terms of relevance, and the Government has decided to do away with it, for people with dependent spouses under 40 years. Affecting approximately 120 000 people.

These, then, are the primary savings measures, affecting just under 200 000 households.

At the same time, the Government has opted to increase the Family related benefits for anyone not effected by the above measures i.e. the vast majority of people. So a lot of people will actually be better off under the new provisions and the ones that aren't, well, I agree that a household income figure of $150 000 doesn't make you rich, but if you can't live on that level of income without Government support then something is wrong somewhere. Time to buy some budgeting software or see a financial counsellor, folks.

You would think then, considering that the cutbacks are targeted at a small number of people and are attached to increases for everyone else, that the Government would be immune to criticism of heartlessness or not wanting to help Australian families.

And you'd be wrong.

For this is exactly the argument that Tony Abbott is making.

And the Opposition Leader appeared to have made up his mind beforehand that he would get straight out and attack Labor as a pack of miserable scrooge grinches determined to ruin the lives of any double income families, regardless of what the Budget actually contained. For he was at it as soon as Wayne Swan's turgid Budget speech was over, (and yes, that link goes to a transcript of the speech, but I'd only consider it if you are suicidal) immediately taking to any available media outlet to declare Labor's hatred of 'aspirational' families (Aspirational in this instance seemingly meaning any family that might 'aspire' to voting Liberal at the next election).

Abbott himself had a more entertaining, and entirely unique, strategy for his nationally televised, Budgetary reply speech: Ignore Labor's budget altogether and talk about whatever popped into his head (primarily boat people, boat people and... ummm... boat people).

He did this in spite of what was contained in the Budget itself, and in spite of his repeated recent criticism of Government waste, repeatedly declaring:

'What you've got to realise Tony/Tracey/George/Anna is that this Government has always been happy to splash money around everywhere, in the most wasteful fashion imaginable, with no regard to the impact on the Budget bottom line, or what's best for the country, and now that they've decided to stop doing that we're determined to stop them from stopping!

For which sort of mealy mouthed Doublespeak he mostly got a pat on the back from the conservative press, something along the lines of 'ABBOTT VOWS TO PROTECT FAMILY BENEFITS.'

And this highlights the problem with the Opposition leader, who seems to feel that he can say and do whatever he likes, regardless of how tenuously it may be attached to reality.

Or, alternately, it may just highlight a problem that has crept into our political system in general, whereby Opposition Leaders do just that, 'oppose' and then worry about figuring out what they actually stand for or what policy aims they'd like to achieve once the Government falls over and they find themselves elected. This phenomenon is very much on display where I live in Victoria where, after years of lambasting the former Labor Government about the level of public debt it had run up, the newly elected Liberal Treasurer, Kim Wells, announced he would be tripling that same level of debt in his first budget. When asked about the apparent hypocrisy of this, he said:

'Well I said a lot of things before. But that was then and this is now and why don't you just go and get fucked, eh?'

Well, he didn't actually say that, but the actual quotes he used in his defence would make you want to punch something.

Which brings us back to the Federal Budget.

And the reality of the situation is that the Budget released last week does little more than tread water, highlighting the fragile position Labor finds itself in, governing in a minority and feeling beset on all sides. There are no big new policy ideas in this years Budget, and no really real cuts to existing programs either. They tried as hard as they could not to offend anyone and while they may have succeeded on that score, the public hasn't warmed to what has been announced either.

With Labor faring so badly in the polls - if recent figures were repeated at an election the only Labor figures you'd see near Federal Parliament would be the workers tending the Parliamentary lawns - a little more boldness than what has been displayed will be required.

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