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

By Andrew Barr ACT Chief Minister 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
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miz 3:52 pm 22 May 14

Very enlightening explanation from Peter Martin on why govt debt does not have to be repaid in the same way as household debt – see link here

http://www.abc.net.au/radionational/programs/lifematters/everyday-economics-is-government-deficit-the-same-as-personal-d/5465022

Codders111 1:18 am 22 May 14

milkman said :

chewy14 said :

Oh for some decent politicians and a voting populace that would be mature enough to accept that the gravy train is heading for a massive derailment unless we address these intergenerational issues.

Sadly it seems like too much to ask.

“Waaaaaaaah, the government is taking some of my free money away”

I think you’ll find a lot of people who are upset about the budget aren’t directly affected.

Tetranitrate 6:41 pm 21 May 14

chewy14 said :

Oh for some decent politicians and a voting populace that would be mature enough to accept that the gravy train is heading for a massive derailment unless we address these intergenerational issues.

Good thing they’re dealing with the looming explosion of aged pension costs by including the family home in means-testing so property millionaires need to draw on their equity before coming to the government cap in hand, just as the commission of audit recommended….oh wait, no they aren’t, they’re ripping away the social safety-net from GenY instead.

The 6 month rubbish wasn’t even recommend the commission of audit – it recommended forcing young people to move to areas of higher employment to continue receiving payments which at least makes some amount of sense and works toward solving aspects of structural unemployment. This, on the other hand is a nasty, thuggish, discriminatory policy that North Shore liberals like Abbott and Hockey have farted out variations of on and off over the past couple of years, but never had the guts to actually carry into an election as an actual explicit policy.

Here’s what they went into the last election with: http://tinyurl.com/pjt5vh4

dungfungus 7:26 am 21 May 14

milkman said :

chewy14 said :

Oh for some decent politicians and a voting populace that would be mature enough to accept that the gravy train is heading for a massive derailment unless we address these intergenerational issues.

Sadly it seems like too much to ask.

“Waaaaaaaah, the government is taking some of my free money away”

On the subject of money, the $80 billion that the states and territories claim has been withdrawn never existed. It was an unfunded pledge given by Labor immediately before last year’s election and it was planned to commence in 5 years (outside the then current 4 year budget cycle) so it didn’t have to be explained where the money would come from.
Abbott and Hockey are not magicians. At the same time they are not very good communicators.
The best outcome to the political impasse that is crystallising would be for Abbott to call an election which Labor would win. Labor could then re-instate all the imaginery unfunded budget cuts and bloated entitlements, borrow more AAA rated money, give the media back the 24 hour news cycle, open the borders to anyone who wants to come here and everyone left staying in Australia would be happy.
New Zealand suudenly is looking like a very attractive place to live.

milkman 6:35 am 21 May 14

chewy14 said :

Oh for some decent politicians and a voting populace that would be mature enough to accept that the gravy train is heading for a massive derailment unless we address these intergenerational issues.

Sadly it seems like too much to ask.

“Waaaaaaaah, the government is taking some of my free money away”

magiccar9 6:16 am 21 May 14

Goodness, are we still debating this?

Andrew Barr is going to continue to sledge the budget, cover for this local government’s poor spending habits, and use his precious (tax payer funded) work time to check back on the site to see if someone has challenged one of his comments.

No matter what is said here, at a uni protest, or anywhere else, we can’t change the decisions the feds have made. We just need to show some resilience, knuckle down, and stop banging the “it’s not fair” drum.

chewy14 8:53 pm 20 May 14

Andrew Barr said :

Standard and Poor’s says Australian rating safe

Agency contradicts Tony Abbott and Joe Hockey’s claims that blocking budget in the Senate could lead to a rating downgrade.

http://www.theguardian.com/world/2014/may/20/standard-poors-aaa-rating-not-at-risk

The important part of that article is:

“But an S&P spokesman said its long-term view was that Australia had a “stable outlook”, meaning there is less than 33% chance that the country’s coveted AAA-rating will be downgraded in the next two years.”

The next two years.

Hockey and Abbott are playing silly political games with the AAA rating over Labor potentially blocking budget measures but our budget problems aren’t in the short term, they’re in 5,10,20 years if we don’t address the structural problems now or in the next few years.

We need to cut expenditure growth in the medium to long term and raise more revenue at the same time. Unfortunately Federal Labor has taken the leaf out of Abbott’s playbook and are far more interested in being obstructionist rather than detailing solutions to this.

Oh for some decent politicians and a voting populace that would be mature enough to accept that the gravy train is heading for a massive derailment unless we address these intergenerational issues.

Andrew Barr 7:17 pm 20 May 14

Standard and Poor’s says Australian rating safe

Agency contradicts Tony Abbott and Joe Hockey’s claims that blocking budget in the Senate could lead to a rating downgrade.

http://www.theguardian.com/world/2014/may/20/standard-poors-aaa-rating-not-at-risk

dungfungus 3:26 pm 20 May 14

To all of you that continue to warn that there is no budget crisis and everything is rosy in the garden, you were warned; and remember interest rates are still at “emergency” (Wayne Swan’s words) record low rates.

https://au.finance.yahoo.com/news/warning-australias-credit-rating-risk-214711951.html

dungfungus 1:29 pm 20 May 14

davo101 said :

dungfungus said :

Source?

Curiosity, an ability to read, and a memory.

Actually, it was meant to be a joke. We haven’t heard from the comical gamer nerd for a while and I was channeling him for a moment. I wouldn’t challenge anything you contributed from any other source.

davo101 11:25 am 20 May 14

dungfungus said :

Source?

Curiosity, an ability to read, and a memory.

dungfungus 11:00 am 20 May 14

davo101 said :

Andrew Barr said :

Australia is the only federation in the world where the states do not levy an income tax.

Well, except for Mexico, Germany, Russia, and Malaysia (and Indian states can only tax agricultural incomes) that is*.

*Probably more but I can’t be bothered looking them up.

Source?

bikhet 10:54 am 20 May 14

davo101 said :

Masquara said :

What possibilities besides an increase are there?

Distribution.

Decrease?

Andrew Barr said :

There has also been discussion of a switch in taxation arrangements between the States and the Commonwealth whereby the States resume income taxing powers, “temporarily” handed over during WW2, and in return the Commonwealth takes back the revenue from the GST.

Oh goody. The States and Territories will then be able to engage in tax arbitrage and the ACT will quickly empty of taxpayers if the current level of government charges and expenditures are anything to go by. Why not propose different GST rates as well? After all, the various States in the U.S. have differing sales tax rates. Then the ACT will empty even faster.

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