14 May 2014

End of entitlement is like the 'recession we had to have'

| Peter Clack
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Joe Hockey is seeking to stamp out what he sees as a floodtide of entitlement that he argues is contributing to public debt and paralysing investment and innovation. Hockey wants to put brakes on welfare and unemployment payments and redirect new revenue streams into nation-building projects, like roads and airports. His budget seeks to reduce the deficit from $49.9 billion to $29.8 billion by next year and then $2.8 billion by 2017-18.

If you support Hockey and the policies of Tony Abbott and the Liberal Coalition, then this budget signals a start back on the road to recovery. It will mean the era of entitlement will be curtailed (or redirected) and efforts made to reduce public debt and encourage investment into infrastructure.

The goal posts will change for those who receive government benefits for unemployment, health care or for a university education. But business and industry are desperate to employ staff yet they are unable to fill vacancies, while many thousands of people are on benefits. Of course, it is never as black and white as this.

But if you are a Labor or Greens supporter, or if you have lost faith in political parties, this is a Budget that persecutes the vulnerable while rewarding the wealthy with a faint taxation burden. The real losers are those who are not well off or who rely on the government to help make ends meet. For them, this budget is a wrecking ball and confirmation that the Abbot Government won government under false pretences and is now breaking its promises.

But how can we get a true picture of the budget when politics is such an ugly public dogfight? Ordinary people must wade through a bewildering chaos of public comment to try to find out what is real and what is not. We are drenched with strident views on social media, journalists who are known to publicly support one side of politics or the other, and media outlets that take sides in political debate rather than report it.

This means we get a distorted perspective on the budget because while everyone pretends they are speaking in the public interest, almost no-one actually does.

From our perspective in Canberra, cuts to the public service have the potential to damage the economy and throw people out of work. But how serious is it?

Hockey said he would cut 16,500 jobs over the next three years but Labor already intended to abolish 14,500 jobs, so we have an overall ‘new’ loss of only 2,000 jobs. Given that Australia had 167,257 public servants (in June last year) this is not an unbearable loss to Canberra’s economy.

The city will not grind to a halt. Most accept that the public service is probably overblown for a country the size of Australia and much of it unnecessary. For example, not that long ago we had large bureaucracies in health and education – yet the federal government runs no schools or hospitals.

Most of us in Canberra are well aware of offers of redundancy packages that are part and parcel of public service life. These offers have been going on for years, seemingly trying to get rid of anyone over the age of 45 as a cost-cutting measure. Mostly, redundancies are offered covertly, not publicly announced, made to individuals or sections and directed at specific age groups. Not long ago DAFF cleaned out its communications section this way then promptly refilled all the positions.

Perhaps Hockey’s ‘end of entitlement’ is a bit like Paul Keating’s ‘recession we had to have’.

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Much of what the OP has said is well written and accurate, however I have to take him to task re “bureaucracies in health and education”. With just a little investigation the OP would have found that a large chunk of the education bureaucracy was set up to manage programs that help Australians access quality and affordable childcare as well as higher education, international education and academic research. The health bureaucracy was responsible for ensuring Australia’s doctors were appropriately qualified, looking after the Prescription Benefits Scheme, aged care etc. Its very easy to dismiss these agencies based on assumed responsibilities because of shorthand naming conventions; however I think Australia would be a lot worse off without these “bureaucracies”. BTW, neither I nor anyone in my family works for the APS, so I my opinion is not based on employment arrangements.

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