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Hockey’s budget: the bucket list of a Young Liberal

By 14 May 2014 53

andrew-barr

Budgets are about choices and the Commonwealth budget delivered last night reflects an economic and social strategy driven purely by ideology – the bucket list of a Young Liberal.

Aptly labeled ‘Black Tuesday’ by my Federal colleague Gai Brodtmann, the budget will cause one of the biggest economic shocks in Canberra’s history – with little additional support to offset the hard cuts to the public service, education and health. The so-called infrastructure budget’ delivers no infrastructure to the ACT. In fact, the number one infrastructure project our business community supports – the Australia Forum-  was specifically knocked back by the Prime Minister. And the Canberra Liberals have the cheek to blame the ACT Government and business community.

The number of public service jobs that will go as a result of this budget is greater than the Liberal Governments previous commitment. The impacts will extend much wider than just to public servants; this will hurt retail workers, tradies, construction workers and small businesses.

The retraction of the Commonwealth Public Service will have a larger and more immediate impact than the automotive industry shutdowns in Victoria and South Australia, or the BHP closure in Newcastle, and without the transitional support that was offered to those states. Schools, hospitals and health services also bear the brunt of budget cuts, with a number of National Partnerships being cut and slower growth of spending in the longer term.

On top of this, Canberrans will also be slapped with higher fuel prices and a sick tax when seeing a GP, forcing more people into our Emergency Departments where the Commonwealth wants State Governments to tax them further.

These cuts are being done in the name of a budget emergency, although it’s not clear that we are in an emergency or mess of debt and deficit. Australia has a stable AAA credit rating. With an underlying cash deficit at 3 per cent of GDP (and falling) the big budget scare is without any basis in fact.  There are longer-term structural challenges that need to be addressed but it seems sensationalist to call the current state of the Budget a crisis.

Everyone will not be sharing the pain of this budget.  The Liberals have already handed back over $3bn of Labor’s structural savings to high-income earners and corporations. The high income earners debt levy is temporary while the cuts faced by pensioners, families, those with a disability and in need of health services, workers, innovative businesses, schools, universities and cultural institutions are permanent.

The Budget is hitting the most vulnerable and it isn’t preparing us for the future.

The cuts will not support economic growth.  The OECD warned that “heavy front loading of fiscal consolidation should be avoided”. The economy is transitioning out of the largest ever resources boom and the Commonwealth Budget plays a key role in managing this transition. Cuts to research, services and local innovation will not encourage sustainable long-term growth. A medical research fund linked to GP co-payments is a form of budget bribery that is rather breath-taking. Cuts to education and higher ed are short sited and will hurt our nations future economic growth.

The Budget bottom line does not mysteriously improve because of policy decisions alone. In addition to policy decisions, the Budget is also influenced by the economic parameter assumptions and forecasts.   And what about tax reform? Rather than encouraging jurisdictions to do the hard work of tax reform – as we have done locally – he is goading the states to beg for GST changes. Closer to the 2016 election, look for Treasurer Hockey to announce a small uplift in Treasury forecasts and estimates for GDP, employment and inflation in the coming years to magically improve the Budget bottom line .

Andrew Barr MLA
Treasurer

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53 Responses to Hockey’s budget: the bucket list of a Young Liberal
#1
Canfan4:50 pm, 14 May 14

Note from Editor: RiotACT has contacted all political parties seeking their feedback on the 2014 Budget. Responses will be posted once received.

#2
Masquara4:54 pm, 14 May 14

Andrew, what is your position on the fuel levy?

#3
Codders1116:33 pm, 14 May 14

Couldn’t agree more. Good response.

#4
Andrew Barr6:35 pm, 14 May 14

It is a broken promise. I doubt many people who voted Liberal last year were expecting to get an increased fuel levy. It is a curious budget measure given their desire to abolish carbon pricing. I suspect it will pass the Senate though – the carbon tax you have when you’re not having a carbon tax.

#5
HiddenDragon6:37 pm, 14 May 14

Well, indeed – and all of this bad news is on top of the already high living costs in Canberra, which will presumably only get worse when we learn of the next round of “it’s only a coffee a day/ week whatever…” increases in the ACT Budget.

#6
lumnock8:06 pm, 14 May 14

I just popped in to say that I think it’s great to have this sort of thread on the riotact. I hope it leads to a bit more continuous dialogue between local politicians and the public on this site, rather than just pre-election when we all get overwhelmed in one big hit.

#7
wildturkeycanoe8:42 pm, 14 May 14

Masquara said :

Andrew, what is your position on the fuel levy?

Well obviously Andrew will not be affected one iota by the fuel levy, as politicians get easily over $120,000 per year plus another 70-110% on top. What’s another lazy $20 per week for them? Even then it will be paid back by us as taxpayer funded travel. Who trusts any politician, even when on the other side of the debate, when they all sit in a room and behave like children in a playground arguing over “He said, she said”. All we know from the budget is that those who are borderline on poverty are now pushed into poverty. The numbers don’t lie and if real results about the satisfaction of this budget ever come out, they will be staggeringly in favor of turning time back approximately 9 months and re-doing the whole thing. I would not be surprised how many folks change their mind about the current administration.

#8
dungfungus9:14 pm, 14 May 14

Andrew Barr said :

It is a broken promise. I doubt many people who voted Liberal last year were expecting to get an increased fuel levy. It is a curious budget measure given their desire to abolish carbon pricing. I suspect it will pass the Senate though – the carbon tax you have when you’re not having a carbon tax.

Federal Labor continuosly broke promises on delivering budget surpluses and no one in the media gives a tinker’s cuss. People who voted for the coaltion voted for the spending and waste to stop and a plan to be enacted to stop the borrowing and repay the debt. An increase in the fuel levy is part of that strategy. No one complained when fuel increased as consequence of the carbon tax.
Our debt to GDP is dangerously high for a country that hardly manufactures anything. In the event of another global downturn when no one wants our minerals what are we going to make to trade out of debt.
All the other countries that defenders of the debt compare us to are giants in manufacturing.
The triple A credit rating will only last as long as one of our creditors asks for some money back and we can’t pay.

#9
dungfungus10:10 pm, 14 May 14

lumnock said :

I just popped in to say that I think it’s great to have this sort of thread on the riotact. I hope it leads to a bit more continuous dialogue between local politicians and the public on this site, rather than just pre-election when we all get overwhelmed in one big hit.

hear hear!

#10
Andrew Barr10:13 pm, 14 May 14

WildTurkeyCanoe – everyone will pay the increased fuel levy but you are right that those on lower incomes will feel it more than those on higher incomes.

Dungfungus – you have probably articulated the views of many rusted-on coalition voters but I suspect that there were many people who might have believed the Prime Minister when he said things like this: https://www.youtube.com/watch?v=wAHNXdHai0g

#11
Walker10:26 pm, 14 May 14

Enemies may lose my respect but that’s not to say friends don’t need to earn it.

Let’s see how we navigate, on local issues before during and after the cards dealt. The ones we can’t fight off, at least. Whatever it is, we will still need good local leadership.

That said, yes, these are good points overall and it will be interesting to have this sort of thing on riotact. I wonder how it will go. And I wonder how the nation will go on these things (and plenty of other concerns). Something tells me there’s more afoot this year somehow or other. We’ll see.

#12
JC12:02 am, 15 May 14

dungfungus said :

Federal Labor continuosly broke promises on delivering budget surpluses and no one in the media gives a tinker’s cuss. People who voted for the coaltion voted for the spending and waste to stop and a plan to be enacted to stop the borrowing and repay the debt. An increase in the fuel levy is part of that strategy. No one complained when fuel increased as consequence of the carbon tax.

Fact, under this budget the Liberals will be spending $415B, which BTW was the exact same amount that Labor had forecast to spend this year. Their revenue projection however revenue will be about $25b less.

So please pray tell how this budget is going to stop borrowing and repay debt?

All this budget is, is a redistribution of money and costs to the total benefit of the big end of town and to the detriment of the average person. Ironically it was votes from the average person, tricked into thinking their was a budget emergency and heaps of government waste that got the Libs over the line at the last election. No doubt Hockey and Abbott have some bribes planned for the 2016/2017 budget to help let these people forget being royally screwed over.

#13
Walker12:10 am, 15 May 14

dungfungus said :

Andrew Barr said :

It is a broken promise. I doubt many people who voted Liberal last year were expecting to get an increased fuel levy. It is a curious budget measure given their desire to abolish carbon pricing. I suspect it will pass the Senate though – the carbon tax you have when you’re not having a carbon tax.

Federal Labor continuosly broke promises on delivering budget surpluses and no one in the media gives a tinker’s cuss. People who voted for the coaltion voted for the spending and waste to stop and a plan to be enacted to stop the borrowing and repay the debt. An increase in the fuel levy is part of that strategy. No one complained when fuel increased as consequence of the carbon tax.
Our debt to GDP is dangerously high for a country that hardly manufactures anything. In the event of another global downturn when no one wants our minerals what are we going to make to trade out of debt.
All the other countries that defenders of the debt compare us to are giants in manufacturing.
The triple A credit rating will only last as long as one of our creditors asks for some money back and we can’t pay.

To my mind (I’m not all up to scratch on all aspects of economics), some good questions in there. Any takers?

#14
justin heywood12:16 am, 15 May 14

lumnock said :

I just popped in to say that I think it’s great to have this sort of thread on the riotact. I hope it leads to a bit more continuous dialogue between local politicians and the public on this site, rather than just pre-election when we all get overwhelmed in one big hit.

This budget was something of a free kick for Labor. and you can’t blame the local lads for trying to make some political capital out of it.

But I wonder if Andrew will be so keen to blog on here when the ACT government has to make some tough choices of its own?

I’ll be very surprised if he does.

#15
rosscoact2:26 am, 15 May 14

IIRC it was Howard that put a cap on the fuel levy because he was copping some flack because the GST had pushed up petrol prices by 10% and the rationale of having a tax on a tax was so weak.

Can somebody with a better memory than mine confirm?

#16
laraeddy3:32 am, 15 May 14

Walker said :

dungfungus said :

Andrew Barr said :

It is a broken promise. I doubt many people who voted Liberal last year were expecting to get an increased fuel levy. It is a curious budget measure given their desire to abolish carbon pricing. I suspect it will pass the Senate though – the carbon tax you have when you’re not having a carbon tax.

Federal Labor continuosly broke promises on delivering budget surpluses and no one in the media gives a tinker’s cuss. People who voted for the coaltion voted for the spending and waste to stop and a plan to be enacted to stop the borrowing and repay the debt. An increase in the fuel levy is part of that strategy. No one complained when fuel increased as consequence of the carbon tax.
Our debt to GDP is dangerously high for a country that hardly manufactures anything. In the event of another global downturn when no one wants our minerals what are we going to make to trade out of debt.
All the other countries that defenders of the debt compare us to are giants in manufacturing.
The triple A credit rating will only last as long as one of our creditors asks for some money back and we can’t pay.

To my mind (I’m not all up to scratch on all aspects of economics), some good questions in there. Any takers?

Whether there was ever going to be a surplus again was part of pretty much every ‘news’ broadcast from post-GFC 2008 till 2013.- first sentence is …. well, actually, no adjective could describe how nonsensical that is.

Second sentence is a judgement call – I really don’t know why people voted for this rabble, and I suspect lots of those who did are now wondering about that too. Certainly the local bloke now in the Senate for this mob was never heard from during the election – so you do have to wonder about that. Did I hear the braying of many donkeys ???

Fuel (as in petrol, I assume) never did increase as part of carbon pricing – it was exempt. Which is not to say that the petrol companies didn’t use the excuse to jack prices up – but they will use any excuse to do that.

And in any event, the revenue from carbon pricing was used to compensate for any price increases resulting from carbon pricing (increase in tax-free threshold, increases in pensions, etc). And pretty much every analysis since then has found that there were no significant increase in prices as a result of carbon pricing – less than 0.5% of CPI according to renowned greenie activists and more than occasional stockbrokers J P Morgan (http://www.news.com.au/finance/business/carbon-tax-adds-up-to-04-to-cpi/story-e6frfkur-1226502382939),

Increases in electricity prices were down to the ‘network charges’ rort whereby we have all been conned into paying for extra transmission capacity while demand has actually dropped.

So, in the end, most of us were probably overcompensated (ie, better off), as it happened. Which might explain the lack of complaint.

And now we have a policy that says that well, you know, it is better that you and me and all the other taxpayers – in these days of fiscal ‘crisis’ – give billions to the companies that generate carbon pollution so that they will all be jolly decent and stop it. Oh, but we wouldn’t want to inconvenience them by asking whether they have done anything useful with that money. I should just rip a thousand or two out of my mortgage now and post it straight to ExxonMobil ! Lordy only knows, the poor devils need it. And there’ll soon be precious few public servants left in the Tax Office to do it for me.

Sorry, but whether you believe in climate change or not, that is what all you Coalition voters voted for.

But that is wholly consistent with a bunch of rent-seekers that just want to rip money out of all of us and hand it over to their corporate mates. Aren’t the NSW ICAC hearings fun to watch for Libs everywhere.

Our debt to GDP remains amazingly low compared to pretty much every comparable country on the planet. No one seriously argues we have a ‘debt crisis’ – it is a furphy. ‘Manufacturing’ has little to do with it. Our debt to GDP is around 11% – around the same as manufacturing giant Luxembourg. Canada, who are probably most like us, come in at 36%. Cash-strapped Germany (who seem to be able to buy and sell other bits of Europe at will, and with minimal grief) is running at around 44%, and has been for about a decade. Selling lots of Mercs just doesn’t seem to shift it.

Yep, we went up from about 5% pre-GFC – but the good old USA went from 36% to 61% over the same period. But Switzerland – well, yes, guess they make very nice clocks, but sure know their way around a currency deal – dropped from 23% to 20%. Go figure.

And yes, that’s right – those crazy, profligate, chocolate eating Swiss are twice as much in ‘crisis’ as we supposedly are !! (http://stats.oecd.org/Index.aspx?DataSetCode=GOV_DEBT)

And, really, if manufacturing was the issue, why has this govt been so supportive of local industries like Ford, Holden, Toyota, Ardmona SPC …..

So not one single bit of that nonsense holds up to even the most elementary bit of thought.

But I’m guessing no-one else here is surprised by that !

#17
bikhet6:47 am, 15 May 14

It’s hard to give credence to anything Andrew Barr might say about the Federal Budget when he won’t come clean on how the proposed light rail line will be funded:

http://www.canberratimes.com.au/act-news/act-treasurer-wont-say-how-canberras-light-rail-will-be-paid-for-wont-rule-out-a-rating-zone-20140513-zrbhk.html

That being said, I think Hockey’s budget is a crock. Yes, the culture of entitlement needs to be ended, but this isn’t the way to do it. Depriving the most needy to provide more middle-class welfare isn’t the way to go.

#18
Madam Cholet8:29 am, 15 May 14

dungfungus said :

lumnock said :

I just popped in to say that I think it’s great to have this sort of thread on the riotact. I hope it leads to a bit more continuous dialogue between local politicians and the public on this site, rather than just pre-election when we all get overwhelmed in one big hit.

hear hear!

But let’s not make it a platform for campaigning. We have enough of it in this small town without starting early on the local one.

#19
davo1018:32 am, 15 May 14

rosscoact said :

IIRC it was Howard that put a cap on the fuel levy because he was copping some flack because the GST had pushed up petrol prices by 10% and the rationale of having a tax on a tax was so weak.

The fuel excise was dropped by 6.656c/L in 2000 to off-set the increase due to the GST so there was no tax on a tax.

rosscoact said :

Can somebody with a better memory than mine confirm?

Here is one mea culpa.

#20
dungfungus5:19 pm, 15 May 14

Andrew Barr said :

WildTurkeyCanoe – everyone will pay the increased fuel levy but you are right that those on lower incomes will feel it more than those on higher incomes.

Dungfungus – you have probably articulated the views of many rusted-on coalition voters but I suspect that there were many people who might have believed the Prime Minister when he said things like this: https://www.youtube.com/watch?v=wAHNXdHai0g

Fair enough Andrew but the cuts to our publicly funded broadcasters was only 1% and most of that will be through cancelling the ABC’s contract to broadcast overseas.
I doubt if either the ABC or SBS will sack one person as a result. Mind you, some deserve sacking.
As long as your promise not to triple our rates holds good you have nothing to fear.
Tony Abbott has only broken promises once, so far. He has a long way to go to catch up with Wayne Swan.
http://www.smh.com.au/federal-politics/political-opinion/labor-has-choked-on-a-surplus-of-promises-20121220-2boz3.html

#21
watto235:29 pm, 15 May 14

JC said :

dungfungus said :

Federal Labor continuosly broke promises on delivering budget surpluses and no one in the media gives a tinker’s cuss. People who voted for the coaltion voted for the spending and waste to stop and a plan to be enacted to stop the borrowing and repay the debt. An increase in the fuel levy is part of that strategy. No one complained when fuel increased as consequence of the carbon tax.

Fact, under this budget the Liberals will be spending $415B, which BTW was the exact same amount that Labor had forecast to spend this year. Their revenue projection however revenue will be about $25b less.

So please pray tell how this budget is going to stop borrowing and repay debt?

All this budget is, is a redistribution of money and costs to the total benefit of the big end of town and to the detriment of the average person. Ironically it was votes from the average person, tricked into thinking their was a budget emergency and heaps of government waste that got the Libs over the line at the last election. No doubt Hockey and Abbott have some bribes planned for the 2016/2017 budget to help let these people forget being royally screwed over.

Stop using facts :-) the coalition don’t seem to like facts, coming from experts like economists and scientists. Despite Liberal saying there was a budget crisis, there really wasn’t. Being one of 10 or so countries with a AAA credit rating (which is only good if your side of politics achieved it) or the fact our debt to GDP ratio is incredibly low also is again only a fact if the coalition did it. Instead we’ll spread fear to convince people there is a problem.

The facts were we needed to probably do a few things to keep the debt from increasing and start decreasing, but certainly don’t need all the proposed changes. A balanced budget would have been fine. Like when a person has a mortgage of say $250k. Its nice to pay it off quicker, but most reasonable people wouldn’t pay so much off their house to the point they couldn’t afford to run their car or go to the doctors. This budget is like cutting downs costs to eat bread and water to pay of the house a few years earlier. Not necessary unless you have some fear or paranoia about debt.

#22
milkman6:38 pm, 15 May 14

watto23 said :

[Stop using facts :-) the coalition don’t seem to like facts, coming from experts like economists and scientists. Despite Liberal saying there was a budget crisis, there really wasn’t. Being one of 10 or so countries with a AAA credit rating (which is only good if your side of politics achieved it) or the fact our debt to GDP ratio is incredibly low also is again only a fact if the coalition did it. Instead we’ll spread fear to convince people there is a problem.

Absolutely. My neighbour owes $70k on his credit card, but I only owe $10k. Because I comparatively owe less I should keep on putting those dinners out, nice clothes and holidays on my credit card, even though I don’t earn enough to pay for it all.

#23
JC8:39 pm, 15 May 14

milkman said :

Absolutely. My neighbour owes $70k on his credit card, but I only owe $10k. Because I comparatively owe less I should keep on putting those dinners out, nice clothes and holidays on my credit card, even though I don’t earn enough to pay for it all.

Nope think you have you analogy wrong. Using yours as a basis it is like saying you should cut all spending so that you can pay off your $10K debt sooner, even though you can afford a $10k debit. As opposed to doing the sensible thing which is to pay down your debt down in a controlled and sensible matter.

Besides not sure if you noticed my post but the government is maintaining the status quo in relation to overall spending. All they have done is redistribute the spending down ideological lines and changed the income stream to ensure that those that can least afford it will be the ones paying.

#24
watto239:05 pm, 15 May 14

milkman said :

watto23 said :

[Stop using facts :-) the coalition don’t seem to like facts, coming from experts like economists and scientists. Despite Liberal saying there was a budget crisis, there really wasn’t. Being one of 10 or so countries with a AAA credit rating (which is only good if your side of politics achieved it) or the fact our debt to GDP ratio is incredibly low also is again only a fact if the coalition did it. Instead we’ll spread fear to convince people there is a problem.

Absolutely. My neighbour owes $70k on his credit card, but I only owe $10k. Because I comparatively owe less I should keep on putting those dinners out, nice clothes and holidays on my credit card, even though I don’t earn enough to pay for it all.

No that is not what I said. You still aim to pay it off, like any debt. Continuing to add to debt is bad if you can’t afford to repay it. The issue is Liberals have spread a lot of c$%p about our budget position to mush through radical cuts and changes.

Yet in the real world economists with no political bias have said the economy is fine, we just need to reduce some spending such that we are not paying debt with more debt. Labor and Liberal agree on this. Just some hardcore right wingers have swallowed the whole emergency thing to make the cuts look necessary.

Liberals are dumping several income streams as well and adding to spending, so they have make bigger cuts to cover their own spending as well.

Or we can sit here and tell Australians that the indonesians are going to invade (more scare tactics and lies) thus we need new jets, something which could be delayed til the end of their term when the budget would be healthier. We apparently want to end the age of entitlement, unless you want a baby in which case the current minimum wage for 18 months isn’t good enough. here have $50k instead, but apparently others who need the money just to live don’t deserve it yet a middle class or wealthy couple who can afford to have a baby on their own and would probably also afford to send that child to a private school get $50k to have the 6 months off.

#25
dungfungus10:35 pm, 15 May 14

watto23 said :

milkman said :

watto23 said :

[Stop using facts :-) the coalition don’t seem to like facts, coming from experts like economists and scientists. Despite Liberal saying there was a budget crisis, there really wasn’t. Being one of 10 or so countries with a AAA credit rating (which is only good if your side of politics achieved it) or the fact our debt to GDP ratio is incredibly low also is again only a fact if the coalition did it. Instead we’ll spread fear to convince people there is a problem.

Absolutely. My neighbour owes $70k on his credit card, but I only owe $10k. Because I comparatively owe less I should keep on putting those dinners out, nice clothes and holidays on my credit card, even though I don’t earn enough to pay for it all.

No that is not what I said. You still aim to pay it off, like any debt. Continuing to add to debt is bad if you can’t afford to repay it. The issue is Liberals have spread a lot of c$%p about our budget position to mush through radical cuts and changes.

Yet in the real world economists with no political bias have said the economy is fine, we just need to reduce some spending such that we are not paying debt with more debt. Labor and Liberal agree on this. Just some hardcore right wingers have swallowed the whole emergency thing to make the cuts look necessary.

Liberals are dumping several income streams as well and adding to spending, so they have make bigger cuts to cover their own spending as well.

Or we can sit here and tell Australians that the indonesians are going to invade (more scare tactics and lies) thus we need new jets, something which could be delayed til the end of their term when the budget would be healthier. We apparently want to end the age of entitlement, unless you want a baby in which case the current minimum wage for 18 months isn’t good enough. here have $50k instead, but apparently others who need the money just to live don’t deserve it yet a middle class or wealthy couple who can afford to have a baby on their own and would probably also afford to send that child to a private school get $50k to have the 6 months off.

As I said on another thread, we are still borrowing $1 billion a month to pay interest of $1 billion a month on the debt chalked up in the past 6 years.
You have just said “we just need to reduce some spending such that we are not paying debt with more debt…..” – so the red lights should be flashing shouldn’t they?

#26
farout9:20 am, 16 May 14

JC said :

milkman said :

Absolutely. My neighbour owes $70k on his credit card, but I only owe $10k. Because I comparatively owe less I should keep on putting those dinners out, nice clothes and holidays on my credit card, even though I don’t earn enough to pay for it all.

Nope think you have your analogy wrong. Using yours as a basis it is like saying you should cut all spending so that you can pay off your $10K debt sooner, even though you can afford a $10k debit. As opposed to doing the sensible thing which is to pay down your debt down in a controlled and sensible matter.

Besides not sure if you noticed my post but the government is maintaining the status quo in relation to overall spending. All they have done is redistribute the spending down ideological lines and changed the income stream to ensure that those that can least afford it will be the ones paying.

I thought the analogy was spot on. The budget is not ‘cutting all spending to pay off debt sooner’, because as you yourself pointed out the overall spending remains at status quo. Given the debt and the projected increase in medicare and pension payments into the future, the budget appears to be doing what you suggest – “the sensible thing which is to pay down your debt down in a controlled and sensible manner.”

#27
JC10:24 am, 16 May 14

farout said :

JC said :

milkman said :

Absolutely. My neighbour owes $70k on his credit card, but I only owe $10k. Because I comparatively owe less I should keep on putting those dinners out, nice clothes and holidays on my credit card, even though I don’t earn enough to pay for it all.

Nope think you have your analogy wrong. Using yours as a basis it is like saying you should cut all spending so that you can pay off your $10K debt sooner, even though you can afford a $10k debit. As opposed to doing the sensible thing which is to pay down your debt down in a controlled and sensible matter.

Besides not sure if you noticed my post but the government is maintaining the status quo in relation to overall spending. All they have done is redistribute the spending down ideological lines and changed the income stream to ensure that those that can least afford it will be the ones paying.

I thought the analogy was spot on. The budget is not ‘cutting all spending to pay off debt sooner’, because as you yourself pointed out the overall spending remains at status quo. Given the debt and the projected increase in medicare and pension payments into the future, the budget appears to be doing what you suggest – “the sensible thing which is to pay down your debt down in a controlled and sensible manner.”

Still don’t see how the analogy is spot on. You said something about because your debt is low and someone else high that you can spend up big. Don’t understand that in the context.

As for the nation I guess your right the budget may well allow the debt to be repaid` in a controlled manner over time, but as overall spending is remaining constant why the need for all the ‘pain’.

The answer is of course simple, the budget is about a redistribution of government spending and income streams along ideological lines, but with the government blaming the previous government to pay down this evil debt the severity of which is in the imagination of the government.

But the figures don’t lie at the end of he day. Spending remains the same, income is lower, cuts everywhere for what? Ideology.

#28
farout11:04 am, 16 May 14

JC said :

farout said :

JC said :

milkman said :

Absolutely. My neighbour owes $70k on his credit card, but I only owe $10k. Because I comparatively owe less I should keep on putting those dinners out, nice clothes and holidays on my credit card, even though I don’t earn enough to pay for it all.

Nope think you have your analogy wrong. Using yours as a basis it is like saying you should cut all spending so that you can pay off your $10K debt sooner, even though you can afford a $10k debit. As opposed to doing the sensible thing which is to pay down your debt down in a controlled and sensible matter.

Besides not sure if you noticed my post but the government is maintaining the status quo in relation to overall spending. All they have done is redistribute the spending down ideological lines and changed the income stream to ensure that those that can least afford it will be the ones paying.

I thought the analogy was spot on. The budget is not ‘cutting all spending to pay off debt sooner’, because as you yourself pointed out the overall spending remains at status quo. Given the debt and the projected increase in medicare and pension payments into the future, the budget appears to be doing what you suggest – “the sensible thing which is to pay down your debt down in a controlled and sensible manner.”

Still don’t see how the analogy is spot on. You said something about because your debt is low and someone else high that you can spend up big. Don’t understand that in the context.

As for the nation I guess your right the budget may well allow the debt to be repaid` in a controlled manner over time, but as overall spending is remaining constant why the need for all the ‘pain’.

The answer is of course simple, the budget is about a redistribution of government spending and income streams along ideological lines, but with the government blaming the previous government to pay down this evil debt the severity of which is in the imagination of the government.

But the figures don’t lie at the end of he day. Spending remains the same, income is lower, cuts everywhere for what? Ideology.

Milkman left out his sarcasm marks in the “spend big because my neighbour is more in debt” comment. Which by the way is what the opposition is proposing to do.

I’m no economist but the budget seemed to be laying the foundation for structural, strategic change, not a short term fix this year. By introuducing a price point to medical services, it creates the realisation that these services are not free. People will probably cross-check that they are being billed for services actually received – at the moment there is no incentive for patients to check what is being billed to Medicare. Encouraging younger people to find work instead of relying on the dole is a significant change in mindset. Same for encouraging employers to find work suitable for older people (desk jobs, admin assistants, etc.), Getting people to realise that welfare is only a supplement to their normal income, not the equivalent of a salary, is another good move. HECS holders will pay their debts back quicker because that will unlock money that can go to the more needy. All these measures will control spending in the medium-long term (even if this year it is not much of a saving), and lay the ground for structural tax reform over the next 2 years. Which may be tax rate rationalisation, increase in Super Tax, increase in GST, limiting Capital Gains, etc,

Does anybody think the problem can be solved by just increasing the top tax rate to say 70% and letting spending trends continue as they are?

#29
neanderthalsis1:59 pm, 16 May 14

JC said :

farout said :

JC said :

milkman said :

Absolutely. My neighbour owes $70k on his credit card, but I only owe $10k. Because I comparatively owe less I should keep on putting those dinners out, nice clothes and holidays on my credit card, even though I don’t earn enough to pay for it all.

Nope think you have your analogy wrong. Using yours as a basis it is like saying you should cut all spending so that you can pay off your $10K debt sooner, even though you can afford a $10k debit. As opposed to doing the sensible thing which is to pay down your debt down in a controlled and sensible matter.

Besides not sure if you noticed my post but the government is maintaining the status quo in relation to overall spending. All they have done is redistribute the spending down ideological lines and changed the income stream to ensure that those that can least afford it will be the ones paying.

I thought the analogy was spot on. The budget is not ‘cutting all spending to pay off debt sooner’, because as you yourself pointed out the overall spending remains at status quo. Given the debt and the projected increase in medicare and pension payments into the future, the budget appears to be doing what you suggest – “the sensible thing which is to pay down your debt down in a controlled and sensible manner.”

Still don’t see how the analogy is spot on. You said something about because your debt is low and someone else high that you can spend up big. Don’t understand that in the context.

As for the nation I guess your right the budget may well allow the debt to be repaid` in a controlled manner over time, but as overall spending is remaining constant why the need for all the ‘pain’.

The answer is of course simple, the budget is about a redistribution of government spending and income streams along ideological lines, but with the government blaming the previous government to pay down this evil debt the severity of which is in the imagination of the government.

But the figures don’t lie at the end of he day. Spending remains the same, income is lower, cuts everywhere for what? Ideology.

The analogy is fairly close, but needs to add in that the repayments on the credit card, the mortgage, the new car, the phone bill, the electricity and the weekly grocery bill all add up to more than the weekly wage, i.e. we have a structural deficit. So to fix it you need to earn more, spend less or do a bit of both.

#30
damien haas5:28 pm, 16 May 14

Swan promised us at least four surpluses, Hockey hasn’t even promised one. Clearly this makes Swan the better treasurer.

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